Mike Millmore, Philip Lewis,

Mark Saunders, Adrian Thornhill

and Trevor Morrow

StrategicHuman ResourceManagementContemporary issues

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Part 1 Case Study: Strategic Human Resource Management at Halcrow Group Limited154

and minds’. This is typical of companies employinga high proportion of professional staff who tend todefine, and act upon, their own standards of pro-fessional behaviour.

An HR strategy can be seen to be emerging atHalcrow, one that will demand vision and skill fromthe HR function. According to the HR director theseare not qualities which the function has always dis-played. She feels that HR has a major job to dobecause it has been perceived by Halcrow managersas ineffective in the past. Halcrow managers are criti-cal and demanding and expect to receive effectiveassistance from the service functions. However, theimportance accorded to technical excellence withinHalcrow had created a culture where service func-tions, such as HR, were under-valued. Halcrow hastraditionally called its staff ‘professional and techni-cal’ and ‘non-professional and technical’ – thelanguage reinforcing the message of P&T staff asfee-earners being the most important people in theGroup. In addition, the HR function has been largelyadministrative rather than strategic, a situation that isnow changing because of the HR challenges thatHalcrow faces. The HR director is very conscious ofdeveloping professionalism in the HR team by devel-oping team members’ confidence and helping themacquire professional qualifications through the Char-tered Institute of Personnel and Development (CIPD).The HR director argues that it is essential to developa more customer-focused HR team. The lead pro-vided by the HR director is important. Both she andthe training manager have experience in leadingchange programmes in their previous companies. Itis also a help that the HR director has a close linkwith the chief executive officer. This enables her toask for the support necessary to drive through theHR initiatives. The HR director has also started givingincreasing amounts of ‘professional’ work to herteam members. An example of this was a casewhere redundancies flowed from business re-structuring in one part of the Group. One member ofthe HR team handled all aspects of this. The HRdirector is also paying attention to mentoring andcoaching her team.

International SHRM at Halcrow

Halcrow has a clear strategic aim in relation to itsinternational business. It wishes to be a genuinelyinternational business rather than a UK businesswith international operations. It is part of Halcrow’scorporate business strategy that the Group wantsto develop the scale of its international business.The plan is to pursue this growth through acquisi-tions in countries overseas. Business groups

(e.g. Water) have to prepare business plans whichinclude plans for acquisitions. These plans arereviewed by senior management. Plans with regardto acquisitions have to be coherent with the overallbusiness strategy, particularly in relation to thebusiness sectors in which the companies to beacquired reside.

The scale of Halcrow’s international business canbe seen from the fact that approximately 40 per centof the Group’s workforce are engaged overseas. Inthe past, the Group’s international staffing policywas to send expatriates from the UK to work onoverseas projects. However, in recent years this hasaltered. The level of expertise of the available work-force in developing countries such as China andPakistan, and the relative cost of labour in the devel-oping countries compared with the UK, means thatthis option is now far less attractive. At the time ofwriting, only 3 per cent of the international Halcrowworkforce was UK expatriates.

The Halcrow overseas offices operate as sepa-rate companies within the Group, albeit that theUK-based Corporate Support Services providesupport to these offices. There has been no HRfunction in any of these offices until recently. Thefirst overseas HR manager has been appointed inDubai, UAE, where there are approximately 750employees in the region. In addition to the smallnumber of expatriate employees and the staffemployed in the overseas companies there is agroup of transnational employees who come formHalcrow’s eastern European, Chinese and Asianoperations. The Group has also established a com-puter-aided design bureau in Dubai.

The fact that there has been no HR function inany of the offices until recently suggests that HRhas experienced a very low profile in Halcrow’sinternational operations. In fact, the function in allbut the most basic administrative sense has beennon-existent. However, the HR director is keen forthat to change and is pursuing a vigorous pro-gramme of visits to the regional offices within theGroup to promote the advantages of HR. A catalystfor this drive is the Group’s recently published codesof behaviour. These stress the need for honesty,transparency and integrity in all Halcrow’s businessoperations and state that all employees will:

● Treat everyone with respect, trust and dignity

● Help each other – share experiences and lessonslearned

● Be polite

● Never undermine anyone directly or indirectly

● Work together to resolve disagreements

● Be professional and ethical at all times

Part 1 Case Study: Strategic Human Resource Management at Halcrow Group Limited 155

● Listen to others’ points of view

● Be honest and open (Halcrow, 2003: 3).

