Audio-visual company Mediascape celebrated five years this May as an employee ownership trust (EOT) and reflected on the benefits it has to employee engagement, recruitment and retention.
The employee ownership trust was introduced by the UK government in 2014 and has become increasingly popular in recent years, with over 1,300 companies in the UK adopting the model.
More about employee ownership:
Employee ownership hits record high
Employee ownership: Another way of doing business
Becoming employee-owned: Why and how to do it
In 2018, the former owners of Mediascape decided they wanted to pivot away from the business.
However, they were hesitant to sell due to concerns over job security and opted to become an EOT instead.
Niall MacDonald, managing director of Mediascape, helped oversee the transition.
“Becoming an employee ownership trust was the perfect solution. A traditional trade sale wouldn’t necessarily secure the employment of the individuals working at Mediascape,” he says. “But this was a change to both secure these jobs and build a much stronger foundation moving forward.”
MacDonald says the new framework has allowed employees to engage with the business more than ever before.
“People quite literally bought into the business and we saw much more engagement as a result. Everyone has a say and everyone can see a tangible benefit to what they’re doing.”
Looking after employees
It’s been an uncertain time for business. Between Brexit, Covid and the cost of living crisis, employers have undergone challenge after challenge in the last five years.
However, MacDonald says the EOT model made it easier to come up with long-term solutions for these challenges.
“Our biggest hurdles through this transition were external, but I truly believe being an EOT helped us get past them better.
“With the cost of living crisis we were able through the employee ownership model to give one-off monthly payments from November to February to our employees.
“But through that time, which was difficult for us as a company, we reviewed what a longer term fix would be and how we could truly deal with this hardship. And as a board we decided to reduce our profit margin and give that money to the team.”
MacDonald says that when the employees are the beneficiaries of the business, decisions will always take their wellbeing into account.
He adds: “From our viewpoint, we recognise that we have the setting to look after our team and sometimes that just means the company will take less profit.
“This is why it’s a great model. It puts a personal responsibility on the leader of the organisation to really look after the welfare of the people within the organisation.”
Culture changes
MacDonald says the biggest change in the business has been the culture.
“People have more accountability, more responsibility, which they may not have had previously, and that means the business means a lot more to them,” he says.
“We’re seeing a lot more dialogue and group think. For example, we have a monthly meeting with all employees to update everyone on how we’re doing financially and what’s going well or needs improvement.
“It creates real engagement in terms of what we’re aspiring to be and how we’ll go down that journey.”
Mediascape has also created employee improvement teams who advocate for specific causes, like employee health or the environment.
“Of course, the management team still have to make decisions,” MacDonald says, “But the route to get there has a much broader input.”
Recruitment and retention
Mediascape is bucking the trend when it comes to recruitment and retention, according to MacDonald.
He says, “Retention has improved, but more importantly recruitment has. When people hear about the employee ownership model, that certainly attracts them to the team.
“I think we’re seeing such successful recruitment because our own employees are almost acting as salespeople because they feel so positively about what we’re doing in the organisation.”
HM Revenue data analysed by accountancy firm Price Bailey, revealed a total of 312 EOTs were created in 12 months ending 31 March 2022, a new record.
This number is nearly double the 181 formed in 2020-21 and substantially more than the 50 created in 2018-19.
