The HR Dept to become employee owned

Succession plan will see staff take ownership of the business from November 1

The HR Dept has announced it will transfer ownership to a new employee trust from November 1.

The HR Dept Trust will incorporate all HR Dept Group businesses, which includes its central franchise operation, as well as The HR Dept Bristol and The Health & Safety Dept.

Key to founder Sue Tumelty’s decision was safeguarding the vision and culture of the business, which began as a local supplier of outsourced HR services before starting franchising in 2003.

Today, The HR Dept has more than 100 franchise territories in the UK and Ireland, collectively serving over 6,500 businesses, as well as a franchise operation in Australia.

Representative body the Employee Ownership Association said The HR Dept is now one of just 730 employee owned companies in the UK, many of which are small and medium-sized enterprises. 

It’s believed The HR Dept is one of very few franchise organisations in the UK to be run using this model, which is similar to that used by the John Lewis Partnership.

Sue says: “Over the years I’ve considered many options for a succession plan, but all options which presented themselves have failed to protect the unique culture and values we have in our business. 

“I’m really proud of what we’ve generated and it was vital for me that it continued.

“So this is a brilliant solution. It maintains our USPs and brand identity, it protects the jobs of our employees and gives them an incentive in the future growth of the business.

“It’s also really positive for our licensees across the UK and Ireland, who can rest assured that they will have continuity in the senior team. 

“And I’ll be around as well. I will continue as a director and employee for the next five years.

“Handing the business over to people I trust is really important to me. 

“Over the years I’ve received advice from left, right and centre on how to transition out of direct ownership, but none of it has come from people I think had the best interests of the business at heart.

“So I’m excited that I’ve found a solution which works for everyone and I thank everyone involved in making it happen.”

Keith Sadler, who is currently a non-executive director for the HR Dept Group businesses, will become CEO and chair of the employee ownership trust from November 1.

The HR Dept Trust trustee board will include Sue and Keith, managing director Felicity Kenny, finance director Lian McQuade and directors Helen Thomas and Stacey Mead.

To ensure it operates in the interests of employees, they will be joined by an independent solicitor from legal firm Ashfords. 

Keith will present information on financial performance and goal achievement to elected employee representatives every six months.

He says: “We’ve always felt unique as an organisation and that’s been largely set by Sue in terms of the culture she’s created here. 

“We’ll look forward to continuing her great work, not only in establishing The HR Dept as the leading franchise for outsourced human resources provision for smaller businesses, but by building our health and safety operation too.”

Deb Oxley, CEO of the Employee Ownership Association, says: “Employee ownership is a highly flexible and successful business structure and we congratulate Sue and the leadership of The HR Dept for taking this step.

“Businesses that give employees a stake and a say build trust and shared responsibility, therefore uniting leaders and employees behind a common purpose. 

“This leaves the business in a better position to flex and adapt as the economy looks to recover and renew.”