Why Employee Ownership Trusts Are Transforming UK Businesses
Employee Ownership Trusts (EOTs) are one of the fastest-growing succession planning strategies in the UK. As more business owners seek sustainable and tax-efficient exit routes, EOTs have emerged as a compelling alternative to traditional business sales.
The Rising Popularity of Employee Ownership
Recent data highlights the growing appeal of EOTs:
✔ 1 in 10 SME business transfers now go to employees, according to the European Federation of Employee Share Ownership.
✔ A survey by Evelyn Partners found that EOTs are the second most popular exit strategy after family succession.
✔ The number of employee-owned businesses in the UK has now exceeded 2,000, with most structured as EOTs.
As this trend accelerates, major companies across industries—including retail, healthcare, financial services, and leisure—are embracing the employee ownership model.
The Business Case for Employee Ownership Trusts
While the ability to sell a business to an EOT free from capital gains tax is a significant incentive for business owners, there are also powerful commercial advantages associated with employee ownership.
1️⃣ Increased Productivity
Research from Ownership at Work and Thincats reveals that employee-owned businesses are 8–12% more productive than traditional companies. Motivation and efficiency naturally rise when employees have a stake in the company’s success.
2️⃣ Stronger Growth & Profitability
Employee-owned businesses outperform their peers in key growth metrics, including:
✔ Higher revenue and profit growth
✔ Increased employee headcount
✔ Stronger long-term sustainability
3️⃣ Enhanced Employee Motivation & Satisfaction
Employee ownership fosters a highly engaged workforce, leading to:
✔ 83% of EO businesses report improved employee motivation
✔ 73% reporting increased job satisfaction
4️⃣ Greater Financial Resilience
Companies structured as EOTs are:
✔ More financially stable and less likely to go insolvent
✔ 5x less likely to make redundancies
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