Owner(s) | Can employee-ownership give staff an entrepreneurial mindset?

An employee-owned model is characterised by a company’s employees owning shares in the business or the right to the value of shares in the firm.

The UK government introduced an Employee Ownership Trust (EOT) in 2014, with a long-term plan to incentivise companies to move to the model. Since, over 700 organisations in the UK have adopted this model.

Since, employee-owned businesses have increased in prominence in the UK, raising questions about the potential benefits of this type of model. From a cultural perspective, there are obvious benefits in terms of engagement – as staff feel more engrained in the identity of the firm.

There are also some generous tax-breaks associated with employee ownership – such as selling shares free of capital gains tax and being able to pay tax-free bonuses to employees of up to £3600 per employee per year. In this sense, an EO model has benefits for both staff and employees.