Employee Ownership Transition: How to Prepare Your Team

Employee Ownership Trusts (EOTs) have gained popularity as a powerful succession planning tool, but completing the deal is only half the story. The real challenge is managing the transition and preparing your team for a new era of shared ownership.

For founders, an EOT can feel like a natural next step: it protects your legacy, secures the future of your business, and rewards the people who helped build it. But for employees, the concept can be unfamiliar, even daunting. How do you bring everyone along on the journey?

Advice from EOT business leaders

Andy Ryder, Corporate Finance Partner at Shorts, sat down with two business owners — Nik Pratap of Pratap Partnerships and Andrew Mills of T Allen Engineering — to discuss their experiences with the EOT process and share insights to help other founders make this succession plan a positive experience for their employees.

Create an EOT communication plan

When an EOT is announced, employees often react with surprise and scepticism. As Andrew Mills put it: “The first question is always, What’s in it for me?”

While the promise of a tax-free bonus grabs attention, the concept of shared ownership can feel abstract or even intimidating for some employees.

Founders who’ve been through the process agree: don’t underestimate the emotional impact of the change. Employees will Google, speculate, and worry about what the future holds. Clear, consistent messaging helps ease those fears and builds trust.

Shorts recommends: Plan a communication strategy ahead of the announcement. Arrange timelines, include new senior management early in the discussions, set expectations, and ensure you give regular updates on the progression of the EOT to teams. If you cause a drought in communication, be prepared for a deluge of questions.

Start early and be transparent

Both Nik and Andrew found communicating the EOT process from day one made the transition much easier for their employees to navigate.

Andrew recommends involving key managers early, well before the wider announcement. This approach not only reassures employees but also equips your leadership team to answer questions confidently.

Transparency doesn’t mean sharing every financial detail, but it does mean explaining:

1. Why you chose an EOT (hint: it should be about more than tax savings).

1. What it means for job security and company culture, and being honest about expectations or upskilling teams will need to take.

2. How governance will work and who will make decisions.

Shorts recommends: Take the time to discuss and establish your EOT’s governance structure. It should ensure teams can give feedback but your experienced specialists and stakeholders can make decisions. Additionally, a good governance gives teams the ability to flex to fluctuating markets and industry trends but avoids turning your business into the Wild West.

Prepare for different speeds of adaptation

Founders adapt quickly to EOTs but they’ve had months to plan the deal. Employees, on the other hand, need time. Nik Pratap best describes it as “two paces of adapting”: shareholders move fast, employees move slow. Expect bumps in the road and plan for ongoing communication, not just a one-off announcement.

Shorts recommends: Make a conscious decision as a team on elements you will/won’t reveal to employees in communications. With every update, consider what follow-up questions teams will ask and provide answers or signpost them to material for more detailed explanations.

Empower your management team

Alongside employees, the transition can be a big shift for managers too. Suddenly, they’re not just running a business; they’re helping steward an ownership model. Training, mentoring, and clear decision-making frameworks are essential. As Andrew noted, “You can’t just hand someone a manual and say, ‘You’re a director now.’”

Shorts recommends: Sit with your managers early on and outline expectations, responsibilities, training opportunities and timelines. Schedule regular check-ins so managers have opportunities to share how they’re progressing and what additional support they might need.

Think long-term: culture and legacy

When done well, an EOT strengthens purpose, protects legacy, and creates a sense of shared responsibility. It takes time, though. As Nik put it: “You’ll be waiting for the sound of pennies dropping.” Keep reinforcing the message and celebrate milestones along the way.

Shorts recommends: Ensure the long-term future of the business is mentioned in updates. It shows employees you are considering the longevity of the business and their roles as a result.

Key takeaways

• Communicate early, often, and clearly.
• Involve key managers before the wider team.
• Set realistic expectations—adaptation takes time.
• Support your leadership team with training and governance frameworks.
• Focus on culture and legacy, not just financial mechanics.

Ready to explore employee ownership?

If you’re considering an EOT, start planning your communication strategy now; it’s the single most important investment you’ll make in the success of your new structure. Our Corporate Finance team at Shorts has guided countless businesses through this journey, from initial planning to post-completion support.

Get in touch with our Corporate Finance experts today and discover how an EOT could work for your business.