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More and more companies are offering some form of employee ownership, according to researchers at Utrecht ľ¹Ï¸£ÀûÓ°ÊÓ. Small and medium-sized enterprises (SMEs) have seen a 4% increase, compared to previous research from 2023. Recent research shows that 17% of companies offer  a form of employee ownership and 32% profit sharing. Large, and especially listed companies, are more likely to offer employee ownership and profit sharing. Only 23% of listed companies do not do this. Despite this, the researchers found that 88% of all managers indicate that they are not familiar with employee ownership, or have little or no knowledge of employee ownership. The Netherlands does not appear to be a frontrunner in Europe. Even though you might think that the Netherlands has an ideal culture for this, says Anne-Sophie Halbertsma of the Utrecht ľ¹Ï¸£ÀûÓ°ÊÓ School of Economics (U.S.E.). There appears to be a lot of room for improvement regarding awareness of employee ownership and profit sharing.

Commissioned by the , the centre of expertise for financial employee ownership in the Netherlands, Anne-Sophie Halbertsma, Ronald Kleverlaan and Erik Stam of the Utrecht ľ¹Ï¸£ÀûÓ°ÊÓ School of Economics (U.S.E.) investigated various issues regarding employee ownership and profit sharing. In their research report, they provide insight into the current state of affairs regarding employee ownership and profit sharing in the Netherlands among companies with more than ten employees. In addition, they examine what and how stakeholders have reported on employee ownership and the development of the societal debate. In addition, they discuss the broader European trend concerning field of employee ownership.

About 600 managers of companies completed a survey with questions about employee ownership and profit sharing: whether and what form(s) of employee ownership and/or profit sharing their company offered, underlying motivations, potential obstacles, and the implementation of supporting policies. Managers who do not use employee ownership were asked why they did not do so.

Motives for introducing employee ownership – or not

Compared to previous research, the researchers see an increase in employee ownership among small and medium-sized enterprises (SMEs) of 4%. Notably, listed companies are much more likely to offer employee ownership and profit sharing. Only 23% of listed companies do not do this.

Shares and share certificates are the most common form of employee ownership. Generally, employee ownership is accessible to (almost) all employees - i.e., not exclusively accessible to higher management layers. Furthermore, employee ownership is often accompanied by additional policies, such as regular updates on the scheme or training courses. This is less the case for profit sharing.

Managers in the survey cite the following motivations for implementing employee ownership and profit sharing: promoting engagement and entrepreneurship, alignment with the company's mission and vision, retaining talent, and sharing wealth. However, they also experience obstacles. Specifically, managing the scheme, embedding it in the company culture, and dealing with tax regulations.

Unfamiliar and undesirable, but also increasing interest

The researchers also asked managers who do not offer employee ownership or profit sharing why this is the case. 29% do not know why. Plus, 88% of the managers in the survey indicate that they are not familiar with employee ownership and profit sharing, or have little or no knowledge of it. In addition, some of the respondents mentioned that offering employee ownership and/or profit sharing goes against the interests of the CEO. Yet, 17% of companies are considering implementing employee ownership and/or profit sharing in the future—11% of managers are interested in at least one form of employee ownership, and 7% are interested in at least one form of profit sharing.

Also a form of 'risk spreading'

The legitimacy of profits being reaped mainly by business owners is often based on the notion of risk. But employees also invest in a company, with knowledge and labor. Meaning they also run risks, says Halbertsma. You could see them as investors in a company. In which case it might also make sense to reward them for their efforts. For example, through variable remuneration which tracks the development of the company, for which they are partly responsible. On the other hand, you could also see employee ownership as a form of 'risk spreading' from the employer’s point of view. Based on which one could argue that employees should have more say in how the company is run. That's where employee ownership can also come in.

Social partners on employee ownership

The researchers, furthermore, considered the disposition of stakeholders and the broader public debate on employee ownership. The worker unions, employers organizations,  the Social and Economic Council (SER) and the House of Representatives sometimes show considerable differences in views.

Trade unions publish positively about profit-sharing and see them as an important part of employment conditions. As far as employee ownership is concerned, the trade unions have remained silent for a long time. Although since 2022, the CNV has clearly positioned itself as a supporter. The union is committed to tax incentives, improving the provision of information, and the introduction of plans that facilitate broad employee ownership. Other unions are more reluctant.

Employers' organisations are not unsympathetic vis-à-vis profit-sharing schemes, although they are not always explicit about this. They emphasize the importance of non-compulsory arrangements. And bonuses or other rewards tied to individual performance rather than company performance receive more attention. From 2020 onwards, a slight upward trend in publications on profit sharing is noticeable. Together with a broader development stressing worker wellbeing, sustainability and social commitment.

