EO is the Answer: Answer Digital is EO
Tuesday, August 4, 2020
Founded in 1998 by Gary and Kate Parlett, Answer Digital is an award-winning digital transformation company, employing over 80 people in their Leeds and London offices.
Answer Digital offers a range of digital services that enable clients to realise their digital transformation ambitions by bringing together an understanding of people, technology and creative design expertise to reimagine what is possible. This approach has led Answer Digital to work with a number of high-profile clients across healthcare, retail and finance including NHS Digital, Kings College Hospital, Morrison’s and Civica. This has included critical digital support during the covid-19 lock down period.
In time for EO day 2020 on 26th of June, Gary and Kate sold 75% of their shares to an Employee Ownership Trust (EOT), which holds them on behalf and for the benefit of all the employees in Answer Digital.
Answer Digital has a long track record of investing in its people with over half of the employees alumni of its Academy, created to nurture the next generation of talent for the company. For Gary, Kate, and the Answer Digital team, employee ownership represented an alternative to the more traditional options of a trade sale or private equity exit. Continuity and growth were at the heart of Gary and Kate’s vision for the business going forward, and employee ownership enables Answer Digital to retain its fantastic employee-first culture and values as it continues to grow.
Under the new employee owned structure, the EOT will be governed by an elected employee trustee director, an independent external trustee director, and a Founder director (Gary) for the period while the founders are owed money.
As well as securing ownership succession for Answer Digital, the EOT is also a tax efficient structure. Gary and Kate will receive the cash from the sale of their shares free from capital gains tax and the new employee owners can receive an income tax free bonus of up to £3,600 each year.
For Gary, ownership empowers every employee, and allows them to share in the success that they have all built together, making them feel invested in Answer Digital’s continued growth. He said, “We wanted to address the balance between work and reward and unite people behind a common purpose. We are passionate that this is the best route for our business to continue to grow and deliver award-winning solutions. When we first launched the business it was called the Ultimate People Company and now we have the opportunity to live up to that promise.”
Employee-owned businesses often have higher productivity, greater levels of innovation and are more resilient to economic headwinds. Employees have greater scope to engage and contribute towards the business they are all a part of, even more so in difficult economic times.
Baxendale advised on and implemented Answer Digital’s new employee owned structure as well as providing training and communications support for the organisation.
Our congratulations go out to Gary, Kate and everyone at Answer Digital on their transition to employee ownership.
