When Sarah Jenkins, owner of Jenkins Engineering in Sheffield, decided to sell her business to her 45 employees, she didn't do it for the tax breaks or the headlines. She did it because she believes the workers who built the company deserve to own it.
Jenkins Engineering, a precision engineering firm founded by her father in 1975, has been a staple in the local community. But with Sarah approaching retirement and no family successor willing to take over, the future looked uncertain. The usual options of a trade sale or management buyout would have meant restructuring, job losses, or selling out to a distant conglomerate.
Instead, Jenkins chose the employee ownership trust (EOT) model, which allows a business to be sold to a trust that holds shares for all employees. The deal, completed last month, means the staff now collectively own 100% of the company. Sarah Jenkins handed over control but received a fair price for the business, funded by future profits.
“I wanted to preserve the jobs and the culture,” Jenkins said. “The people who work here are the reason for our success. They deserve a stake in the future.”
The EOT model has gained traction in recent years. There are now over 1,000 employee-owned businesses in the UK, up from just a few hundred a decade ago. This growth is partly due to tax advantages introduced in 2014, which allow owners to sell their business to an EOT without paying capital gains tax on the proceeds. For employees, they can receive up to £3,600 a year in tax-free profit shares.
For the workers at Jenkins Engineering, the change has been transformative. Shop floor supervisor Dave Thompson, who started as an apprentice 20 years ago, said: “It’s a different atmosphere now. We’re not just turning up to work for a wage. We’re building our own future. Everyone has a voice in how the company is run.”
Jenkins Engineering has set up an employee council that meets monthly to discuss strategy and performance. The council elects a trustee director to the main board. Decisions on wages, investment, and expansion are now made collectively.
“It’s not a utopia. We still have tough days,” Jenkins said. “But the commitment level is higher. Staff suggest improvements, waste drops, and profits are shared.”
The policy implications are significant. The Labour Party has promised to double the number of employee-owned businesses if it wins the next election. Shadow business secretary Jonathan Reynolds said: “Employee ownership gives workers a real say and a direct stake in their company’s success. It boosts productivity and fairness.”
Unite union regional secretary Jane Moffat welcomed the move. “This is a model that should be encouraged. It shows that business can be run democratically, with profits shared fairly. In the North, where we’ve seen so much insecurity and closure, this is a beacon of hope.”
But critics argue that not all businesses are suited to the model. Some worry about the financial risk to employees if the company struggles. And the upfront cost of buying the business can be prohibitive for the trust.
Nonetheless, Sarah Jenkins is optimistic. “I’m not a revolutionary. I’m a businesswoman who saw a better way. Why should the wealth created by workers go to distant shareholders? They should keep it.”
As she handed over the keys to the factory, Jenkins said: “I’ve done my bit. Now it’s their company. And I sleep better at night knowing that.”
