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The Quoted Companies Alliance (QCA), in collaboration with Hardman & Co have released a new report “Good jobs come to those who IPO - The importance of going public” which examines the link between IPO and job creation.
In an era where capitalism and the raison d’etre of business is constantly under review, stakeholders increasingly demand that businesses should not exist simply to maximise profits, but expect them to contribute to broader goals, particularly those focused on Environmental, Social and Governance (ESG).
The report examines one crucial element of the “Social” aspect of ESG which all companies - and specifically companies with a recently issued IPO - can use to promote social mobility and wealth distribution.
The key findings include:
In the first 12 months after coming to market
- Companies with a market capitalisation at listing of less than £1bn, on average, grew employee numbers by between 17% and 32%
- In year two, this increased by a further 10% to 22%
- Companies that started with a market capitalisation below £500m, on average, grew employee numbers by between 20% and 34%
- In year two, this increased by a further 11% to 22%.
- Longer-term perspectives show that the workforce doubles by year four
Tim Ward, Chief Executive of the QCA said:
“The results of this research suggest that IPOs are a catalyst for job creation. At a time where society is looking for business to support social mobility, equality and inclusion, we need to ensure that our equity markets remain attractive and open to growing companies across the UK at all times. The potential jobs created as a result of this are a crucial aspect of wealth distribution. Initiatives such as the Hill Review, being aimed at improving the listing environment, are very welcome. What we don't want to see is job creation being threatened, and ultimately paralysed, by overburdensome regulation which puts off companies and directors from the stock market, such as many of the proposals contained in the recent BEIS consultation.”
Keith Hiscock, CEO, Hardman & Co said:
“Our research shows that IPOs create jobs as well as enabling a wide spread of investors to share in the wealth creation. The public markets provide access to the capital that ambitious companies need to turbocharge growth. Every help should be given by government to help aspiring companies along this path.”
