Business Essentials: Olympic long jump: run out of the East End to make way for the Games

With relocation forced upon it, can a small steel firm hang on to its local network, its customers and its staff?

While the success of London's bid for the 2012 Olympics has been celebrated as good news for the British economy, FH Brundle is one company that looks set to suffer as a result of the successful bid to win the Games.

Based in Bow in the East End, on the site where the Olympic Park is to be built, the established family business must make way for the development and is faced with the challenge of minimising both the disruption and the costs.

"The company is 116 years old and no stranger to relocating," says Mike Brundle, a partner in FH Brundle, a wholesale supplier of wrought iron, mesh and other steel products. "We were originally based in the Barbican area [in central London] but were bombed out in the Second World War and moved east to Hackney. Then, eight years ago, we moved to our present site.

"The difference this time is that it's not our choice. The Government has given us until July 2007 to relocate and it's the first time we've faced compulsory purchase. We would like advice on what we can claim for and how to plan for it to the best of our ability."

Although the Government claims to be giving businesses like FH Brundle a lot of help, Mr Brundle believes it has "a very black and white view". "It seems to think you can just pick up a business and move it, no trouble."

The reality is, he explains, that the 350 local companies told to relocate have formed a network over the years and rely heavily on each other. "For example, there's a garage very close to us that maintains all our vehicles. It is questionable if we will be able to work with it when we move because of the geography."

He also points out that around 15 per cent of his business comes from customers themselves approaching FH Brundle. "If someone in the City needs a bit of steel, there is nobody else close by to get it from apart from us. The Government is forgetting we'll lose that kind of business."

The three different relocation sites identified by the Government as options for the company proved impractical, so Mr Brundle decided to find his own. "The first one was no good because it was earmarked for high-technology businesses. The second one stank because it was by a sewage works, and the third one was out on the marshes in Essex and was too isolated."

"So we've been searching frantically for a freehold and I exchanged contracts last week with a firm in Rainham [Essex], which is not a location of our choice."

His biggest concern is that he expects to lose a quarter of his workforce as a result of moving 15 miles away. "At the moment, staff come into Stratford, which is on the Tube and has overground train links. But the public transport connections aren't much good where we're going."

The Government will subsidise the redundancy packages, but FH Brundle enjoys a low staff turnover at the moment and doesn't want to take a step backwards. "We've found some really good workers round here. The diversity of people in this area is particularly rich. I want to know how to ensure we can get the recruitment process right, and how we can keep training costs to a minimum."

www.brundle.com

WHAT THE EXPERTS SAY

Stuart Mitchell, Senior Partner at the Business Moves Advisory Centre

"Because Mr Brundle has acquired alternative premises in Rainham and fears losing a quarter of his employees in the move, his primary concerns must be retention, relocation and recruitment.

"First, we recommend providing information about schools and housing in the new area to existing employees, and encouraging them to relocate. Mr Brundle should also look into possible government financial support for staff relocation costs, as well as for, or in lieu of, redundancy.

"One-to-one discussions with existing staff will give a better idea of those who will, won't or might relocate and help him plan an effective retention and recruitment package. He should also contact the Business Link office covering Rainham, which might help fund training and recruitment costs for his new staff.

"If public transport to Rainham from Bow is problematic, encouraging car sharing could well reduce staff losses and be good for morale."

Rebecca Clake, Organisation and Resourcing Adviser, The Chartered Institute for Personnel and Development

"There are simple things you can do to help staff relocate, and these include looking into possible travel options and providing opportunities for them to visit the new premises. It is important to engage with employees in order to address their concerns and shorten the time it takes them to become productive in the new location.

"Use a range of methods to advertise your job vacancies, as this will help you reach a wider and more diverse pool of people. Invest time in the job ad; while it must relate to the existing post, it should be written in a way that appeals to all people, using positive visual images and wording.

"Be creative and think about other ways of attracting applicants. It might be worth building links with local colleges, working with the job centre and holding open days.

"For a free factsheet on recruitment and relocation, visit www.cipd.co.uk."

Stewart Masterton, Business Adviser, Business Link for London

"On a positive note, a forced move can present an opportunity to look again at the business - what it does and how it does it.

"Reviewing the core activities and the processes used to deliver the finished product can help to identify ways of improving productivity and reducing operating costs in the new location.

"Whatever the outcome of the review, the company should create a detailed move plan to manage the process, involving both staff and suppliers.

"This will help ensure that FH Brundle arrives in Rainham ready to hit the ground running.

"The Manufacturing Advisory Service, run by Business Link for London and EEF South and supported by the London Development Agency, can provide networking opportunities as well as support and advice specific to the company's business.

"FH Brundle is moving to a vibrant growth area, and Business Link for London and the East London Small Business Centre can help fund training for new staff."