Infrastructure is about people – we forget that at our peril
While market consolidation will continue, retaining talent remains the true driver of success, says Antony Oliver.
The unprecedented and on-going rash of corporate take-overs across consulting and contracting has, it seems, flushed out one critical factor underpinning the success of businesses in infrastructure – their people.
Last month when news of the AECOM-URS deal broke the key discussion in the market was of the impact that such a coming together would have on staff as they faced the prospect of joining a 95,000 strong team needing to achieve £250M of “business synergies”.
Fast forward to the Hyder-Arcadis/Nippon deal and again the talk is all around how to bring together people based businesses and retain drive and loyalty throughout the process.
While the upturn is clearly driving the on-going merger activity - and the desire towards greater efficiency and market clout will inevitably see it continue - it is reassuring that firms are now realising that achieving ambitious “synergies” simply at the expense of staff is a short term unsustainable solution.
Now this week we saw Balfour Beatty’s management team highlight the value of its people and a desire to avoid mass job losses in its rejection of Carillion’s takeover bid with chairman Steve Marshall pointing out “significant execution risks” of the plan to cut deep into staffing at the firm.
It is in many ways unsurprising as the infrastructure market copes with a long awaited and much welcome upturn. This heating brings with it competition and a desire across the board for more and better quality staff.
Whether you talk to the leaders of big or small firms, the key limiting factor in their ability to take advantage of the upturn with growth and profitability continues to be finding - and retaining - the best staff.
So while the upturn is clearly driving the on-going merger activity - and the desire towards greater efficiency and market clout will inevitably see it continue - it is reassuring that firms are now realising that achieving ambitious “synergies” simply at the expense of staff is a short term unsustainable solution.
As we heard at the recent Infrastructure Intelligence SME round table discussion on business efficiency, the ability to find and retain key staff and so avoid the cost, disruption and wasted training is absolutely critical to running a successful infrastructure business.
Whether you are a small family business as described by Osborne chief executive David Fison this week, a focused SME such as those involved in our round table, or a major global firm such as those involved in the on-going mega-mergers, setting out your stall as a best place for the best people to work remains crucial.
Infrastructure Intelligence understands this. Next week we launch our new careers hub designed specifically to help enlightened infrastructure businesses demonstrate their worth as employers. Whether you are a potential employee or employer it will contain valuable insight into how the best are succeeding in the race to win talent.
Consolidation is an inevitable consequence of the drive towards efficiency. Done right, retaining the critical skills and talents, it will see the best provide even better service to clients.
But consolidation without regard for the most valuable assets that infrastructure firms possess can only be a recipe for disaster.