Interview with Neville Hounsome, HR director at May Gurney
You almost couldn’t write the script. On one side of town – at County Hall, on a cold February day – employees at Norfolk County Council are digesting news that 750 posts (1,000 staff) will be cut, as NCC tries to make savings of £60 million.
On the other side of town, a few miles down the road, staff at infrastructure support services company, May Gurney, are celebrating an 18-month (£35 million per year), contract extension made just days earlier with the same council - a contract that guarantees May Gurney will continue, until 2014, to maintain the authority's 10,000km of highways and recycle the 60,000 tonnes of household/garden waste its residents create each week. It couldn't be a more obvious and ironic demonstration of how one organisation's loss is another's gain.
For the past few years, though, this juxtaposition of fortunes has helped May Gurney (95% of whose long-term contracts are in the public sector) boost pre-tax profits by 31% (to September 2010). As cost-cutting councils rely on the efficiencies of scale that outsourcers provide, this largely unknown company is well on course to hit its target of £530 million in revenues this year. How? It quietly repairs potholes, maintains street lights, recycles waste and, with the acquisition of Scottish utility company Turriff in January, now has an entry into the £4 billion energy support services market.
With other recent extensions at Essex County and Torbay councils, the irony isn't missed on HRD Neville Hounsome, who himself has a public sector HR background - he was previously assistant chief officer, people, with Norfolk Constabulary. "My heart goes out to colleagues in the public sector," he says. "The scale of change is shocking." But, he adds, this is no time to get overly sentimental. His focus is on his own staff, not those of his clients. This can be complex - his 5,150 employees work so closely with authorities that the public will often not distinguish May Gurney employees from council ones. One May Gurney employee, street cleaner Siad Osman, was named 'Council Worker of the Year' at Ealing Council's 2010 employee awards - voted for by residents. As Hounsome admits: "Loyalties of our staff can be mixed, as they can sometimes see themselves more as council workers rather than May Gurney ones.
"Our business is up - we have grown by a third in just the past two years," he says. Most of the increase - some 1,200 - came from TUPE transfers. Such growth brings about its own unique challenges. "Re-tendering is moving on from just cost; we need to think and act differently, on things such as innovation of ideas and going the extra mile for residents we work on behalf of," says Hounsome (pictured above, onsite). "These can be hard to achieve, because, with five-year contracts, there is an element of safety and complacency this can breed."
Such questions, though, are dwarfed by the one, big project that underpins what May Gurney is all about in the next few years: the vision May Gurney's CEO Philip Fellowes-Prynne has set is be a 10,000-employee/ £1 billion company by 2016 - effectively doubling its size and turnover in four years. "It is not unrealistic," Hounsome says, "but it means a very specific HR approach. Some 90% of our new employees come to us by TUPE, so for the vision to be realised, it is on our own management ranks that we actually need to focus - not just recruiting more, but also backing it up with leadership training."
Hounsome calls that training "dealing with the icing on the cake", but says this can't be done without "first making sure the cake is strongly built too". He says he is already making a start in driving up regular recruits, increasing by 100% the number of graduates and apprentices joining May Gurney's 'Starting Out' scheme (12 apprenticeships, 31 trainees and 17 graduates). In addition, 80 of the senior managers are receiving specific leadership development training, with 20 of these being mentored directly by the CEO. Says Hounsome: "To achieve our aim of being the best support services company, our managers are being charged with responsibility for instilling the four main pillars of our business - safety, honesty, innovation and collaboration. These are in turn a product of a further three umbrella priorities - talent management, change management and engagement."
While this might sound like predictable HR-by- numbers stuff, (with a few buzzwords thrown in for good measure), Hounsome is no peddler of nice-to-hear chat. "In the past two years, we have been able to find good talent, but in the next five years, I know we will have to work hard to meet our needs. We will mop up people being shed from the public sector, but we know we can't rely on that alone. This is why we are growing our talent from within, but also making sure we don't lose more staff than we need to."
