Zaha Hadid Architects Announces Transfer of Employee Ownership

Zaha Hadid Architects Announces Transfer of Employee Ownership,

A week ago, Zaha Hadid Architects (ZHA) announced its transition to employee ownership through its Employee Benefits Fund (EBT).

As the late engineer began this experiment in 2011,

“I think there should be no end to the experiment.”

The company then contextualized the decision as an attempt to build a more democratic profession,

one to which access would be more equal in which every employee would have a voice.

The move was the culmination of a growing trend as, over the past decade,

an increasing number of companies have turned to employee ownership plans.

The reorganization also signals a more significant shift in the industry from hierarchical management to more democratic models.

ZHA was not the first to implement this experiment, although it is the most well known to date.

With offices in China and the UK, the 42-year-old practice now employs more than 500 employees.

So could this decision represent a seismic shift that will not only create ripples,

but waves in the profession?

Employee ownership schemes are based on a trust,

while most businesses are owned by individuals.
In this model, inventory is distributed among employees based on criteria such as tenure or salary,

among others.

Whether it’s an EBT plan in the UK or an employee stock ownership plan (ESOP) in the USA,

there are many options within stock sharing models to build a bridge between a company’s earnings and its employees.

For example, a company may choose between direct, indirect, or hybrid models,

each with different ways of building its boards of directors’ relationships with employees.

Employees are meant to be motivated by owning stock in the company,

and will be motivated by its financial success;

there are also the personal benefits that come with insurance and income tax exemptions.

As baby boomers (owners of most large companies) begin to reach retirement age or the end of their careers,

the decision to switch to employee ownership models is often tied to succession planning and the need to prepare for leadership transitions.

Yet the implications are even greater, and as the industry adjusts to the cultural

and economic realities of recent graduates,

ZHA may be at the forefront of generational transformation.

Most millennials have accepted that unlike their parents, who have held one or several jobs throughout their lives,

they are likely to work at many different companies before retirement.

Some have even called it the “job-hopping generation”,

yet the model set by EBTs and ESOPs, often leads to increased employee retention and job security.

It also creates new possibilities for the transfer of wealth between generations,

and for the company’s point of view, this facilitates the building of experience.