Only recently more attention has been paid to other forms of employee ownership

In the broader social debate, a lot of attention is paid to employee participation. For example, through works councils. Yet, hardly any attention goes out to employee ownership, the researchers note. Since 2015, politicians have been talking about stimulating stock options, especially for start-ups and scale-ups. Although it would take until 2023 for the introduction of limited tax incentives. An active lobby persists, by stakeholders like Techleap, to expand the tax incentive schemes. Attention to other forms of employee ownership, with other underlying objectives, remains limited. After a bill was submitted in 2020—which has, to date, not been discussed by the House of Representatives—it remained quiet until 2023. Only then were motions submitted and accepted leading to research into employee ownership, in consultation with the social stakeholders.

Employee ownership in European comparison

European data show that the Netherlands is not a frontrunner when it comes to employee ownership and profit sharing. In Europe, there seems to be a slight increase in employee ownership and profit sharing from 19% to 27,7%, between 2005 and 2021. Although numbers are lower for smaller companies. For companies with more than ten employees, the percentage rose from 4.7% to 5.2% between 2009 and 2013.

In a European context, the Netherlands performs averagely. Depending on your goals as a policymaker, you may want to pursue a frontrunner position. For example, if you want to attract the best talent, but also if you want to maintain a solid position in a competitive labor market more generally, says Halbertsma.

France and the United Kingdom (UK), for example, have a long history of incentivizing employee ownership and profit sharing schemes. In France, the focus is on profit sharing. Schemes have been made mandatory by law for companies with more than ten employees (since 2024—prior to this ruling the threshold was at 50 employees). This has led to a growth from 35% to 55,6% of all companies with more than ten employees that offer some form of profit sharing. In addition, employee ownership increased from 4,7% (2009) to 8,6% (2013).

In the United Kingdom, employee ownership has also been used in privatizations. For example, to keep knowledge and experience within the organization, or to avoid selling public bodies to private equity.

In the UK, the introduction of the Employee Ownership Trust (EOT) in 2014, in particular, has played an important role in further stimulating employee ownership. This often happens when owners retire and are unable or unwilling to keep the company in the family, or do not want to attract outside capital, Halbertsma explains. Or because they really want to pass something on to their employees. And it has also been used in privatisations in the UK. For example, to keep knowledge and experience within the organisation, or to avoid selling public bodies to private equity.

Various tax schemes for profit sharing and employee ownership have also been introduced in the UK. Profit sharing in companies with more than ten employees has risen sharply; from 8,3% in 2009 to 26,5% in 2013 and even 35,3% in 2019. Employee ownership also increased, from 6,2% in 2009 to 8,3% in 2013.

End of obscurity

Many managers have little to no knowledge of employee ownership and profit sharing, or do not know why they would implement it. This unfamiliarity is also evident in the broader social debate. Wherein trade unions and employers' organizations have only recently expressed themselves about profit sharing and employee ownership. Politicians are still very much focused on the use of stock options, which are particularly relevant for a smaller target group of start-ups and scale-ups. Whilst there are also opportunities for SMEs and large companies.

It's a flexible tool that you can use for very different policy purposes.

There are still quite a few steps to be taken in promoting certain forms of employee ownership. It is a flexible tool that can be used for a wide variety of policy purposes, says Halbertsma.

If you promote models such as the EOT in the UK, for example, you force professionals to do the same. When you come to the notary to set up an employee ownership scheme, you want them to know what you are talking about. You’d want an accountant to know how to process it in the books, and you’d want for a manager to know how to organize employee ownership within the firm. In the US, they have set up an agency to help with such issues at the federal level.

In the Netherlands, a number of parties are already involved in informing and promoting employee ownership, says Halbertsma. The SNPI and the Regional Development Agency Utrecht Region, for whom we conducted research, for example. And there are platforms like The Share Council and Captin. I can also imagine that the Chamber of Commerce, as the first point of contact for companies and entrepreneurs, might play a role in this.

You might think that the Netherlands has the ideal culture for employee ownership. There is prosperity, (co-)determination is established via, for example, works councils, and we compete with international companies for talent, among other things. In addition, we have highly educated professional services professionals, a vast SME sector and large, internationally operating, innovative companies. In short: there are many possibilities and opportunities for strengthening employee ownership.

Research team

The research team consists of Anne-Sophie Halbertsma (principal investigator), Ronald Kleverlaan and Erik Stam, all affiliated with the Utrecht ľ¹Ï¸£ÀûÓ°ÊÓ School of Economics (U.S.E.).

More information

Would you like to know more about this research? Please contact Anne-Sophie Halbertsma: a.s.halbertsma@uu.nl.