Retiring owner of Co Down engineering firm hands business to employees amid lack of succession plans and 'hesitant to put the company on the market'

Holywood engineering firm, SCC Ltd, has become the most recent Northern Ireland company to move to an employee ownership trust model.

The MEP (mechanical, electrical and plumbing) consulting engineers has made the transition to an employee ownership trust (EOT) model which essentially, gives the team more responsibility on ensuring the business continues to provide a quality service and remains profitable.

The decision was taken as founder and managing director, Stephen Clarke, was approaching retirement and with no succession plans in place, was hesitant to put the company on the market.

EOT offers workers a share in the profits of the business and encourages them to be more actively involved in the decision-making process of the company.

SCC was founded in 2003 by Stephen and his wife Jane as an M&E Consultancy, providing M&E design services, M&E Surveys and Commissioning Management. Stephen worked alone for 10 years before starting to grow the company in 2013. The company has now 16 employees and counting with some new starts lined up for August & September.

Stephen, who is coming up to retirement age, wanted to give something back to the team who have helped to grow the company that SCC is today while also securing its future and jobs.

Laura Buckley, director at SCC Ltd, said the support of the EOI board was invaluable to the company as it undertook this new approach.

“The first introduction we had to employee ownership as a concept was at a breakfast event organised by Employee Ownership Ireland. As we were making a decision about the future of the company at that time, the insight proved to be invaluable and the more we heard about EOTs, the more it sounded like the best option for our team.

“The obvious benefit is that as employees become owners, performance improves, the relationship with the workplace improves and this creates a better environment for overall business growth.

“But more than that, the move has protected the company and the 16 number of jobs we offer. It has enabled us to stay rooted in Holywood and contribute to the town’s local economy and helped to retain our positive ethos and culture, things which could not be guaranteed from a buyout or takeover.”

The newly formed trust acquired 75% majority ownership. The other 25% has been split amongst four key staff who have contributed to the growth of the company and additional shares have been held to distribute in the future.

"In terms of profit share we are committed to being fully transparent with this. All employees will be entitled to profit share once they have been with the company for 1 year. When you join you automatically become an employee owner and when you leave, this right leaves with you. We are aiming to pay out profit share twice a year which will depend on profits made that year, but for all members of the team the move will bring about a salary increase as profits are shared more equitably throughout the business,” said Laura.

However, with the reward, there is also more responsibility on staff members, particularly around the future direction of the business.

"While the directors still have overall responsibility for the day-to-day running for the company, our Trust means all colleagues now feed into our strategy, we speak more openly about the future of the business and decisions are made more as a collective which so far, is having a positive impact on our operations.”

Joan McCoy, director at White Ink Architects and EOI board member, said it was encouraging to see the number of EOTs in NI grow but more needs to be done to increase awareness of the business model.

She explained: “Working with the team at SCC Ltd as they journeyed towards becoming an EOT was a positive experience, and I wish them continued success as they embark on a new, exciting phase for the business.

“This move signals an exciting time for the wider employee ownership community in Northern Ireland as more and more businesses are actively considering this as a viable succession plan, and we are well on way to achieving our ambition of creating 10,000 employee owners here by 2030.

“It is particularly welcome that the Economy Minister, Dr. Caoimhe Archibald, has recently announced the department will make annual funding available to strengthen the awareness of employee ownership here, which will largely be channelled into providing funded feasibility studies for businesses which are interested in moving to the model.”

Currently there are 18 EOTs operating in Northern Ireland including Gilbert Ash, S&W Wholesale, People 1st and White Ink Architects. The recent surge in momentum has been driven by the launch of Employee Ownership Ireland which was set up earlier this year with a view to create 10,000 employee owners by 2030.

Employee Ownership Ireland provided support to SCC Ltd throughout each stage of the transition process and worked with the organisation to undertake a funded feasibility study.