Executive search firm Armstrong Craven, headquartered in Manchester, U.K., has become a majority employee-owned business. The firm will continue to be led by joint managing directors Rachel Davis and Peter Howarth. “We have long believed that the well-known benefits of employee ownership, when combined with our extremely dedicated team, will be a recipe for success, and we expect to see our business go from strength to strength under our new co-ownership structure,” the firm said.
Everyone in the firm, slightly more than 50 people, is now part of the new ownership platform. Armstrong Craven also has plans in place that any new starters will also become owners. “Retention was obviously one of the things we thought about when we took the decision to become employee owned,” said Mr. Howarth. “But it is more than that for us. We ask a lot of our people and they are all experienced and highly committed to providing great work for our clients. We felt it was important that they were able to share in any future success of the business, so better retention is hopefully the result of what we are doing rather than the reason for it.”
Next month, New York City-based Solomon Page will shift to an employee stock ownership plan (ESOP) model to, among other things, enhance the firm’s ability to recruit and retain top talent. ESOPs, according to financial experts, are most commonly used to provide a market for the shares of departing owners of successful closely held companies, to motivate and reward employees, or to take advantage of incentives to borrow money for acquiring new assets in pretax dollars. In almost every case, ESOPs are a contribution to the employee, not an employee purchase. Whether this becomes a new trend among executive search firms remains to be seen, but clearly the pandemic is creating an environment where many of the old rules of managing and ownership no longer apply.