But this is not 'retention at any price'. In fact, May Gurney has joined in with the rest of the private sector in having pay freezes. Not, one would think, the ideal recipe for growing engagement, especially if outwardly the firms appears to be in the ascendant, but Hounsome is firm on the matter.
"We just need to be grown up with staff," he says. "Attrition is not, thankfully, high [staff turnover fell from 17% in 2009 to 7% in 2010], but we can't rest on our laurels. So our approach has simply been about asking what people need. For instance, we previously held very localised recognition schemes - because the workforce is disparate and regionally organised. But staff asked if it could also be at a group level. There is no reason why it couldn't, so it is something being looked at now.
"We find that as soon as you ask people about how to make work better, they tell you surprising things. We found, for instance, that significant numbers wanted time off to give blood. We wouldn't have thought of this in a million years. Again, this is now something we're working through how to allow."
Hounsome admits achieving this growth vision will challenge his traditional modus operandi. "I am a natural devolutionist," he admits. "In my mind, HR is all about working with management. Making HR more centralised isn't my natural way - which is why manager training at different sites is so important. But I suspect the sort of growth we are planning for will cause some centralisation."
Hounsome is trying to instil a culture of self- management, one where staff and line managers are in the main able to look after themselves, while he deals with the larger stuff. This ranges from a decentralised (but very serious) approach to safety, where employees act as coaches and safety ambassadors in its 'Make A Difference' programme, to monthly 'tool-box talks' where, again, staff and management meet to discuss local HR/working practices and matters relevant to that geographical area. Group meetings are only twice a year, at national forums Hounsome and Fellowes-Prynne chair. "These local conversations will be shared with the national employee forum and I will be reporting back to staff in July on what the latest local meetings have suggested I do," Hounsome says.
The approach seems to be working. May Gurney has won 26 safety awards in the past year, while employee satisfaction in its latest 2010 'Have your say' survey was 88%, up 1% on the year before. Hounsome says this is good, given the economic climate. And improvement in satisfaction directly correlates with rises in May Gurney's client satisfaction rates - up from 8.0 (out of 10) in 2009, to 8.1 last year.
Hounsome thinks there is room for even more improvement. The target rate for client satisfaction is 8.5, and this means equipping managers to handle and present to council more of a bundled package of services. "We are still a low-margin business, so really, our expertise is what we bring to a partnership."
Councils operate a variety of arrangements: joint venture companies that councils and May Gurney run in tandem; strategic partnership agreements, which also include other service providers, such as the one MG has with Norfolk County Council; or local partnerships, such as with Torbay. "We need to be able to be the partner, whatever the arrangement," says Hounsome. "When people's bins don't get collected, we matter to people, so our business is all about service provision and setting the right conditions in place for recognising service."
The area around recognition awards - not necessarily financial - is one Hounsome is looking into, in this respect. "Our innovation and collaboration pillars are very important here," he adds. "I believe that if staff can think and act differently, we'll do the right things and deliver best performance. These themes have always been part of our heritage, but we're just making more of them and internally promoting staff who have been here the longest, and best exhibit these values. Last June, 115 staff were recognised, both for their long service and for service to our clients."
Firms with such lofty growth ambitions are a difficult find in what, for many, is still a flat economy. But Hounsome exudes confidence, suggesting he relishes the challenge. "At Norfolk Constabulary, I changed the shifts of half the workforce and the HR team around me had to be innovative," he says, with an I-did-this-once-I-can-do-it-again manner that hints at confidence rather than cockiness. He is even humble enough to have his own executive coach.
Hounsome is a real HR professional. A prolific networker - "I have 10 or so trusted advisors" - he chairs the CBI's Task & Complete Group, which is drafting the CBI's response to the Will Hutton review on fair pay in the public sector. Hounsome was also previously involved with the CBI's national committee for executive coaching and is a chartered director.
But perhaps the best grounding of all comes from home: he is married to an HRD too. If anyone can steer May Gurney to its next exciting phase of growth, this HRD surely can.