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Employee Ownership Day – What you Need To Know About Employee Owned Businesses

By Gavin Ashe • Friday 03rd July 2015

That time has come round again when we celebrate Employee Ownership Day. A fantastic time of the year to recognise the global movement that is employee ownership, and encourages employee-owned businesses to share their success stories.

But what is employee-ownership? How does it work? There are actually three different avenues businesses can go down in terms of being ‘employee-owned’ and it may be a decision that is made when the company is founded, or further down the line.

shareholders board

Types Of Employee-Owned Businesses 

Kite Packaging was founded on the principle of employee-ownership. Back in 2001, our Chairman Bruce McInnes, along with the founding partners, decided to create a company in which employees could share in wealth creation, and provide customers with a best-in-class service, driven by employee’s motivation to create success for the company and themselves. “Customer satisfaction matter so much more when you own the business”.

We are known as a ‘Direct’ employee-owned business, meaning we, as employee partners, own the majority shares in Kite. This gives us the advantage of making strategic decisions from the ‘front line’ and encourages us to help the business, our colleagues, our customers and our suppliers, creating a true partnership approach.

‘Indirect’ employee ownership refers to when shares are collectively held through a trust or other means, on behalf of employees. The most obvious example for this is John Lewis, who hold their employee shares in a Trust, which their employees (or Partners) are beneficiaries of.

Some businesses combine these two paths so they have a combination of individuals who own shares in the company, and a collective.

Kite Exhibition Stand

Benefits of Employee Ownership

Whichever way your business decides to become an employee-owned association, the important thing is that you reap the rewards of being part of this great movement. Employee-owned businesses continue to flourish in the UK, and now contribute more than £30 billion to our GDP.

Here are a few reasons why we love being employee-owned:

Innovation – Because we aren’t governed by a Board or external shareholders, we have the ability to make bold, quick decisions that immediately benefit our business. Our staff are encouraged to take full ownership of their role, and have the freedom to approach our Managing Partners with key business strategies.

Commitment – Because all Kite employees are personally invested in our company, we have an incredibly low rate of staff turnover. In fact many of our employees have been here since day one!

Sustainable – A business isn’t a business without its employees, and to have them constantly investing in your business and helping to make decisions based on what they experience on a day to day basis, ensures a much better sustainability strategy than individual ownership.

Success – It doesn’t take a genius to understand that when your employees have a stake in a business, they are far more motivated to make it a success. Work becomes a personal thing, and everyone is willing and committed to making it successful. This is of course great news for your customers, as a committed workforce will listen to their needs, make the appropriate changes, and pay attention to whether they have been effective.

As we have said since starting from zero in 2001 – “Customer satisfaction matters so much more when you own the business.” And here we are, over 200 employees, over £40 million turnover, and no sign of stopping.

Happy Employee Ownership Day, to everyone who has supported Kite and our philosophy.

Kite Packaging Northern (2)