Network ROI – Leading the Way for Employee-owned Tech Companies in Scotland
Network ROI completed its employee buy-out in January 2018. Kevin Nightingale, marketing manager, Network ROI, explains the benefits of employee ownership for tech firms.
Edinburgh-based managed service provider, Network ROI, is blazing a trail for employee ownership (EO) in the Scottish tech sector.
Former MD and founder, Sean Elliot, opted to take the employee ownership route as he planned his exit strategy in 2013, eschewing traditional exit strategies such as a trade sale or management buyout.
Reasons for choosing EO included:
• Safeguarding jobs of Network ROI staff and keeping jobs in the local economy
• Protecting vital client relationships, many of which had developed over a long period
• Rewarding loyal Network ROI staff for their hard work helping to grow the company
• 100% capital gains tax relief for the business owner
• Tax incentives for employee owners include the potential to earn a tax-free bonus of up to £3,600 per year per employee
• A democratic business model which allows staff a greater say in the running of the business
Scotland to become EO world leader by 2030?
The Scottish Government recently unveiled plans to help make Scotland the EO capital of the world. The formation of a new leadership group, ‘Scotland for EO’, aims to help more Scottish businesses become employee owned. First Minister Nicola Sturgeon recently unveiled plans to increase the number of EO businesses in Scotland from 100 to 500 by 2030.
Shared ownership is gaining momentum in Scotland as business owners seek alternative ways to sell their successful companies. Considered a fairer way to do business, employee ownership offers workers the opportunity to own a slice of their company – a tactic many hope will reduce an already massive wealth divide while delivering a more sustainable and democratic business model.
Evidence suggests employee-owned businesses are more productive than their counterparts. Staff retention figures are generally higher, and job satisfaction among employee owners is also buoyant. The formation of an EO Council has seen many new ideas come to fruition, helping to drive the culture of Network ROI forward. Teaming up with Ritualize, an Australian-based health and wellbeing app, Network ROI has inspired many team members to consider their general physical and mental wellbeing.
Stating the case for employee ownership
Network ROI MD Adam Johnson attended the Employee Ownership Association annual conference in Birmingham this November. He said: “The EOA Conference is a fantastic event. The atmosphere was warm, friendly and buzzing with people sharing stories of their EO journey with other employee-owners. I would highly recommend any business owner that wants to be a part of such an inspiring business movement to get involved.”
The future of Network ROI
Network ROI has achieved sustainable growth over the past 15 years, employing 30 staff at its base on the outskirts of Edinburgh and five field engineers to support clients in England and Wales. The senior management team and board are comprised of business and technical experts, offering a deeper understanding of the challenges faced by clients. Demand for cloud services, IT security and a shift towards a multi-device business environment have contributed to the continued success of Network ROI.
The company recently debuted on the prestigious MSP501, a list of the world’s best and brightest MSPs. In another Scottish first, Network ROI is the only Scottish company, as well as being one of the top 20 UK companies, to feature on the list.
Traditionally, the business has focused mainly on the central belt of Scotland. Conversations are taking place with companies in Dundee, Aberdeen and Manchester as Network ROI aims to create new opportunities.
Johnson said: “Scotland is a great place to do business, punching well above its weight. Roslin will always be our home and we look forward to bringing more skilled technology jobs to the area.”