At its annual conference today the Irish ProShare Association (IPSA), the voice of employee financial involvement in Ireland, called on Government to take decisive steps in Budget 2013 to encourage employee financial involvement in companies. The group said that employee financial involvement has an important role to play in boosting Ireland’s competitiveness and aiding economic recovery. The conference took place today at PwC’s offices in Dublin and featured economists Constantin Gurdiev, Jim Power and Brian Lucey.
Speaking at the conference, IPSA chairman Gary Boyle said: “As a small open economy, it is vital that we remain competitive. Research has shown that employee financial involvement can increase the efficiency and profitability of organisations without adding to their costs, which enhances competitiveness and employee engagement.
“In particular, share ownership by staff has tremendous economic benefits. The Nuttall Report, which was published recently in the UK, shows that having a stake in the company gives employees the incentive to work harder, turn up for work more frequently and innovate. Between 2008 and 2009 employee-owned companies saw sales growth rise above 11% compared to less than 1% for non-employee owned companies. Presumably as a direct result of those sales, job numbers jumped almost 13% for employee owned companies during the same period as opposed to just 2.7% for traditionally owned companies. Productivity was aided by much lower absenteeism in employee-owned companies, at around 13% lower, versus those whose shares aren’t more widely spread.
“There’s very often some reluctance among business owners to part with any part of a company that they’ve built up. But this is blinkered thinking that costs business owners money in the longer term. The studies show that everyone gains when employees have a stake in their own futures. US corporations routinely have share ownership schemes for their employees because they know it works.”