Is employee ownership the missing piece in the social mobility jigsaw?

The Labour government wants to break down barriers to opportunity – employee ownership can do the most for those who start with the least.

In the world of DE&I, we talk a lot about creating opportunity for those with less advantage. We talk far less about the thing that really shifts life chances: ownership.

Labour’s renewed focus on social mobility — its “opportunity mission” to break the link between a child’s background and their future success — is long-overdue. But if the policy conversation stops at education attainment gaps, skills and employment pathways – as important as these are – we’ll keep missing the point. People don’t move up and stay up based on skills and opportunity alone.

Wages pay the bills. Ownership creates resilience, agency and access by giving everyone a stake in their employer and the value they collectively create.

Resilience, agency and access

First, it tends to create more stability. Employee-owned companies are typically built for the long term. They don’t have the same pressure for short-term extraction and can be more focused on sustainable growth, retention and training. That matters because insecurity hits hardest at the bottom. For those without family capital, inherited assets or a quietly compounding trust fund, one bad month can knock an individual or household sideways.

Second, it changes how profits are shared. In the conventional model, value flows upwards: dividends to external shareholders. Employee ownership makes it easier to distribute profits to colleagues — and crucially, to do it fairly.

For someone early in their career, a meaningful annual profit distribution can be the difference between staying stuck and moving forward: debt reduced, savings started, a course paid for, a rental deposit found. Small steps, compounding over time.

Removing barriers

There’s a third benefit that’s often overlooked: profit for purpose. When colleagues collectively own the business, the conversation about surplus changes. It becomes entirely reasonable to earmark a portion of profits for initiatives that tackle disadvantage directly — not as vague CSR, but as practical support. Subsidised housing partnerships. Deposit schemes. Hardship funds. Paid training pathways for those without formal credentials. Stuff that actually removes barriers.

But more than that, it can create a healthy entitlement amongst employees that is so often lacking in those from lower socio-economic backgrounds, and so abundant in those with privilege. People feeling like they deserve to be treated fairly through common and collective ownership.

If Labour is serious about social mobility, it should tackle root causes through effective education and employment policy, but also, whilst encouraging collective ownership on a far greater scale.

By Martin Currie, Chief Executive at Citypress

 

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