Case studies

How Star Pubs made a success of one of the industry's biggest acquisitions

24 Jan 2019 By Robert Jeffery

The pub operations arm of Heineken was part of a complicated three-way merger involving new hires, TUPE transfers and moves within its parent company

It’s not unusual to take on a new role without a clear idea of what it actually entails. For Dan Hardaker, however, the level of mystery involved in becoming head of HR at Star Pubs & Bars was particularly notable. When he entered the business in early 2017, it was to helm the HR aspects of a major new undertaking, which legally he could know nothing of before he signed on the dotted line.

It was, he recalls, “a leap of faith… but I went for it.” And on the first phone call with his project director to discuss what came next, the enormity became clear. Star, the pub operations arm of Heineken, was involved in a complex three-way acquisition of 1,900 venues from Punch Taverns, which would see the business triple in size and head office employees jump from 90 to 230. And because it was subject to regulatory approval, it was unclear when or how it would take place. 

In the end, the deal was confirmed in August 2017, at which point the plans Hardaker and his team had put in place to TUPE transfer staff and begin the integration of the businesses had to be enacted at double quick speed. There were, he says, three aspects to this: a strict legal process that had to be followed, the recruitment of new employees (the workforce would comprise transferred Punch staff, new hires and movers from within Heineken) and a focus on ensuring individuals were able to do their jobs from day one.

This was arguably the toughest part of the transaction. “When you transfer to a new company, often the hardest things are how do I do my expenses or ‘how do I log in to the system?’ You can’t underestimate the things that seem quite small to you that people will really care about,” says Hardaker. “While you are focused on what a contract says, everyone else wants to know the practicalities of it.

“I’m aware people issues are the reason lots of mergers and aquisitions fail and that gave me the determination to say ‘this one isn’t going to fail’. We would do the right thing for people in this process. We knew we had to get the deal done and it would only be done if we had the right people in the right roles, we were paying them and they were happy working for us.”

The geographically disparate workforce – largely comprising business development managers who build relationships with local pubs, most of which are run independently by leaseholders – was brought together to be inducted at the firm’s York headquarters in January 2018, an event that was marred by both a country-wide snowstorm and a crisis in CO2 supply that threatened to see the taps run dry.

“We didn’t plan for either of those things,” says Hardaker. “It just proves anything can happen, and sometimes it’s best not to be too over-optimistic in your planning. Ask yourself, what do we do if the worst happens?”

Despite the setbacks, by providing detailed information and support, and demonstrating the opportunities involved in moving to a larger business, the four-strong HR team was able to oversee both the recruitment of 130 people in six months (98 per cent of them direct hires) and ensure 249 out of 250 people who went through the induction described their inspiration levels as 5 out of 5 afterwards.

The “sheep dip” approach, says Hardaker, meant everyone felt engaged and informed, but the work of supporting and developing capability is far from over. What’s clear, however, is that what could have been a tricky integration went well: turnover is in the single digits, Star Pubs’ engagement results are the strongest in Heineken and the company has just enjoyed its most successful trading year ever.

What happens next is equally important. Change management is an ongoing effort, says Hardaker, and line managers are the guardians of how individual employees respond to shifting conditions. HR has helped them focus on wellbeing conversations, he adds. “Historically, those conversations were quite awkward for managers because they would think ‘if I ask someone how they’re dealing with this and they’re not dealing with it all, what do I say?’ We have needed to get our managers comfortable with having conversations about wellbeing, mental health, change and inclusion.”

This has meant being “formulaic” about the time they should spend with their teams, especially if they are dispersed, and how to structure one-to-ones and career conversations. But it has also helped that the business has shifted its L&D focus to be digital first: “To induct a business development manager they would probably have to spend a week in [previous head office] Edinburgh meeting everyone. It’s not a good use of time and it means they’re getting inconsistent messages. As we’ve scaled up, we’ve had to ask how we take what’s great about how we induct people and make it digital.”

Today, 80 per cent of that process is digital and, as in other areas, it has largely been developed in-house using animations and videos produced from within the team. Just one more string in the bow of an HR role Hardaker says is among the best out there: “It’s hard work, there’s lots of travel and probably more late nights than lots of HR people have. But at the end of the day, we sell enjoyment.”

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