By Karen Peattie
AN Aberdeen-based IT provider has joined the growing number of Scottish companies moving to employee ownership as a way of rewarding staff and standing out against competitors.
ITWORX, marking its tenth year in business in the north-east, has given 17 staff a stake in the firm which provides tailored IT and communications services to a range of clients, many of them with a global footprint. It claims to have a customer retention rate of 98 per cent.
Founded by Philip Mowatt and Jill Ross, who have 50 years of combined experience, the £2.6 million-turnover firm has recently expanded into Dundee and Angus. Ms Ross said that after 10 years in business the company was “in a great position, financially stable with a solid client base and a skilled and dedicated team”.
She said: “Looking ahead to the next decade, we wanted to use this strong position to reinvent some aspects of the company that would bring about long-term benefits. It can be difficult to stand out in the IT market – the offering is largely the same across the board when it comes to the practical service, therefore with ourselves it’s more about the people and relationships.
“It’s easy to talk up your company’s values in these areas, but being employee-owned demonstrates that commitment.”
Noting that she and Mr Mowatt have no plans to step back from the business, Ms Ross added: “Our staff are key to our success and some of the senior employees have been with us for a very long time, so handing the company over to them shows them they are valued. It also offers peace of mind about the company’s future as there is no risk of the company being absorbed by a competitor further down the line.
“We also hope the structure will help attract and retain new talent,” she said. “Young talent is so important, especially in an ever-evolving industry like IT. There is a wide range of expertise at all ages and levels within the company that we listen to and learn from, and by giving the team a say in how the business is run, they know their skills and contributions are appreciated.
“We envisage new ways of working to take our course slowly and steadily, with increased input from the entire team.”
An Employee Ownership Trust has been formed and holds 100% of the shares on behalf of the employees. The transition to employee ownership was supported by Co-operative Development Scotland (CDS), with the process managed by Co-ownership Solutions LLP and legal services by Lindsays.
Clare Alexander, head of Co-operative Development Scotland, said that employee ownership continues to grow in Scotland as it offers a range of potential benefits and allows owners to sell to their employees at any time. “They don’t have to wait until they are considering their exit options and can maintain their level of involvement in the business,” she noted.
“As demonstrated by ITWORX, some businesses see employee ownership as an effective way to differentiate in the market, and as a means of motivating and rewarding staff. We encourage anyone who thinks that employee ownership could be beneficial to their business to explore the option further.
“Not only does employee ownership impact positively on the individual businesses, it is good for the wider economy, helping to secure jobs and keep businesses rooted in Scotland. The model is key to helping the Scottish Government with its aim of creating a stronger and fairer economy that ensures local people and businesses have a genuine stake in producing, owning and enjoying the wealth they create.”
Scotland now has about 120 employee-owned companies with approximately 7,500 employee-owners generating a combined turnover in the region of £950m.
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