Two aspects of the code of behaviours areimportant here: the need to help each other andlearn from experiences and to be professional andethical at all times. It is felt that HR has an importantpart to play in affecting the values of all employees.The HR director’s predecessor did not see promot-ing the HR role in generating the appropriate codeof behaviours as an important activity, but this isnow being pursued through the writing of HR poli-cies and disseminating them in the overseasoperations. The HR director is also keen to act as asounding board for international managers and isgenerally keen to promote the visibility of HR. Grad-ually, good relations are being built between HR andthe international management teams to the extentthat they now see the point of taking HR seriously.They can appreciate that having a local HR pres-ence would provide them with useful support.Hitherto there have been no policies as there hasbeen no HR presence. It is felt that it is important tosupport the regional offices in achieving the Group’sstrategy of making Halcrow a first choice employerfor the best people and the place where its employ-ees want to work.

Evaluation of SHRM at Halcrow

Although Halcrow has had a staff council for nearly30 years, and through this has involved employeesin the formulation of group policy and direction,there has until recently been only limited formalevaluation of HR initiatives including strategic HRM.Training courses were and continue to be evaluatedby traditional end of course questionnaires but,prior to 2000, only limited attempts had been madeto link evaluation of HR initiatives to the strategicdirection of the Group.

In 2000, Halcrow introduced the Group-wide‘employee survey’ to measure staff satisfaction, andprovide information to help the organisation improveits leadership, management and skills base. Thisquestionnaire is administered biennially to employ-ees worldwide by an independent company, KaisenConsulting Ltd, who undertake the data analysis,provide Halcrow with a report and, in conjunctionwith Halcrow, run follow-up workshops. The aims ofthe survey are outlined clearly in an accompanyingletter with a clear focus upon identifying strengths aswell as areas that require improvement.

The core content of the questionnaire hasremained substantially the same between years toenable benchmark comparisons, although some

new questions have been added. In 2004 approxi-mately 30 questions were used to ascertainemployees’ views on ten key areas. These includedthe direction (of the Group), clarity about their job,client focus, their competence, resources to dotheir job, empowerment, involvement, cooperationfrom others, feedback to them and recognition.Supplementary questions to assess employee com-mitment were also included. Virtually all questionsemploy five-point Likert-type scales to recordanswers. In addition there are spaces for commentsand a few open questions to provide further oppor-tunity for respondents to highlight key issues.Locational information such as regional office, busi-ness group and skill group, is included to enablecomparisons although, to preserve confidentiality,results for a sub-group are not provided if less thanthree people in that group completed the survey.Response rates for the survey are high, with over67 per cent of employees worldwide returning theirquestionnaire in 2002 and 72 per cent in 2004.

Through the 2000 employee survey, Halcrow wasable to identify those areas of strategic humanresource management highlighted by employees asbeing most in need of attention. These were: feed-back, recognition and involvement of employees.Benchmarking the surveys in 2002 and 2004against the 2000 employee survey, has allowed Hal-crow to establish the extent to which these issuesare being addressed through HR initiatives. Resultsfrom the surveys suggest that there have beenimprovements in all three areas. However, data fromthe survey and other sources suggest that there isstill more to be done to improve these and otheraspects of human resource management such asemployee engagement. Halcrow’s senior managersare currently working with Kaisen Consulting Ltd toexplore the precise meaning behind these resultsand develop clear action plans to improve the man-agerial environment. As part of this they are creatinga process through which employees are involved indeveloping the actions.

