Scots employee-owned firms have £1.5bn turnover

Darah Zahran

A new census commissioned by Scottish Enterprise has revealed the national economic development agency is on track to meet the Scottish Government target of growing Scotland’s employee-owned business (EOB) community to 500 companies by 2030

The census – conducted by academics from the University of Leeds, University of New South Wales and the White Rose Employee Ownership Centre (WREOC) – is the second commissioned by the agency, with the first taking place in May 2022.

Since then, the EOB community in Scotland has grown by 47% or 91 companies – an average of 45 new EOBs per year.

With this trend continuing, Scottish Enterprise will meet the 2030 target, which the Scottish Government set out in its 2021 Programme for Government.

“Latest figures show there are currently 286 EOBs operating in Scotland (up from 195 in 2022) – comprised of 177 Scottish-registered EOBs, 25 Scottish-registered workers’ cooperatives and 84 EOBs with trading/production operations in Scotland, but which are registered elsewhere,” said Scottish Enterprise.

“It also revealed that Scottish-registered EOBs and worker cooperatives have a combined turnover of £1.47 billion and employ 7,593 people.

“This is a 113% (£780m) increase in turnover and a 42.5% (2,265) increase in employment since the 2022 census.”

Minister for Employment and Investment Tom Arthur said: “It is heartening to see such positive growth across the sector as we progress towards our target of 500 Employee-Owned Businesses in Scotland by 2030, with 47% more companies now in operation by comparison to 2022.

“These businesses provide unique benefits to the people and places in which they operate, generating increased levels of productivity and resilience, which in turn drive profitability, as evidenced by a huge 113% increase of the total turnover across the sector in the past two years.

“These companies are also more inclusive places to work, with nearly all Scottish-registered EOBs using our Fair Work policy guidance to invest in workforce development and create channels for effective voice.”

Darah Zahran leads the Co-operative Development Scotland team – the Scottish Enterprise unit responsible for growing employee ownership.

Zahran said: “This latest census really highlights the fantastic progress that has been made over the last two years in growing Scotland’s EOB community.

“Employee ownership is an attractive succession option when an owner is retiring or moving on. It gives remaining employees a meaningful stake in their organisation, a genuine say in how it’s run, ensures consistency for customers and anchors the business in its community for the long term.

“EOBs are also proven to be more resilient in times of economic crisis, more profitable and more productive – all key measures of business success. It’s great to see that more and more businesses are recognising these advantages and embracing employee ownership.”

Companies supported by Scottish Enterprise to transition to employee ownership in the last two years include Alexander (Scotland) & Co steel merchants in Stirling/Bathgate, and Glen Drummond chartered accountants in Livingston.

Chris Wilson, Director at Glen Drummond, said: “Clients are at the heart of everything we do. Employee ownership allows our customers to continue getting a quality service from the people they know and trust for years to come.”

In May 2023 another EOB was created when Dunkeld-based Land Rover Experience Scotland gave employees a majority stake in the business.

Director Will Cox said: “Through Scottish Enterprise we learned about employee ownership and, following discussion with our employees, decided to sell 83% of the business to the team, with one remaining director retaining the other 17%.

“Employee ownership ended up being a great fit for us, as we really wanted to ensure the business stayed in the local area and retained its existing management team.”

Kilwinning-based Shuttle Buses became employee owned in September 2022, giving all 70 employees a company stake as MD David Granger prepared for his eventual retirement.

Granger said: “Having considered various exit strategies, it was clear that employee ownership was the best way forward. We have a great workforce, some of whom have been with the company for almost as long as I have, and safeguarding their future was equally important to me as my own.”