Business relocation can be time-consuming, expensive and traumatic. Only forward planning and good communication will make the move bearable.
Most businesses relocate at some stage during their life. Any firm that grows, shrinks, merges or demerges will soon find itself needing a different kind of space to accommodate and suit new needs. If the relocation has been well planned, the only inconvenience that the company's lucky employees will suffer is the chore of having to pack their own books and files into a crate on a Friday afternoon, before unpacking them again at their new desk on the Monday morning.
Sadly, very few company relocations run so smoothly. This is rather worrying, given the number of staff and companies on the move. Over a quarter of a million people in the UK workforce relocate each year and one survey by Black Horse Relocation found that more than 100 top companies claimed to be considering a move within the next five years.
Most companies cited prospects for expansion as their reason for relocation, but there are also other factors at play. Many businesses have had to go through fundamental changes.
Firstly, the re-organisation of business structures (often caused by mergers and acquisitions) has brought a wave of rationalisation, which often involves relocation of those staff fortunate enough to still have a job. A Confederation of British Industry (CBI) survey confirms this view, concluding that business restructuring is now the major reason for relocation. Secondly, changing business practices have forced companies to move to brand new premises. The spread of information technology has meant that hi-tech companies need miles of cabling installed during the building process, to the obvious benefit of those property developers specialising in purpose-built factory sites. For example, when Britannic Assurance moved from one part of Birmingham to a new site in January of this year it was because the original 1960s building that the company inhabited was deemed unsuitable for the technological needs of an insurance company in the late 1990s.
Many companies like Britannic Assurance are choosing to stay put in Birmingham.
The city was the second most favoured for relocation according to Black Horse Relocation Services in its Britain's Best Cities for Business survey 1997 (see table, right). London topped the list for the second successive year, with Manchester coming in third. The cities that businesses would choose to relocate to for purely commercial reasons are not necessarily those favoured by employees. The three most desirable cities for relocation, if business reasons are set to one side, are Oxford, Birmingham and Cambridge with London coming a poor ninth.
Wherever a company relocates, many find the move less than smooth. It's not because the logistics of moving long distances are difficult, because most firms don't move very far these days. According to Mike Biles of Relocation Information Services (RIS), the majority of company moves are to a new home only a few miles from the old one. The CBI survey notes that businesses are now keen to stay close to their original location.
Back in the late '80s and early '90s, long-distance moves, usually away from London, were more common. The availability of grants, office space and a cheap labour force elsewhere in the UK encouraged many firms to leave the capital and make the great trek to far-flung parts of the country.
Today London is still an expensive place in which to do business, but the cost differential relative to other major cities has narrowed and there is less incentive on cost grounds than there used to be to up sticks and start a new life in, say, Newcastle.
Whether a company moves five or 500 miles, it can still mean a tremendous upheaval for its staff. Biles cites the case of Redland, the aggregates company, which moved with the help of RIS from Redhill, Surrey - the company's headquarters for more than 70 years - to nearby Dorking. Redland's employees found the experience disorientating in the extreme. 'We could just as well have moved them to the moon, it would have been no more traumatic,' says Biles. Everything the employees had known was now different. Working conditions and transport arrangements topped the list of complaints but other less obvious factors came into play, including inadequate shopping facilities and restaurants.
Redland's staff may be an unusually fussy lot, but employees face relocations with a very different set of priorities from employers. The latter need to be sensitive to these concerns. The potential benefits of relocation may be obvious to those in the boardroom - moving closer to the market or a chance for more investment in new technology - but a failure to sell the benefits of such a policy to staff can be costly. Employees will automatically be wary of change and fear for their jobs, so timely reassurance is essential.
It is important to communicate plans to employees rather than let them hear (distorted and often incorrect) rumours about the proposed relocation. To let staff know what is being proposed, and why, at all stages of planning helps allay often unfounded concerns.
Relocating a business to a new site requires expert planning and considerable resources. Few organisations have the luxury of spare staff dedicated to planning and implementing every aspect of the company move. The only option for many firms is to buy in expertise. The exact percentage of companies using location or relocation consultants is not clear, estimates range between 20% and 40%; it is now commonplace for companies to outsource at least a portion of their relocation issues in this way.
According to Deloitte Consulting, relocation tends to follow the four-part procedure of working out a strategy, assessing needs, selecting a site and implementing a move. Although many accountancy firms offer the whole package, most are strongest on strategy and local site specialists are often used for project implementation. 'People talk of one-stop-shopping.
This is very effective for marketing purposes, but in reality few clients buy in work in that way,' admits Jay McMahan, a management consultant at Deloitte Consulting.
Relocation can be a major upheaval, consultant or no consultant and good planning and communication is the only way to ensure a successful move. The key objective in any relocation must be minimal disruption to the organisation and its people. Only then will a relocation be hailed as a success by employers, employees and customers alike.
RELOCATION - FOR BUSINESS AND PLEASURE
Top 10 cities for actual relocation
1997 1996 1995
1 London London Birmingham
2 Birmingham Birmingham London
3 Manchester Manchester Manchester
4 Newcastle Newcastle Newcastle
5 Leeds Glasgow Leeds
6 Edinburgh Leeds Belfast
7 Cardiff Cardiff Glasgow
8 Glasgow Edinburgh Edinburgh
9 Milton Keynes Bristol Bristol
10 Bristol Milton Keynes Cardiff
Most desirable locations (given a free choice)
1997 1996 1995
1 Oxford Oxford Oxford
2 Birmingham Edinburgh Bristol
3 Cambridge Bristol Birmingham
4 Manchester Cambridge Cambridge
5 Edinburgh Manchester Edinburgh
6 Bristol Birmingham Manchester
7 Southampton Leeds Southampton
8 Leeds Nottingham Leeds
9 London Plymouth Exeter
10 Exeter Newcastle Nottingham
GOLDEN RULES FOR MOVES There will always be businesses that see relocation as a simple matter of calling in the removal company. Unfortunately, the sheer scale of the task is too often appreciated only once major mistakes have already been made. Here is our list of relocation pitfalls, and how to avoid them.
