The world of infrastructure, construction and transport is constantly changing. Companies are buying and selling, expanding and consolidating, rebranding or disappearing seemingly on a daily basis.
Just this week US architectural and engineering consultancy firm HDR announced that it is acquiring UK engineering consultancy Hurley Palmer Flatt Group.
MWH Treatment joined Stantec through the MWH acquisition in 2016 and were then sold off by Stantec late last year to a private investment company, with the MWH Treatment brand returning.
SNC-Lavalin bought Atkins back in 2017, and now there are murmurs in the market that Atkins may be sold again in a bid to raise funds for the parent company in Canada.
Deutsche Bahn bought the transport operator Arriva in 2010 to break into the UK market, and then put Arriva up for sale in March this year. With the current state of the UK rail franchising market there are unlikely to be as many suitors this time round.
The constant shifting of the industry’s landscape is one thing for suppliers; keeping up with what name to put on invoices can be a struggle! But from an employee’s point of view, one day you are working for a private company, the next you’re a Plc or part of a huge group, and then a couple of years later you’re back to where you started.
We often have candidates who come to us with a strong preference for which type of company they want to work for. Sometimes we talk to candidates who have spent a long time at a Plc or Ltd and want a change of scenery, others have had a particularly positive (or negative) experience with one and that effects their decision to explore a new opportunity.
What are the main differences from a candidate perspective?
1. Short term vs Long term views
Publicly traded companies have access to significantly more capital than their private counter parts, and this will attract candidates looking for access to the big, prestigious major projects, contracts and ability to quickly expand through acquisitions.
However, with the big financial input often comes short term targets, and many Plc boards will focus more on the immediate share price impact of a decision rather than the long-term implications. Ltd companies tend to have a longer term outlook, focus on profit and cash (rather than revenue), and as a result often have less turnover in their executive teams.
2. Management style
The focus on share price and financial reporting often results in more CEOs and MDs from accounting backgrounds at Plc’s. This creates a distinct culture within organisations which when combined with the frequent structural changes in acquiring and divesting different arms of their business, isn’t for everyone.
Limited companies are usually run by CEOs from an operational background and tend to benefit from more of a family feel, with shareholder’s objectives very closely aligned to the goals of the business.
Private Equity backed Ltd Companies tend to focus on a specific medium term objective to increase company value, so the PE firm can sell for a profit in 4-5 years. Working in the exec team of a PE backed firm can be tough and unforgiving, but highly lucrative; with share options often available for the exec team.
3. Decision making
Large plc’s often come with the drawback of added bureaucracy. This can make decision making a lengthy and drawn out process which can restrict entrepreneurial instincts. Directors within Ltd companies often experience greater autonomy and freedom to take the lead.
Whether deserved or not, having ‘Plc’ at the end of a company name can add standing and prestige. There is a sense of status about a Plc that its private company counterpart just doesn’t quite have – particularly when the added capital means that Plc’s have a significant advantage when competing for major projects. Plc’s can be more corporate and professional in some instances, with well supported central functions.
The sheer size of some Plc firms can make it difficult for many senior managers to feels they are making a real impact on the firm, however well you do.
An Operations Director of a £200m division of a plc with many divisions can’t have the same corporate impact as an Operations Director of a £200m Ltd company.
Being a big fish in a smaller pond is attractive to many. Others like being in a big pond.
From your experiences which type of company do you prefer to work at?