With more people handing in their notice towards the start of the year than at any other time, Co-operatives UK has published new research into the benefits of taking things into your own hands and starting a worker co‑operative - a business owned and run by the employees themselves.
The study, by Professor Virginie Pérotin of Leeds University Business School, looks at two decades’ worth of international data on worker owned co-operatives. Businesses like the employee owned retail giant John Lewis, social care organisations like Leading Lives and wholefood suppliers like Suma are the most cited examples of worker co-ops.
But in fact worker co-operatives can be found in nearly every part of the economy, from creative types starting their own design agency to music teachers clubbing together to ensure a steady stream of work.
The new research finds that in Europe, the US and Latin America, worker co-operatives are larger on average than other businesses and identifies a number of significant benefits that make the co-operative option appealing for people.
Involvement. Because worker co-operatives are owned and run by them, their employees have far more say in the business, from day-to-day concerns through to major strategic issues. “A job in a worker co-operative probably is particularly valuable, since it is a job in which the employee has a say in decisions that affect employment risks” says the report.
Productivity. Because the employees are the owners with a stake in the future of the business, worker co-operatives are more productive than conventional businesses, with staff working harder and the organisation harnessing their skills more effectively. The largest study finds that “in several industries, conventional firms would produce more with their current levels of employment and capital if they adopted the employee-owned firms’ way of organising production” the report highlights.
Job security. Because the employees themselves are in control, when there is a downturn in the economy or the market, worker co-operatives have consistently taken the decision to drop wages rather than lose jobs. When business picks up, they are ready to respond and can make up for lost pay because the employees get a share of profit.
Diversity. Because worker ownership is a way of organising a business that creates involvement, relative job security and higher productivity, the approach works across industries, from traditional manufacturing to the creative and high-tech industries.
Ed Mayo, Secretary General of Co-operatives UK, the network for Britain’s thousands of co-operatives, said: "The start of the year is the time when people begin their search for new careers and opportunities. What this research confirms is that starting a worker co-operative offers an appealing option that gives the people working there ownership, involvement and a degree of job security in what are often high performing and productive businesses."
Virginie Pérotin ,the report author, said: "What the data on different models of business shows is that worker owned businesses often out-perform conventional firms - and the reason is that the people who work in them control the business and want it to continue to provide good and meaningful employment.”
“The boost to productivity, for example, stems from the workers having a say in decisions and owning the business, so they work harder and make better informed decisions. Employee-owned businesses provide good quality, stable employment, which is likely to have beneficial effects on local communities."