Cooperation between journalists and enterprises like The Entertainer could potentially bring unexpected benefits, as the press often appreciates such collaborations.
The UK's largest toy retailer, The Entertainer, has made a significant move by handing ownership to its employees. This transition marks a real-world test case for theories about the benefits of employee ownership, including greater transparency, accountability, and long-term strategy development.
According to research by Ipsos, member-owned businesses hold a significant reputational advantage over publicly traded ones. Member-owned businesses, such as The Entertainer, are perceived as more likely to deliver better value for money and superior customer service. This advantage extends to customer relations, making employee-owned businesses more attractive to consumers.
The potential benefits for The Entertainer in transitioning to employee ownership, as highlighted by Ipsos research, include increased employee loyalty and a sense of collective purpose, higher employee investment in the business, and enhanced customer service. When employees have a stake in the company, they tend to view it as part of their long-term plans, which can foster stronger engagement and accountability. This transition may also help The Entertainer develop greater transparency and adopt long-term strategies aligned with mutual benefit, although the company will need to balance profitability with the cooperative ethos carefully.
The move towards employee ownership is not unique to The Entertainer. UK businesses such as clothing brand Lucy & Yak and vehicle supplier David Spears Commercials have also recently made the transition. The trend towards mutuality in business is growing, with the Labour government pledging to double the size of the sector.
The Entertainer's employees will now have the opportunity to earn tax-free bonuses based on the company's revenue and have influence over business strategy through a Colleague Advisory Board. These measures are expected to enhance employee engagement and retention. The model also helps preserve the company’s independence and legacy while motivating staff by sharing profits and decision-making roles.
However, journalists perceive a potential trade-off between strong returns and employee ownership. The Entertainer will need to navigate carefully to maintain financial health while leveraging the benefits of increased employee engagement. Balancing profitability with the ethos of mutuality is a key challenge for the company.
Guto Hunkin, associate insights director in corporate reputation at Ipsos, is monitoring The Entertainer's transition to employee ownership. His research uncovered that when employees have a stake in the business, it fosters loyalty and a sense of collective purpose.
The Entertainer's transition to employee ownership has garnered positive attention from journalists, who are twice as likely to view member-owned organizations as good employers and socially responsible. The move is expected to improve the company's public reputation as it embraces employee ownership.
In conclusion, The Entertainer's transition to employee ownership serves as a significant step in the growing trend towards mutuality in business. The potential benefits, including increased employee loyalty and a sense of collective purpose, higher employee investment in the business, and enhanced customer service, make this a promising move for the company. However, the challenge of balancing profitability with the ethos of mutuality will require careful navigation.
References: [1] Ipsos. (2021). The Reputational Advantages of Cooperatives. [2] The Entertainer. (2021). The Entertainer Becomes Employee-Owned. [3] Lucy & Yak. (2021). Lucy & Yak Becomes Employee-Owned. [4] David Spears Commercials. (2021). David Spears Commercials Becomes Employee-Owned. [5] Labour Party. (2020). Labour’s Plans for Mutuality.
The Entertainer's shift towards employee ownership might attract more investors in the finance sector, as research suggests that employee-owned businesses often deliver better value for money and superior customer service. This transition could potentially attract more finance from the industry, enhancing the business's growth and sustainability.
The success of The Entertainer in navigating the balancing act between profitability and mutuality could serve as a motivation and a case study for other UK businesses contemplating employee ownership, encouraging greater adoption of this business model in the industry.