- Never underestimate the complexity of the project - however small the move or the distance involved. Exhaustive planning is required.
- Build flexibility into the project plan. It's impossible to anticipate nasty surprises, but you can at least give yourself more time to deal with them.
- Involve line managers closely in the implementation of the project.
They tread the line between corporate policy and staff morale.
- The content and delivery of the announcement and the early stages of the move are key. Getting it right at the start will set the tone for the whole project.
- Work to a timetable and stick to it as closely as you can. Missed deadlines and broken promises will undermine the move's credibility in the eyes of staff.
- Plan your resources. Relocation projects require time and are resource-hungry. Don't be tight-fisted.
- Keep a careful eye on key staff during the relocation. Having to replace them during a move will be difficult and time-consuming.
LONDON ELECTRICITY MOVES TO SUNDERLAND
In the late '80s, London Electricity (then the London Electricity Board) found that its business needs were no longer compatible with its London location. According to Martin Bishop, the company's communications director, the company could see that the deregulation of energy markets in the years ahead would open up business opportunities, particularly in the gas sector. However, the costs of a London location stopped the company from taking full advantage. 'It seemed logical to move to an area which could support our needs in a more cost-effective way' says Bishop.
It was clearly unnecessary to have all of its staff in London since most public contact was by telephone or post. By 1995, the company had set up a call centre in Sunderland. This involved the relocation of key staff, explains Bishop's colleague Derek Salter, the company's external affairs spokesman, although many others were made redundant or redeployed elsewhere.
The company chose Sunderland because there was a good pool of quality labour and a greenfield site tailored to the company's needs.
Once the decision to move was taken and the site decided, the actual process of relocation began. Work carried on in London while staff were recruited and trained in Sunderland. For a company with a name such as London Electricity, accents were an important consideration in the relocation.
Would Londoners want to speak to people with accents from outside the capital? Research showing that those with a 'Geordie or north-eastern accent' appeared friendly and helpful allayed these fears.
Salter concedes that there were initial problems following the relocation, including the integration between the existing staff in London and the call-centre staff in Sunderland. Another problem was that the move took place at the same time as the company was changing its computer system.
This put a lot of pressure on the company's ability to continue to function without disrupting services to its customers.
The effects these sorts of extra problems during a relocation can damage staff morale, and Salter admits that it is easy to underestimate what is involved on the human side. In spite of it all, however, he believes the move has been well worthwhile. 'Making the relocation work has taken time. But because of it the business has kept growing.'
BAT ON THE MOVE BACK INTO LONDON
When BAT Industries relocated from Millbank to Staines in 1991, it seemed unlikely that they would ever move back to central London. But in November this year, the company will start moving back to purpose-built offices, known as 'Globe House', on the Embankment. The main reason for the change of heart is the demerger of the firm into two distinct operations - British American Tobacco and its financial arm (which is to be merged with the Zurich insurance group).
The tobacco company's offices are currently spread across several locations, and the demerger has provided the perfect opportunity to consolidate operations into one building. BAT reviewed various options for where the new site should be and the company's board felt that central London costs were no longer prohibitive.
More importantly, it was felt that the capital's reputation as a centre of excellence for the banking, legal and finance professions meant that any extra costs were worth bearing.
According to Tony Hooper, project manager of Globe House and head of facilities, BAT agreed to lease the 200,000 sq.ft development by Hammerson at an early stage of its construction. This initiative, says Hooper, 'enabled the tobacco company to fit out the interior prior to the move to suit the business needs of the new company'.
The building will house the Board and 600 staff. According to Vivian Howard, one of those responsible for co-ordinating the move, everyone has been given the opportunity to move with the company. Most have taken it. BAT staff, she says, are a loyal lot, many having already been with the company for 20 to 25 years.
TWO-WAY FEEDBACK FROM THE MoD
Imagine having to supervise not one relocation but fifteen, and all of them at the same time. The Ministry of Defence (MoD) procurement executive did exactly that in moving 4,000 staff from multiple locations in London and the South into a single modern site in Abbey Wood, Bristol in 1996. The staff were lucky to have a management team which recognised early on that they had to sell the idea internally. 'This included not only staff but their families as well,' says Sue Disbery, deputy director of personnel.
Disbery and her colleagues soon realised they had a complex task on their hands. A communications strategy - created in conjunction with consultants Redhouse Lane - was adopted to keep staff and trade union representatives informed about the progress of the move. The strategy included everything from detailed verbal briefings to articles in the staff newspaper. Two telephone helplines were set up for staff with queries. Reconnaissance visits to the new site were organised, and a video explaining the move was given to staff affected.
One of the most important actions was to give each employee a loose-leaf binder with information on finding somewhere to live, moving home, employment opportunities for partners, education, health, leisure and shopping. Managers saw the benefits of a careful strategy. It's elements helped to reassure them on potential points of concern and prepare them for the move well ahead of time.
On the downside, the MoD had omitted to convince its external audience, notably taxpayers and the media, that the move was worthwhile. Here the communications were mainly reactive rather then proactive.
'One lesson we had to relearn is that communication is a two-way street. It is not enough to provide the information, you need to ensure the other side is listening,' says Disbery.