Becoming a Co-Owner of a Company: The Benefits of Employee Participation

What is Employee Participation?

Employee participation means that employees become co-owners of the company where they work. They receive a share of the (virtual) shares of the company. As a result, they share in the growth of the company. They also have more say in how the company operates. This may sound complicated, but it is actually very simple. Imagine that you not only work for a company but also own a piece of it. You would likely be more motivated to do your best because you want your company to perform well. That’s exactly what employee participation is all about.

New Research Shows Opportunities

A large study has recently been conducted on employee participation in the Netherlands. This research was carried out by Utrecht University, commissioned by SNPI. They looked at both large and small companies. The results are surprising. It turns out that very few companies in the Netherlands utilize employee participation. Only 17 out of 100 companies do this. That’s unfortunate because it can have many benefits.

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Why Do So Few Companies Engage in Employee Participation?

The research shows that many companies do not know what employee participation is. As many as 88 out of 100 companies are not or hardly familiar with it. This explains why so few companies apply it. Furthermore, companies often find it complicated to arrange. They think that a lot of paperwork is involved. They are also concerned about the tax regulations. These obstacles prevent many companies from implementing employee participation.

Larger Companies Do It More Often

The research shows that larger companies engage in employee participation more often than smaller companies. Among companies with more than 250 employees, 19% engage in employee participation. For companies with 10 to 50 employees, that figure is only 14%. Publicly traded companies truly stand out: more than half of them engage in employee participation. This indicates that there are still many opportunities for smaller companies.

Benefits of Employee Participation

Employee participation can bring many benefits to a company. Firstly, it helps to retain employees. In a time when it is difficult to find good personnel, that is very valuable. It also ensures that employees are more involved in the company. They feel more connected and are more motivated. This can lead to higher productivity. Moreover, it can be an attractive way to reward employees, especially for smaller companies that may not have much room to raise salaries.

The Netherlands Is Falling Behind

Compared to other European countries, the Netherlands is lagging in the area of employee participation. In countries like France and England, it is applied much more frequently. This is partly because the rules there are easier. In the Netherlands, the regulations are still quite complicated, especially for small and medium-sized enterprises. There are calls for simpler rules so that more companies can benefit from the advantages of employee participation.

Opportunities for the Future

Despite the fact that few companies currently engage in employee participation, there are many opportunities for the future. If more companies learn about the benefits, it is likely that more companies will start applying it. Especially for small and medium-sized enterprises, there are still many possibilities. It can help them attract and retain good employees. It can also improve the workplace atmosphere and ensure that everyone works harder for the success of the company.

Conclusion

Employee participation is a powerful tool that is still underused in the Netherlands. It can help companies motivate, engage, and increase productivity among employees. Especially in times when it is difficult to find good personnel, it can be a smart move. There are still many opportunities, particularly for smaller companies. If the rules become simpler and more companies learn about the benefits, employee participation can significantly contribute to the success of Dutch companies.

At RoundE, we help companies arrange employee participation. We offer a wide range of arrangements, including shares, options, SARs, and profit sharing. We are happy to assist you further! Please contact us for more information.