Would Restructuring My Business Into An EOT Increase Workplace Performance?

Businesses of a certain size are faced with several alternatives when looking to restructure a business with an eye to succession planning and one option may be an Employee Ownership Trust. The various options available to a business owner may depend on the underlying structure of the business and whether it is a limited company, a limited liability company or a sole trade or partnership. The motivations to change the structure can be many and varied and often dictate the direction a business should go in, but if one of the primary objectives is to increase workplace performance, restructuring your business to become an employee ownership trust (EOT) is a proven way to achieve this.

Employee ownership options most commonly settle on an employee owned trust, and one of the most popular benefits is the speed and effectiveness in which employee goals are aligned with the success of the business. The outcome of this is an increase in performance and the employee owned business distributing profits amongst its qualifying members. At Ison Harrison, the first solicitors to become 100% employee owned via an EOT, and the parent company of the Employee Ownership Advisor, we were able to distribute a profits pot of £3million over the first three years. This resulted in each qualifying employee receiving £11,500 over that period. That was generated through an increase in workplace performance, and here is how that is achieved.

More engaged employees

As a qualifying member of an EOT, employees are invested in the success of that business and have a clear sense of ownership. With good communications and transparent information, an EOT can ensure goals and objectives are clear and understood and progress towards them is known. This ensures that employees have a direct stake in the future of the business and can see how their performance affects it. In many cases, employees will have been on the journey already, and will have contributed to the success of the business under previous ownership, now they are more likely to go the extra mile to continue that success and directly reap the rewards.

Creativity and innovation

Improved workplace performance comes from developing the business and not standing still. Employee ownership means that employees have a say in the direction of the business and this more direct responsibility and a breakdown in the traditional lines of authority, results in employees contributing more ideas. A sense of responsibility can trigger creativity and innovative solutions and builds a more dynamic workplace culture.

Employee retention

Employees in an EOT feel valued and appreciated and have a vested interest in the performance of the business, so they are more likely to stay with the company and help to reduce the costs of staff turnover. A stable workforce also helps to improve morale and shows commitment and drive which encourages better performance. An employee owned business should also use its EOT status as an appealing feature to attract the best possible candidates for new positions, thus improving the quality and standards of employees over time and across the board.

Aligned goals

The profit share distribution programme makes it very easy for an EOT to align the goals of employees and the business. This creates a cohesive and collaborative culture and environment, in which people thrive and workplace performance improves.

Productivity

In simple terms, employees who are more engaged and motivated will work harder and find more efficient ways of doing things in order to improve results. Being more productive also means wasteful practices will be reduced, which will contribute to an improvement in company performance.

Trusted and experienced advice on employee ownership

To answer the question, yes, restructuring your business into an EOT will increase workplace performance and is a proven method of driving engagement, generating creativity and innovation, improving employee retention, aligning the goals of employees and the business and ultimately improving productivity. If you want to learn more about employee ownership and EOTs, you can speak to our experts at the Employee Ownership Advisor, who have lived experience of going through the process of becoming an EOT and can therefore advise on how an EOT works.