It is a trend which began to win increasing favour in the months after the pandemic broke out and has steadily increased in momentum since.

Employee ownership is now an extremely popular and established succession planning solution for company owners in Scotland, with more than 170 businesses having now made the move north of the Border, and there are many reasons why.

Some of those were set out today by the two latest companies in Scotland to undertake the transition, Stirling-based steel stockholder Alexander (Scotland) & Co, and Livingston chartered accountancy firm Glen Drummond.

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Many company owners who decide to go down this route have cited a desire to protect jobs and ensure that long-established firms remain part of the community in which they have been built up in the years to come.

Passing the equity of such firms into the hands of a workforce, often by placing shares into an employee ownership trust, can be a way of rewarding staff who have played a key role in contributing to the success of a business, and can motivate them to continue doing so in the future.

As such, it can help soothe any worries an owner may have regarding the future of a firm which has perhaps been built up by previous generations of their family. Indeed, while an owner may conceivably receive a higher price from an external buyer, such bids do not bring any guarantees over jobs, or over the location of the business in future.

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That need for assurance appeared to be uppermost in the mind of Glenn MacLachlan, outgoing owner of Alexander (Scotland), who was keen to do the right thing for a business which was founded by his grandfather seven and half decades ago. Declaring that creating an employee ownership trust to hold the equity on behalf of his staff “seemed to tick a lot of boxes”, Mr MacLachlan said that he can “retire now knowing that I have left the business in safe hands”.

Asked for her thoughts on the increasing popularity of employee ownership, Carole Leslie of Ownership Associates told The Herald today that it is down “pure and simply” to awareness of the model growing all the time.

Ms Leslie observed that firms often see an “uplift in performance” after moving into employee ownership, which can result in former owners receiving payment for the shares they have passed over to staff more quickly. And, she noted, the employees themselves also have the potential to earn bonuses under the model.

“Because the shares are held in trust on behalf of the employees, the individual employees do not qualify for dividends,” she said. “The trust waives its right to a dividend and this cash is used to pay a bonus to employees (via payroll) which is free of income tax up to an annual limit of £3,600 per annum.”