What are the benefits of employee ownership for web design companies?

Employee ownership provides many advantages for businesses, and it’s an operational structure that’s becoming increasingly popular. But why?

In this article we explore the definition of employee ownership and consider the benefits for a web design company.

Employee ownership refers to companies that give staff members a meaningful and significant stake in the business. A significant stake means that the employee must have a financial stake, for example, owning company shares. 

The employee also needs to have an input in how the business operates. There are many different benefits of employee ownership, which makes it a potential option for web design companies looking to keep employees around.

In this article, we explore the types of employee ownership, and what makes it a good choice for web design companies.

The types of employee ownership

There are three types of EOS. These are:

  • Indirect ownership: Under this ownership, shares are usually held using an employee trust, collectively, on behalf of the staff members.
  • Direct ownership: This type of ownership uses share plans that include tax advantages. As part of direct ownership, staff members are registered as independent shareholders for the majority of company shares.
  • Indirect and direct ownership combined: An option that merges features of both collective and independent share ownership.

To run an employee-owned company, there are several key-conditions which need to be met. For example, the trustees will need to retain at least 51% of the business, ongoing.

What are the benefits of employee ownership for web design companies?

Let’s look at the key benefits of employee ownership for web design companies.

1) Improved productivity

According to a report from the Ownership Dividend, operating an employee-owned structure is a great way to great way to improve productivity. When employees have a significant stake in the company operations, they tend to feel a deeper connection with the organisation. 

Web design companies rely on creativity, and employees are more likely to produce creative work when they feel connected to the business and its vision. For web design brands, greater productivity means enhanced performance, improved client satisfaction, and a better reputation. In such a fiercely competitive industry, productivity is incredibly important.

2) Enhanced employee engagement

When staff members are involved in the ownership and operation of a business, they feel more engaged, in both a work sense and emotionally. Hence, one of the key benefits of employee ownership is improved engagement, which is great news for web design companies.

There are many positive outcomes of enhanced employee engagement, such as:

  • Improving the overall performance of your staff members.
  • Easier to meet team objectives and goals.
  • Reduced stress at work (which has a positive influence on creativity).
  • Improves employee loyalty (with so many appealing web -design companies to choose from, businesses need to go the extra mile to retain talent).

3) Expand and grow your company

No matter which type of business you run, you’ll need a website to connect with customers, and support your online success. According to Anglo, ‘UK web design has an estimated market size of £563 million, with almost 2000 web design companies operating across the nation.’

Small web design companies have plenty of growth opportunities, but that doesn’t mean there aren’t challenges. With plenty of competition, it’s worth thinking carefully about your expansion strategy. If you’re looking to grow your web design company, adopting an employee-owned structure can support you on that journey.

4) Extra support 

Starting a web design business can be a challenge, but by running an employee-owned company you can share out the responsibility a little. Many entrepreneurs in the web design industry are giving staff members the opportunity to have more of a stake in the business. By doing so, entrepreneurs can ease some of the pressures associated with business ownership.

5) Reduced staff turnover

Staff turnover can be incredibly expensive; there are many costs associated with turnover, including recruitment, advertising, and agency expenses. There are also indirect costs, for example, profit loss due to downtime. According to Croner, in the UK the average cost of employee turnover is £11,000 per person.

To save your company money, you’ll need a strategy in place to reduce turnover. For small web design brands, employee ownership is a fantastic way to support your retention strategy.

6) Control the future of your company

When you empower your staff to invest in your company, you get more control to shape your future together. To build a future proof company, it’s useful to create a shared vision, helping everyone to feel a part of the business.

Operating an employee-owned company can help your business to gain a competitive edge and attract the best talent. Attracting the best employees allows you to boost the success of your brand, focusing on your most important goals.

7) Recognise your team

If you’re keen to help your web design company thrive, it’s important to recognise the efforts of your team. When employees feel appreciated for the work that they do, performance levels tend to be higher. 

Inviting your employees to hold a significant stake in the company is a great way to ensure that they feel valued. There are many other ways that you can recognise the efforts of your team including:

  • Celebrate the achievements of your staff, both inside and outside of work.
  • Provide opportunities for personal development.
  • Use peer-to-peer recognition schemes.

Check out employee recognition platforms.

8) Tax benefits

To encourage more companies to become employee owned, the government offers various tax benefits. Here are a few schemes that web design companies may be eligible for under employee ownership:

  • Save as you Earn (SAYE)
  • Employee Ownership Trust (EOT)     
  • Share Incentive Plan (SIP)
  • Company Share Option Plan (CSOP)
  • Enterprise Management Incentives (EMIs)

Improving the future of your web design company through employee ownership

For web design companies looking to thrive, there are many benefits of employee ownership. By operating an employee owned business, web design brands can attract the best creative talent, and remain competitive in a tough industry.

Running an employee owned business can help companies to save money, boost productivity, and gain various tax benefits. If you’re keen to develop a future proof web design company, operating an employee owned structure is a great route to success.

Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained employee ownership professional.

Make sure you consult an employee ownership professional if you’re seeking advice about becoming employee owned. We are not liable for risks or issues associated with using or acting upon the information on this site.

Photo by Headway