Selling the farm to the workers – 5 benefits of transitioning ownership to your employees: Part 2

Chris Galloway, Director, CoActive Developments Worker Co-op
March 13, 2023

*(Please note that this is the second of six posts for a series of blog posts over the coming weeks that will outline some of the many benefits of transitioning to employee ownership).

Benefit #1 – Increased employee engagement through workplace democracy!

In the wake of the recent COVID-19 pandemic, an ongoing economic trend predominately in the USA and other parts of the industrialized world known as the Great Resignation (also known as the Big Quit), whereby large numbers of employees have voluntarily resigned, is an indicator that people are clearly fed up with their employer and their relationship with employment. For decades now, the wealth gap has been growing wider and the effects of this concentration of resources can be felt throughout society, including in our relationship with traditional employment.

Even in Canada, where it has been reported that the Great Resignation didn’t really materialize, over a third of employees feel “totally burned out”, and while this hasn’t led to mass resignation, many workers have been simply swapping jobs. Quitting for an extended period of time is clearly difficult, especially at a time of high inflation, but even if the Great Resignation isn’t apparent in Canada, it is clear that this has been a time of reflection and maybe it is more of a time of Great Rethink rather than a modern-day General Strike.

It’s not so much a Great Resignation but a Great Rethink … of the type of work that people want to do” David Coletto, CEO, Abacus Data

It is clear that the economy is not working for the average person, and that work in general is becoming less secure, and so what about if this so-called period of the Great Rethink led to more workers (and owners) considering employee-ownership as an option? You can see where I’m going, and if we have a situation where most workers are fed up, want to quit but can’t, and are totally disengaged and burned out then why would it be any better if you are not just a worker, but you are a worker-owner?

Employee-ownership gives much greater power and autonomy to workers to help them better control and plan for their future and thus increase their wellbeing. Put simply, by giving employees a stake in the business, they are engaged in a way whereby work is no longer just a job. In effect, they’re running their own enterprise. This in itself leads to a greater level of self-belief and renewed emotional investment in the company they work at and now own.

It does seem crazy that we continue to promote the benefits of democracy over authoritarianism and yet this is what the vast majority of us are enveloped within during most of our waking hours. Surely, creating greater democracy in the workplace (and of course equity in the relationship between capital and labour) is desirable? The best example of a workplace that has democracy embedded in its DNA are worker cooperatives, who by their very nature are guided by the cooperative principle of democracy, and the cooperative value of equity.  

Of all of the studies that have been conducted on the success (and failures) of Mondragon, one of the major research areas of focus is the relationship between how democracy and participation in ownership affects employee engagement and the general wellbeing of workers. It should be said anecdotally, that the main findings of the multiple studies that I have read have shown that the democratic participation of worker-members in management and ownership is considered a beneficial psychological state that leads to positive outcomes both for the cooperatives and their worker-owners and employees.

Before signing off, I want to finish with a question and a call to action for owners: what is the best way to show your employees that you value them for all their hard work over the years? I may be biased, but what better way than to “hand the keys to the farm” to the workers! We all know that if you feel valued in what you do then you’re engaged, so if you want to spike engagement (and productivity!) then consider selling your business to the workers!

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