Employee ownership: Why so many Scottish firms are now in the hands of their staff as key target comes into view

“It is heartening to see such positive growth across the sector.”

Adoption of employee ownership among Scottish businesses has been gaining momentum to the extent that the nation is on target to reach a key number of such firms by 2030, according to a newly revealed study. The sector has also seen turnover jump to smash the £1 billion threshold, with key cited benefits also including greater productivity and resilience, and strong community benefit.

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

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

From left: Shuttle Buses trustees Danny Armstrong, Kevin Hamilton, Ralph Leishman of 4Consulting, chairman David Granger, MD Ross Granger, and Mark Stranaghan. Picture: contributed.

Since then, the EOB community in Scotland has grown by 47 per cent or 91 companies – an average of 45 new EOBs a year. Scottish Enterprise added that with this trend continuing, it 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) – comprising 177 Scottish-registered EOBs; 25 Scottish-registered workers’ cooperatives; and 84 EOBs with trading/production operations in Scotland but registered elsewhere. Furthermore, Scottish-registered EOBs and worker cooperatives have been found to have a combined turnover of £1.47 billion and about 7,600 staff – up by 113 per cent and 2,265 workers respectively since 2022.

Tom Arthur, Scotland’s Minister for Employment and Investment, said: “It is heartening to see such positive growth across the sector as we progress towards our target of 500 [EOBs] in Scotland by 2030. 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.

"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 – and 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… 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. 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 Dunkeld-based Land Rover Experience Scotland, which in 2023 gave employees an 83 per cent stake. Additionally, Kilwinning-based Shuttle Buses in 2022 handed its 70 employees a company stake as MD David Granger prepared for his eventual retirement. He said safeguarding the future of its workforce “was equally important to me as my own”.