Spotlight on… going public

When former state-owned technology firm Qinetiq went public earlier this month, its debut on the stock market raised £620m. However, it also provoked controversy because the government had sold the company back in 2003 for considerably less.

For any organisation, a flotation on the stock market poses its own challenges. But how do these impact on HR’s role?

Susan Fearon, group HR manager at telecommunications supplier BNS Telecom, experienced some of these challenges first hand when her company joined the stock market last autumn. “The first thing we needed to do was to tighten HR policies and procedures to make sure they were robust. We got a legal adviser to check them and provide feedback,” she says.

It is vital that companies make these checks on policies to ensure there are no hidden nasties – such as outstanding tribunals, pending industrial action or a horrendous hole in the group pension fund.

After all, if any of these things are exposed at the point of flotation, there is a risk the share price will drop.

Richard Smith, employment director at business consultancy Croner, says that from a legal perspective, it is wise to consult with trade unions and employee representatives. “They need to be made aware of what the company is planning and understand that their interests are protected,” he says.

Christian Hasenoehrl, partner at business consultancy Gallup, says that HR’s focus in the run-up to flotation is often on retention, Communication and compliance. “Specifically, the HR department must identify and retain key personnel, and align HR processes to any new organisational values,” he says.

Another issue HR needs to wrestle with is employee benefits. Introducing share options for employees following the float is common practice, and is something that Fearon organised at BNS Telecom.

“As a plc, we wanted to introduce a share-as-you-earn procedure. This had to be sorted out well in advance of the flotation.

“We also needed to look at our pension scheme and make sure it was relevant for the group going forward as we had strategic plans to acquire more businesses following the float. So we decided to embark on a new pension scheme before flotation,” she says.

Employee communication can often be the most challenging issue. Although HR has to keep staff informed, specific financial information is sensitive and has to be kept back prior to the float.

“You can’t shout from the rooftops when you are planning to float because you run the risk of not being admitted onto the stock market,” warns Fearon.

“We just tried to keep staff as informed as we could. When we talked about the company’s plans, we talked about what we would like to do, not what we were definitely doing. We tried to stay away from discussing detailed time frames.”

Preparing to float: HR‘s role



  • Review all policies and procedures to make sure they are compliant

  • Resolve any unfinished business, such as tribunals, before the float

  • Make sure key personnel are retained

  • Prepare new benefits such as employee share options

  • Communicate information about the float regularly to reassure staff, employee representatives and unions


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