As the country and the world weathers economic headwinds, businesses may find themselves facing a recession and a failure to make profits. What then becomes of the workforce that apparently is motivated by the allure of a profit share at the end of the year?

Where would an employee owned business be without a profit share? 

Without the motivation of a profit share, how else might the workforce be driven to perform without the guarantee (such that a guarantee might even exist) of a financial reward?

Well, first of all, the networks of communication within the workforce may well be stronger in an employee owned business. Methods of engagement with employees are more likely to be numerous.

For the larger businesses, a separate employee council might have been established to help with the channels of communication from senior management throughout the workforce.

So at least there is potentially a strong communications network within an employee owned business that will help with delivering key messages and perhaps more effectively than other businesses might find.

The value of two-way communication

And that communications network will be one which is two-way. So for example, the senior management might deliver comms to the workforce however with the right structures in place, the senior management team might learn more about efficiencies and what is going on the shop floor. With the right information, changes can be made in the delivery of the product or service which might yield some efficiencies and even open up new marketplaces.

The assembly of good ideas is never a monopoly amongst the few people that lead the business.

Good and empowering channels of communication throughout the business creates a culture and in turn, that culture can help to provide some of the glue that keeps people together in in bad times as well as in the good times.

Consequently, an ethic of working better together might create a rapport amongst the workforce that is perhaps more special than a non-employee owned business. And those relationships will help with employee retention and motivation.

Delivering a more productive and inclusive economy

So, employee owned businesses may have something special to offer during recessionary times. The evidence from The Ownership Dividend publication (to which Stephens Scown contributed) was that an employee owned model can deliver a more productive and inclusive economy through:

  • increased productivity – personal endeavour and discretionary effort powering a common purpose
  • regional resilience – providing a succession solution and longevity for businesses
  • engaged employees – people working on the business rather than simply in the business

It’s not surprising that the Employee Ownership Association is at this moment embarking on an ambitious new strategy that looks to deliver greater corporate diversity and economic resilience across the UK.

And with an environment of better methods of communication, upwards and downwards flows of information, retention rates and workforce well-being, who knows, the business might do better than expected and produce a profit share.

For all of our Employee Ownership insights visit our Employee Ownership Info Hub.