Better Retention, Better Care, Smart Exit – Is Employee Ownership Right for Your Care Business?

The adult social care sector faces significant challenges, including workforce challenges, rising costs, compliance pressures, which threaten the sustainability of many providers. The Sector Pulse Check 2024 survey found that nearly 3 in 10 care providers are considering exiting the market. That figure jumps even higher among small providers.

But there's a quieter shift happening in the background - one that might just offer a new path for care providers, according to the People Powered Care report (February 2025) by Care England and the Employee Ownership Association (EOA).

It’s called employee ownership (EO), and it’s gaining serious momentum, presenting a practical, strategic solution for providers navigating succession or sustainability.

In fact, there are now over 2,200 employee-owned businesses (EOBs) across various sectors in the UK. That’s up from just 150 in 2014. It’s no longer a fringe idea. It’s a movement.

And for care providers considering an exit, succession, stability, or simply how to future-proof their business, it’s an option worth understanding. An upcoming webinar hosted by Care England and the EOA will explore the employee ownership opportunity for business owners, employees, and the care sector.

Why are so many providers looking for a way out?

The pressures are real:

• Staff turnover is high

• Costs are rising faster than funding

• Insufficient uplifts in local authority contracts

• Rising workforce costs

And yet, most providers don’t want to just sell up and walk away. They want their legacy—the culture, the quality, the community impact - to continue. Could employee ownership offer an option?

What is employee ownership, exactly?

At its core, employee ownership means the people who work in the business also own a meaningful stake in it.

This doesn’t mean every care worker suddenly becomes a shareholder on Day 1. Most EOBs use a trust model (called an EOT), where the business is held on behalf of all employees. The original owner gets paid out over time, usually from future profits, and employees receive bonuses from that same pool - tax-free up to £3,600 a year.

It’s a way to exit with purpose—passing the baton to the people who helped build the business.

What employee ownership offers

The model allows owners to sell their business to the people who know it best - the employees - often through a structure like the Employee Ownership Trust (EOT). This comes with generous tax benefits (including Capital Gains Tax relief) and gives employees the chance to receive annual bonuses tax-free.

But beyond the tax incentives, it’s about something deeper: preserving values and ensuring continuity in a sector where retaining capacity is both urgent and essential.

A model that works for care

Care is a people business. Always has been. Always will be. And this is where employee ownership could stand out as a business model uniquely suited to the sector. It offers a way to retain capacity while delivering continuity and long-term sustainability - not just for providers, but for staff, communities, and the people who depend on their care.

When employees have a genuine stake in the outcome, something shifts:

• Retention improves

• Morale rises

• The quality of care increases

• And staff stop feeling like “just employees” and start thinking - and acting - like owners

A proven concept that works!

According to the People Powered Care report, EO is particularly well suited to a sector like adult social care - a labour-intensive industry where quality and continuity hinge on the people doing the work.

Shaw Healthcare, the UK’s largest employee-owned care provider, is a compelling case in point. Since their transition in 2020:

• 23% increase in turnover and the successful acquisition of new services.

• Staff turnover fell from 30% to under 17%

• Long-term retention improved - 36% of their team has stayed longer than 5 years

• Quality ratings increased from 85.9% to 92%

• Over £5.5 million in tax-free bonuses have been shared with employees

EO didn’t just help them survive. It helped them grow!

But here’s the thing...

It only works if it’s done right. But for those who commit, the payoff is not just financial. It’s cultural. It’s emotional. It’s enduring.

The People Powered Care report is very clear - EO isn’t a magic wand: the benefits only come when the model is brought to life with purpose - through meaningful employee engagement, transparent leadership, and a strong sense of shared mission.

It requires thought, planning, and most of all - a willingness to shift the mindset from "me" to "we." It’s not a silver bullet, but the results speak for themselves.

The bottom line

If you’re a care provider starting to think about what’s next - maybe you’re approaching retirement, maybe you’re struggling with recruitment, maybe you just want a model that aligns better with your values - employee ownership deserves your attention.

It’s not just about a clean exit. It’s about ensuring the heart of your organisation keeps beating, long after you’ve stepped away.

To learn more, join the upcoming webinar on April 15th at 2:00 PM, hosted by Care England and the EOA. You’ll hear directly from sector leaders including Russell Brown, CEO of Shaw Healthcare on how this model is already working in practice. Worth an hour of your time.

You can also read the full People Powered Care report here - a must-read if you’re weighing your options.

Because when it comes to the future of care, perhaps the people who provide it might just be the best ones to own it.

It’s not for everyone. But it could be for you.