Becoming even more connected is the ‘silver lining’ for HLM Architects after transitioning to employee ownership

Award-winning architectural practice says employee ownership was ‘right for our next generation’ and the ‘natural next step’ to further ingrain a culture that already existed at the ‘people-centric’ firm.

“Our mantra is ‘everything is connected’. We work as one team without boundaries, sharing ideas and resources to an international client base. We’ve always had great relationships across our studios, and the silver lining of becoming employee-owned is that these connections have strengthened even further,” says Karen Mosley, Managing Director of HLM Architects.

The business, listed in the Sunday Times’ top 100 best companies to work for, which has studios in London, Sheffield, Glasgow, Belfast and Cardiff and a workforce of 200, transitioned to employee ownership in December 2020.

The “people-centric” architectural practice now has 100% of its shareholding held in an employee ownership trust (EOT) in recognition of its employees’ contributions to its success.

Why did HLM opt for employee ownership?

HLM Architects had begun thinking about succession planning around six years before it transitioned to employee ownership.

With shareholding directors of all different ages, it opted to run a succession programme through the HLM Academy – a personal and professional development framework – which resulted in six new directors progressing to the board.

With that in place, the next question was ‘how shall we approach ownership succession?’

HLM had been through an acquisition in the past. The overseas parent company unfortunately went into receivership, and Karen was one of the management buyout team.

She said: “We’ve experienced how a trade sale felt and seen the detrimental effect this had on our brand and values. I’d also been part of the subsequent management buyout team which brings with it personal financial pressures. We started to wonder if either structure ‘was right for our next generation’.

“With our people-centred culture, an EOT route seemed the natural next step, moving towards an inclusive structure would give employees a real sense of ownership, a say in our direction and give us more opportunities to reward everyone for the part they play in our future success.

“We’d done a lot of work over the last few years, holding up a mirror to ourselves, assessing what we stood for, being clear on our values, and we’d developed a really strong sense of purpose across our studios. Introducing a third party could wipe that out overnight.

“It was important to the shareholders that our destiny remained in our collective hands and that our culture was protected and not compromised.

“We originally heard about EOTs through word of mouth – someone had been through the process already – we started to explore it, and it felt like a really great model.”

As HLM had already brought forward new directors to the Board, it saw this as “the next step in empowering others, enriching our thinking and enabling other new leaders to emerge, with careers being developed at all levels”. It gave them “a truly sustainable platform for progression” so that as individuals leave or take a step back, opportunities for others to progress would be created.

How did HLM go about transitioning?

HLM sought help from advisers who knew employee ownership “inside out and could guide us”, and approached Field Fisher, who had transitioned other architectural practices, and Graeme Nuttall, who had written the ‘Nuttall Review on Employee Ownership’ in 2012.

Karen added: “We shared our thoughts with our new directors in February 2020 and everybody agreed it was a ‘great inclusive model’ and ‘perfectly aligned’.

“But then the pandemic happened, and we had to put our plans on the backburner, but as we approached autumn, we could see things beginning to pick up and thought there was actually no better time to press on with the transition.

“With huge support from our employees throughout the pandemic, we wanted everyone to feel we were embarking on our next chapter together, side by side, taking our business forward.”

HLM set up an internal communications plan to keep “sharing and then sharing more” information, launching with a companywide presentation to all staff and an EOT booklet with fact sheets and FAQs to accompany it.

“Because we’ve got a culture that’s inclusive and transparent, we were used to sharing information and asking for views, so people have been feeding back their thoughts as we’ve gone along,” she said.

HLM also appointed two employee representatives who sit on the Trust Board, and also appointed a non-executive trustee director.

The benefits of ‘being connected’

Karen says HLM’s revenue, profitability, productivity and creativity all increased in the year following the transition.

She added: “I can’t pinpoint all our success to becoming an EOT, but it’s certainly a huge contributory factor.

“We’re more connected than ever before, there are more ways for views and voices to be heard and everyone is thinking more about the part they play in the bigger picture.

“We’re viewing our business activities through the widest lens so we’re more inclusive, sustainable and resilient. Our team aren’t just thinking about ‘what am I doing today’, they’re thinking about ‘what are we doing’ and ‘how can I influence or impact where we are heading’.

“Everybody has become much more innovative in their thinking, exploring the ‘why’ behind the things we do, leading to greater outcomes.”

Karen also believes being employee-owned, alongside the accolades HLM has received, is an important factor for their clients.

“We’ve been in the Top 100 Sunday Times best companies to work for now for many years. Clients want to know they’re working with an organisation that cares about its employees and the environment in which they operate,” she added.

“Now we’re employee-owned, clients recognise they’re dealing with individuals who are influencers in their own business, who are empowered to be able to voice opinions and shape decisions and bring that little bit extra. This transition gives our clients more certainty about our longevity.”

Related Articles

Listen to the latest episodes of the EOA Podcast here >>

Robert Oakeshott Lecture 2020 – Naomi Climer CBE – YouTube

‘Our role holding the Employee Ownership Association to account to help it hit its targets and mission’ | EOA Board showcase

Why HLM Architects is ripping up the rule book when it comes to reward strategies and ways of working