Across the world, companies are adopting employee ownership schemes to make their businesses more productive and worthwhile for their employees. Which tech companies make this list?
There are several benefits of a company share option plan, from more motivated employees to a sense of shared responsibility over the success of the company. Many companies have recognised these benefits, and have adopted an employee-owned business model to see if it’s the right choice for their company.
The question is, is this the right choice for tech companies, and which ones have already made the jump to employee ownership?
In this post, we’re going to detail various employee-owned tech companies. In each instance, the owners of the company have explained why they decided to hand ownership of their business over to their employees. Maybe this will sway you to choose this business path for yourself…
Which Tech Companies Have Adopted Employee Ownership Schemes?
Employee ownership schemes are still a new concept in our traditional capitalist structure where owners and employees are separated by a harsh dividing line. Employees get paid and business owners and shareholders divvy the company’s profits amongst themselves.
Employee ownership allows all the employees of a company to reap the benefits of its success and share out the profits evenly. The tech companies listed below have opted for this new model, and are succeeding just as much as those who use traditional ownership models. Take a look…
Agilisys is an IT software company headquartered in London, that focuses on local government and citizen-centric technology products. The company employs around 1,500 staff members and has been employee-owned since 2015.
There are several different types of employee ownership schemes in the UK. The type Agilisys uses, an employee ownership trust, is one where a trust is set up with the majority of the company’s shares held on behalf of the company’s employees.
Agilisys set up an employee ownership trust to continue as a successful, independent, and professionally managed business that will allow employees to have greater ownership and engagement in how the business operates, whilst benefitting from its success.
Team Consulting is a medical device design and development consultancy that works with pharmaceutical and med-tech companies internationally.
This company is also based in the UK and is part of Silicon Fen, a cluster of high-tech businesses in Cambridge that forms one of the most important technology Centres in all of Europe.
The company was bought out by its staff in 2014, with more than 80 percent of them buying equity in the company. In 2016 Team Consulting transferred control of the company to an employee ownership trust which gave staff official ownership of the business and made it more sustainable in the long term.
The CEO of Team Consulting, Dan Flicos, said the move was a great fit with the company’s culture and values. He also said that it would enable future generations of talented staff to take the company forwards, build, and share value together.
Torch Technologies is a system engineering, applied science modelling, and information technology business based in the United States. Its main clients are the United States Army Aviation and Missile Command, and the Missile Defence Agency.
Co-founded in 2002, the company recruited talented senior engineers from the get-go. In 2005 they started moving towards an employee ownership model and became 100% percent employee owned in 2010.
Bill Roark, one of the co-founders of the company, has always desired to have an employee-owned business because he had heard that such management styles had been proven to increase job satisfaction and reduce the number of employees who leave the company.
Since that decision in 2010, Torch Technologies completed a $12 million renovation of its existing properties. It now has employee owners in several areas, including Hawaii, Massachusetts, Ohio, Oklahoma, Pennsylvania, Texas, Virginia, Kwajalein, and Egypt.
Kantega is a Norweigian software corporation founded in Oslo in 2003. The company primarily develops bespoke software based on Java and lightweight application frameworks, as well as identity management solutions.
Unlike the other companies on this list, Kantega was founded as an employee-owned company in 2003, recognising the difficulty of running a tech company using the traditional models.
On their website the company says they were completely done with external investors and cowboys who ate up their time, took their profits, and eventually bankrupted them. Their new company, Kantega, rose from the dot.com ashes when 40 members of their old company decided not to give up.
Each employee now gets a share of the company’s profits and, after 17 years Kantega, has 165 employee owners across three cities. With this new model, they have the largest market share in the Scandinavian online identity provider, with a spin off company that attracted 10 million NOK in venture funding.
The Financial Times included Kantega in their 100 best places to work in Europe, and they have also been recognised by others as the most family-friendly workplace in Norway.
Why Did These Tech Companies Choose to be Employee Owned?
We’ve heard from the business owners why employee ownership works for them, but we thought it would be a good idea to detail the main benefits of employee ownership before we end this article.
The employee-owned business sector is growing because companies that adopt these models tend to be more successful, competitive, profitable and sustainable. This is likely due to the fact that:
- Staff in employee-owned businesses are more committed to the company’s success because they have their own money at stake.
- Staff are more involved in how the business is run and can give insights into solutions to specific issues in their individual departments.
- Staff have more responsibility and are more likely to have a varied set of skills to allow them to perform their job better.
- Skilled members of staff are less likely to leave the company because they own a part of the company.
Is Employee Ownership for You?
In this post, we’ve managed to detail four tech companies that are 100 percent employee-owned, with insights from them on why they decided to make this move.
Hopefully this post has shown you that there is more than one way to run a business. Employee-owned businesses are one of the fast-emerging alternatives that could help your business run successfully.