Using data from Halcrow’s employee survey theconsulting company calculates an HR EnablementIndex for the Group. This is an average score ofresponses to all the questions in each of the ten keyareas. This index provides an overall indication ofthe extent to which employees are engaged withtheir work within the Group. Average scores foreach of the ten key areas are then be used to high-light those aspects where satisfaction is relativelylow and where action may need to be taken. Com-parison of the 2004 HR Enablement Index scorewith that for 2002 revealed that there had been nosignificant change in employees’ engagement.Retention rate data for the same period revealed

Part 1 Case Study: Strategic Human Resource Management at Halcrow Group Limited156

that this was within a context of declining labourturnover and led the HR director to ask whyengagement had only remained constant in a labourmarket characterised by a shortage of suitablyqualified people? The answer to this question iscurrently being sought from a range of data includ-ing employee exit interviews, staff workshopsaround the world to discuss issues associated withemployee engagement and further analysis of theemployee survey data.

Data from other surveys are also used to evaluateSHRM within Halcrow. These include the use of theBusiness Excellence Model (BEM) self-assessmentprocess (British Quality Foundation, 2001) to helpilluminate issues raised in employee surveys, staffworkshops focusing upon issues of particular impor-tance, and internal customer satisfaction surveys. Inaddition they argue that an employee ‘feel-goodfactor’ is also important.

A range of secondary data provides further infor-mation from which to monitor, evaluate, learn andimprove SHRM initiatives. For example, Non Compli-ance Reports from external auditing by the BritishStandards Institute (BSI) in relation to quality stan-dards and by clients had highlighted a range ofissues. These related to a number of employee induc-tions not having been undertaken properly and insome cases records of training being incomplete.These have now been addressed. Similarly, the new360-degree feedback and client satisfaction surveys,such as those discussed earlier, have emphasised theimportance of initiatives to ensure employees engagewith the company and also understand andempathise with the client’s needs.

Increasingly, Halcrow compares itself with othercompanies in the sector using a variety ofapproaches. In some instances this benchmarkingis undertaken for prospective clients as part of thetendering for new contracts process. For example,the UK Highways Agency uses ‘Capability Assess-ment Testing’ to benchmark potential suppliers andassess their alignment to what they require. Infor-mal benchmarking is conducted through contactsin joint-venture companies or other industry con-tacts to share best practice, discuss issues that arepertinent to the sector such as skills shortages and,through surveys, to establish benchmarking datarelating to salaries, benefits and the like.

Halcrow sees monitoring and evaluation asessential to knowing whether or not SHRM initia-tives within the ‘Act now’ programme are effective.Within these means of evaluation, the HR directorrecognises that the nature of the measures is still

evolving and needs to be more closely aligned tothe future direction of the Group and the centralityof the human resources to this.

1. Provide a brief overview of Halcrow Group’sstrategy.

2. Outline the linkages between Halcrow Group’sstrategy and its strategic human resourcemanagement.

3. What obstacles do you think that Halcrowmanagement will face as it works to change theGroup’s culture from one dominated by technicalexcellence to one that also embracescommercial awareness?

4. What measures might Halcrow take to increaseits retention of young professional graduates?

5. (a) What hurdles do you think that Halcrow willhave to overcome in its attempt to ensureinternational employees adopt the Group’scodes of behaviour?

(b) Now visit the Halcrow Group web site(http:/www.halcrow.com) and read Halcrow’sStatement of Business Principles, payingparticular attention to the Code of BusinessPractice. Expand your answer in the light ofwhat this tells you about the Group’s viewsregarding business integrity, and what isexpected of Halcrow staff.

6. To what extent do the data collected by theemployee survey allow the HR director toevaluate the extent to which HR initiatives aresupporting the Group’s strategic direction?

7. (a) How does Halcrow currently make use ofprimary and secondary data to evaluate theextent to which initiatives to engageemployees within the Group are working?

(b) What other measures do you think theymight adopt?

Acknowledgements

The considerable assistance and support of MandyClarke, Director of Human Resources at HalcrowGroup Limited, in the preparation of this case isgratefully acknowledged.

Case study questions

Strategic Interventions

Part 2