Making Employee Ownership work in Smaller Companies

Making Employee Ownership work in Smaller Companies Ian Henderson, Savant Enterprises Ltd

Savant • Based in Carnforth, Lancashire • 40 employees • Software development and consultancy services • Specialist area - Healthcare

Employee Ownership • Family to Employee in 2001 • No external capital • 3 year ‘earn out’ • Employees appoint board • Board runs company • 3 ‘management’ directors • 1 employee representation director

What’s worked • We made the transition – we’re still here • ‘Earn out’ scheme worked for both parties • We’ve grown the business • We get accolades for our support • We’ve paid a dividend every year • We’re profitable

What’s worked? • Low staff turnover • High level of commitment • but that hasn’t changed • Management team runs company

Where’s the issues? • Big organisations don’t understand us • Government • Public Sector • Taxman • Running a business is hard work • Finding the balance between involvement and decisions is difficult • We’re too successful • British mentality to authority

Big Decisions! • Thinking as a shareholder • We had to move premises • Difficulties in persuading shareholders • Potentially a large amount of money • “What about my bonus?” • A period of difficulty

In summary • Employee ownership is not a panacea • In a small company • It will help the company • And it can hinder the company • Good management is needed no matter how the company is owned

And in finishing...... In 2000, if I knew then, what I know now.. Would I do things differently?

Making Employee Ownership work in Smaller Companies