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HR News Update – Employee-owned businesses still need clear direction

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Commenting on ‘Employee Ownership Day’ and news that start-up companies are behind a rise in the number of organisations adopting ‘employee ownership’ business models, KPMG’s David Fairs argues that how they handle inter-generational demands will be key to success or failure.

A partner in KPMG’s People Powered Performance practice, David says: “Creating a fair deal in the eyes of different generations of the workforce is no easy task, but one that organisations must grapple with in their formative years.  After all, it may make business sense to invest a chunk of the early profits in today’s projects to secure future market share and growth tomorrow, but the risk is that one generation could end up paying for the sins of the past.  In other words, younger workers may not reap the rewards their endeavour deserves if a business is still paying the cost of initial mistakes and the best way to avoid this is to create a sense of ownership – one where reward is always linked to the ‘here and now’.

“Businesses also need to ensure that their staff are motivated and that they are comfortable in the knowledge that their long-term contribution is valued.  It’s easy to mistake a sense of value with the size of the pay cheque, but if start ups truly want to engage staff and ensure they share a journey to success the onus is on leaders to share their visions, ensuring that the direction of travel is clear.  Anything less and the risk is that employees lose faith in the business idea before it even gets off the ground.”

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