Holywood engineering firm SCC Ltd has become the latest Northern Irish company to move to an employee ownership trust (EOT) model.
The transition essentially gives the mechanical, electrical and plumbing consulting engineering firm's staff more responsibility for the company's quality of service and profitability
The decision was taken as founder and managing director Stephen Clarke, who is approaching retirement with no succession plans in place, and was hesitant to put the company on the market.
Best known as the model adopted by retailer John Lewis, EOT offers workers a share in the profits and encourages them to be more actively involved in the decision-making process of the company.
Currently, there are 18 EOTs operating in Northern Ireland including Gilbert Ash, S&W Wholesale, People 1st and White Ink Architects.
Employee Ownership Ireland was set up earlier this year with a view to creating 10,000 employee owners by 2030.
EOI provided support to SCC Ltd throughout each stage of the transition process and worked with the organisation to undertake a funded feasibility study.
SCC was founded in 2003 by Clarke and his wife Jane as an M&E Consultancy, providing mechanical and electrical engineering design services, mechanical and electrical surveys and commissioning management.
Clarke worked alone for ten years before starting to grow the company in 2013. The firm has now 16 employees and counting with some new starts lined up for August and September.
Laura Buckley, director at SCC Ltd, said the support of the EOI board was invaluable to the company as it undertook this new approach.
“The first introduction we had to employee ownership as a concept was at a breakfast event organised by Employee Ownership Ireland," she said.
"As we were making a decision about the future of the company at that time, the insight proved to be invaluable and the more we heard about EOTs, the more it sounded like the best option for our team.
“The obvious benefit is that as employees become owners, performance improves, the relationship with the workplace improves and this creates a better environment for overall business growth.
“But more than that, the move has protected the company and the 16 number of jobs we offer. It has enabled us to stay rooted in Holywood and contribute to the town’s local economy and helped to retain our positive ethos and culture, things which could not be guaranteed from a buyout or takeover.”
The newly formed trust acquired 75 per cent majority ownership. The other 25 per cent has been split among four key staff members who have contributed to the growth of the company and additional shares have been held to distribute in the future.
"In terms of profit share we are committed to being fully transparent with this. All employees will be entitled to profit share once they have been with the company for one year. When you join you automatically become an employee owner and when you leave, this right leaves with you," Buckley continued.
"We are aiming to pay out profit share twice a year which will depend on profits made that year, but for all members of the team the move will bring about a salary increase as profits are shared more equitably throughout the business,” said Laura.
However, with the reward, there is also more responsibility on staff members, particularly around the future direction of the business.
"While the directors still have overall responsibility for the day-to-day running for the company, our Trust means all colleagues now feed into our strategy, we speak more openly about the future of the business and decisions are made more as a collective which so far, is having a positive impact on our operations.”
Joan McCoy, director at White Ink Architects and EOI board member, said it was encouraging to see the number of EOTs in NI grow but more needs to be done to increase awareness of the business model.
“Working with the team at SCC Ltd as they journeyed towards becoming an EOT was a positive experience, and I wish them continued success as they embark on a new, exciting phase for the business.
“This move signals an exciting time for the wider employee ownership community in Northern Ireland as more and more businesses are actively considering this as a viable succession plan, and we are well on way to achieving our ambition of creating 10,000 employee owners here by 2030.
“It is particularly welcome that the Economy Minister, Dr Caoimhe Archibald, has recently announced the department will make annual funding available to strengthen the awareness of employee ownership here, which will largely be channeled into providing funded feasibility studies for businesses which are interested in moving to the model.”
Photo: (l-r) Stephen Clarke, SCC Ltd, Joan McCoy, Employee Ownership Ireland, and Laura Buckley, SCC Ltd. (Pic: Supplied)
