Sarah Higgins looks at the HR challenge of industry consolidation
The phone rings and our managing director is on the line. We're looking at another possible acquisition. This is good news for the group. But as group human resources director, my mind is racing.
There's not a lot of time to catch your breath when you're part of the non-stop consolidation of the insurance broking industry.
Oval's growing fast. We've made six acquisitions since the group was formed in October 2003 and we're expecting even more in the next 12 months.
It's a challenge trying to implement the integration of the group and bed in the last acquisition when you're already thinking about the next deal - and not just for operations, IT and communications. It's a challenge for HR, too.
Businesses are bought for their assets and for the contribution those assets can make to the group as a whole. In a service industry such as insurance broking, a business's strength lies largely in its people.
That's why it's important to involve HR as early on as possible in the process - not necessarily because there might be redundancies to handle, because very often, there won't be any. Our policy at Oval is to avoid making redundancies as far as possible - quite simply because the strength of each business is its people.
Even when there are no redundancies, there are other issues to think about. And a lot of these will be running through my mind when I take that call from the managing director.
Each acquisition will bring new sets of employment terms and conditions and benefit packages, together with different people policies and procedures. You will need to develop a group template for all of these things - bringing them together in an employee guide and consistent benefits package. That's a lot of work.
Acquisitions come in all shapes and sizes and each one tends to be different from the last. Some will be standalone - and will remain more or less as they were. There are usually fewer issues to handle with these. Others will involve a transfer of people - either into or out of their existing offices. This obviously means some upheaval for the people involved.
When building a group, you need to pay a lot of attention to individual cultures, which can vary from company to company and from location to location within the same company.
Many of the broking businesses we talk to are owner-managed - and so the culture has been largely determined by that person, who set the business up from scratch. The HR director needs to develop a close relationship with them, understand their business culture and explore how they're going to work together.
Of course, a successful consolidator is only going to consider buying businesses that share its own values - in terms of how you do business and how you service clients. Oval looks for entrepreneurs who have developed successful local businesses and who are passionate about delivering a quality service to clients. We wouldn't be interested in companies that have a completely different set of values.
Good communication is, as ever, the key to making integration work and pulling everyone together. And I've found that it's important to get senior management directly involved in talking to people and listening to their concerns. People value this immensely.
So our chief executive takes time out to visit the different offices and hold question and answer sessions.
And the managing director, too, makes regular presentations across the group on company performance and strategy and gives updates on the integration projects.
You have to make both new and existing colleagues feel comfortable and special - that they're a part of a growing business that's going somewhere.
They need to know they can continue to offer a quality service to their clients at the same time as benefiting from greater investment, economies of scale and potential for growth. The senior management help in getting this message across. Otherwise people may lose their motivation.
One way to ease through changes is to work with a specific "champion" in each area - someone who can help the central HR team with integration projects. Those champions can help you understand how a group policy might be best integrated in the business at a local level and communicate this with the teams.
None of the businesses we've acquired has had an HR team or even a full time professional person in that role. But there's normally been someone who's helped to deal with people issues. It helps to be able to sound them out on group policies.
Of course, no matter how much you value and want to retain people, some will leave you. We are all individuals with different aspirations. And when change happens, it gives people a chance to step back and think about their direction in life. "I've been here a long time. Is this really where I want to be? Perhaps it's time to make a break," they say.
Although you'll be disappointed, you need to understand their position, say thank you and wish them good luck - then concentrate on finding good quality people to replace them.
At Oval we have reluctantly said goodbye to a few people, but we have had some excellent people approach us in the last 12 months, wanting to join and grow with us.
People need as little uncertainty as possible. So you must be up front about any changes to working practices. In all likelihood, there'll be no changes for most people and some changes for others. In a few cases, some people might lose their jobs.
To sum up, the consolidation of the insurance broking industry continues apace - and the biggest driver of growth for many ambitious broking businesses is making acquisitions.
But this strategy will break down if enough thought isn't given as to how to integrate the component companies and how to communicate effectively. This is a priority for the new people as well as a key factor in the retention of existing staff. IT
' Sarah Higgins is group human resources director at Oval Insurance