He said that "firms that have engaged employees, who own a chunk of their company, are just as dynamic, just as savvy, as their competitors. In fact, they often perform better: lower absenteeism, less staff turnover, lower production costs. In general higher productivity and higher wages. They have weathered the economic downturn better than other companies."
He went on to state that "the 80s was the decade of share ownership. I want this to be the decade of employee share ownership".
The announcement by the Deputy Prime Minister that the Government will help companies offer a greater stake of their equity to employees should be welcomed by the private sector. The UK is already well ahead of some other countries when it comes to businesses offering employees participation in equity based incentive plans. But it could do more in offering true employee ownership solutions, along the lines of the John Lewis model, where every employee enjoys a stake in the company.
Quite what assistance the Government will give to businesses wishing to offer wider employee ownership remains to be seen, and much will depend on the outcome of an independent adviser's review of the challenges facing the sector, which will be brought together in a summit to be chaired by Nick Clegg this summer. In the meantime, watch this space for further updates.
Mr Clegg also referred to a new report written by Will Davies for the Employee Ownership Association “All of Our Business. Why Britain needs more private sector employee ownership”. You can find the report to download from the Employee Ownership Association website today.
We are leading advisers to the employee ownership sector, and to businesses generally who wish to offer their employees participation in equity incentive plans so this announcement from Nick Clegg is particularly exciting news for us and our clients.