By Scott Wright

A GLASGOW-BASED company has become the first recruitment specialist in Scotland to complete the move into employee ownership.

The equity of Livingston James has been placed into an employee ownership trust, with trustees charged with safeguarding the business on behalf of the company’s 25 staff.

Chief executive and co-founder Jamie Livingston will continue to lead the company following the transition, while ensuring it is run to the benefit of its employee owners.

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Mr Livingston said the move came about after he had spent time exploring what would be the “optimum business model to make us the most attractive place for the best people to work”. He had previously bought out business partner Andy Rogerson, with whom he had established Livingston James in 2010, in November 2019.

Mr Livingston told The Herald: “The statistics would suggest [employee ownership leads to] low staff turnover, greater buy-in, greater customer satisfaction, [and a] more egalitarian share of profit, because the employee ownership trust exists to make sure the business is run for and behalf of the benefit of all current and future employees. They are the majority shareholders.”

There are around 165 companies with headquarters in Scotland that are employee-owned, with the number rising all the time. The size of the businesses making the move is also becoming bigger. The model has increasingly found favour among company owners as a form of succession planning where there are no obvious candidates to take over. Some people-focused owners see it as a way of rewarding loyal staff; it is also a way for owners to gradually scale down their involvement.

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At Livingston James, the board of trustees includes two democratically elected employees, two board directors, one of whom is Mr Livingston and the other a non-executive director of the company.

“There is a governance element that would mean a small number of directors would not be able to make decisions that would only benefit themselves,” Mr Livingston said.

“And all things going well, there are some quite nice incentives. Under the model, all employees can earn on top of their normal pay and bonus an extra tax-free bonus of up to £3,600 a year.

“Now, as I remind the team, that is provided there is profit to be shared out. But if we were to take an average of the last five years, including the rockier patches, we would hope there would be plenty of profit to distribute to the team. So, there is a more egalitarian profit share, a governance structure that makes sure the team can rest assured the decisions are being made for and on behalf of the benefit of all employees.

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“It allows the shareholders, over what will be a long period of time, to realise some value as current shareholders, and indeed future shareholders, whereby the trust becomes, if you like, a future exit vehicle for our key leaders in the business moving forward.”

Mr Livingston quipped that the advantages presented by the model were so striking it almost “seemed to be good to be true.”

But the company did explore the potential downsides before making the move. He said: “Because it is all future performance the risk still sits very much with the leadership team. So, although in one sense we may have ownership and succession, the reality is the leadership team need to perform exceptionally well over a period of time. No one is sailing off into the sunset with someone else having bought their shares.”

Under the new ownership model, Livingston James offers a profit share scheme – over and above regular salaries and bonuses – that is shared equally among colleagues, as long as they have worked for the company for longer than a year.

“The trust is the majority shareholder and always needs to own at least 51 per cent of the business,” Mr Livingston said. “But 49% could be owned by other people or given in share options or whatever. The trust will always have the casting vote, with its raison d’etre being: is the business being run for and on behalf of the benefit of all current and future employees?”

He added: “Just like any owner, the trust will be empowering of the board to get on with running the business,” while noting the trust would have to be consulted by senior leaders should they be planning any material changes.

As for his own role, Mr Livingston plans to remain with the company for the duration. Now aged 44, he would like to be chairman when he is 64, “if they will have me”.

He said: “It is not like I was looking to maximise my personal exit and then head off to sail around the world or anything like that. It seemed like a good way to, over what will be a long period of time [plan to exit]. But there is definitely an element of wanting to make sure I could realise some value [from] what we have built up in the business over the years.

“It was important also to be able to make sure those people that had helped us build it were also going to be able to share in the upside they have been able to create, and indeed that we together can create moving forward.”


What countries have you most enjoyed travelling to, for business or leisure, and why?
I really enjoyed working in Ireland early in my career. Six weeks after we got married my wife and I moved to Dublin to set up an office for my then employer. It was fun and a great learning opportunity.

When you were a child, what was your ideal job? Why did it appeal?
It was probably a toss-up between being Spiderman or Superman. Once I realised I couldn’t shoot webs or fly I wanted to be a professional 
rugby player. When I concluded I didn’t have the talent for that, I guess I slowly worked out I would need to set up my own company if I wanted my ideal job.
What was your biggest break in business?
Whilst it didn’t feel like it at the time, it was probably losing my job at Michael Page. I remember phoning my wife to tell her the news and saying I would have a plan for my own business before I got home that night. I’m not sure I would have been brave enough without that push. 
What was your worst moment in business? 
It was probably when we had just signed the lease on our Glasgow office, which was a pretty big cost in relative terms back then, and our revenue just fell off a cliff. It was a scary few months, but the team were great and 
we managed to get things back on track.
Who do you most admire and why? 
As an example of incredible purpose-led leadership, Yvon Chouinard, founder of Patagonia, is right up there. A great businessman and an incredible gesture to gift all future profits of the organisation to the causes that he is so passionate about.
What book are you reading and what music are you listening to? 
I have just finished The Promise by Damon Galgut, which was great. I am part of a small group that endeavour to read The Bible cover to cover every year – I’m a bit behind on our plan but enjoying rereading Exodus at the moment – Moses was some leader!
My Spotify playlist is eclectic – BB King and Fats Domino are regular features at the moment.