Powering business growth through employee ownership

Employee ownership trusts (EOTs) are gaining momentum as a preferred exit strategy for founders, with recent legislative changes bolstering their role in business succession.

EOTs offer more than just a smooth transition; they’re a powerful engine for growth.

Backed by supportive legal reforms and compelling growth potential, employee ownership trusts are set to become a cornerstone of sustainable succession planning.

Why employee-owned businesses achieve higher growth

The recent Robust Growth Champions report revealed that businesses transitioning to employee ownership are over 50% more likely to achieve consistent growth in sales, profits, and headcount while maintaining financial resilience—making EOTs an appealing choice for founders who want to protect their legacy and share success.

The collaborative report from Ownership at Work, the Employee Ownership Association, and ThinCats, features the results of a survey of over 300 employee-owned businesses and 15,000 non-employee-owned businesses (EOBs). Here’s what they found:

1. Financial resilience: EOBs are less likely to face insolvency and are more likely to achieve a 4-star or above PRISM risk (Product Safety Risk Assessment) rating compared to non-EOBs.
2. Profitability: EOBs consistently generate profits across various growth bands and are less likely to report negative profit growth than non-EOBs.
3. Robust growth champions: EOBs are over 50% more likely to be ‘robust growth champions,’ consistently delivering growth in sales, profits, and headcount while maintaining strong balance sheets over a five-year period.
4. Geographical consistency: The advantages of EOBs as robust growth champions are evident across all regions in the UK, including Greater London, the Midlands, the South, Wales, the North, and Scotland.
5. Sector performance: EOBs outperform non-EOBs in sectors such as IT/computing, manufacturing, technical services, and professional services. The only exception is the retail and wholesale sector, where non-EOBs are more likely to achieve both employment growth and financial resilience.

Why employee ownership matters

The report concludes that employee ownership is closely linked to stronger economic growth, enhanced business success, and increased resilience, making a compelling case for expanding employee ownership in the UK economy.

Head of Employee Share Schemes, Samantha Lenox, says: 

The recent report demonstrates why we can expect a notable increase in EOT sales in 2025, underscoring this growing trend. Employee ownership fosters greater productivity, contributes to economic growth, provides benefits and wealth creation opportunities for employees, and strengthens communities.

Understanding more about EOTs

Want to understand more about employee ownership trusts? Join our upcoming webinar on Thursday, 6 March, from 1 pm to 2 pm. We’ll cover everything you need to know about EOTs, including how they work, their key benefits and considerations, and the latest updates following the budget.