Monday 23 September 2019

Comment: 'Government must embrace 'win-win' staff incentives'

Business Minister Heather Humphreys. Photo: Steve Humphries
Business Minister Heather Humphreys. Photo: Steve Humphries

Gill Brennan

What if you were told that there is a business model that cultivates long-term thinking, stimulates collaborative behaviours, and enhances productivity and competitiveness all while being inherently transparent and strengthening growth and performance?

What if this same business model keeps jobs in local regions, promotes employee well-being, strongly appeals to the millennial generation and also provides a ready-made solution for succession challenges?

You might expect the Government to embrace such a win-win business model, to promote it, support it, perhaps even place it at the heart of their flagship Future Jobs programme.

Alas, the Government continues to largely ignore the employee ownership business model, all while many of Ireland's competitors are not.

Hundreds of employee-owned businesses are experiencing the benefits on a daily basis in the UK. Yes, there are some things that the UK gets right, and employee ownership is right up there at the top of the list. In the UK, employee-owned businesses contribute approximately 4pc of GDP annually - the equivalent of more than £30bn - and the employee-owned sector is growing by about 10pc every year.

At the launch of the Future Jobs summit last week in Dublin, Minister for Business Heather Humphries said: "We need to ask ourselves hard questions about areas where we need to improve. This includes looking at how we can increase productivity levels among our indigenous SMEs."

In Ireland more than 99pc of the economy is driven by the SME sector, yet foreign direct investment gets all the headlines.

Minister Humphries says she wants to support the SME sector, yet her department is overlooking a model that will increase productivity and employee participation.

Employee ownership is a powerful employee motivator. In the UK, staff at employee-owned companies experience higher levels of motivation, acting on their own initiative and working collectively to improve the fortunes of the company overall.

In Scotland, employee ownership in the form of inclusive capitalism is a key pillar of the Scottish Government's economic strategy post Brexit. Every week more and more Scottish SMEs are becoming employee owned. The model works, and employee-owned businesses are far more resilient than non-employee owned businesses.

Compare this to Ireland's recent efforts on employee ownership. Take the Government's flagship Key Employee Engagement Programme (Keep): it is a damning indictment of it and its exclusions and restrictions that not one of the hundreds of SMEs and start-ups that the scheme is targeted at has applied for Keep since its introduction last January.

The benefits of more than 12,000 Irish workers in the Revenue-approved share-saving scheme SAYE (Save As You Earn) are under threat as a result of Brexit.

One must ask what is the Government doing? Why is it ignoring such a simple, beneficial and socially responsible business model? Employee ownership benefits all who participate and given its size, Ireland could quickly become a leader in this space.

I challenge the Taoiseach to meet me and the team at the Irish ProShare Association. Let's start talking seriously about how employee ownership is a business model that must be supported and championed for tomorrow's Irish economy.

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