Independent businesses working together to support local jobs and investment
E.H. Smith Builders Merchants was 1922, E.H. Smith and is the third largest independent builders merchant in the UK. E.H. Smith is still a family business with the fourth generation now at the helm. The company employs up to 500 people and has 12 trading locations across the West Midlands and the South, as far as Kent. E.H. Smith stocks everything for the modern building, from bricks to solar panels and has successfully expanded its operation over the years to have a turnover of more than 120million.
The company prides itself on its strong employee and community ethos. Ever since they were first established in the 1920s, the company have given regular donations to charity, regarding corporate social responsibility as a way of working rather than a tokenistic PR gesture. They also have a strong commitment to their employees, many of which have been with the company for many years and they endeavour to run their company to be ‘a good place to work’. E.H. Smith argue that whilst being successful is important, ‘its not just about money’.
Working collectively to compete effectively
Whilst E.H. Smith are based in the West Midlands, they are also a national company and keen to bid for the supply of products to large scale construction contracts as part of their business. However, in recent years, they found that many of the main contract work was being won by large multinationals who could demonstrate compliance and manage the complexity of large contracts with organisations in the public sector. Upon winning the work, the multinationals would subcontract the majority of the work to small builders for the lowest price. No consideration was taken of where companies were based, their ethos or any other aspect of their business, it was simply about the lowest common denominator of price.
In order to try and compete with this in the fledgling sustainability market, E.H. Smith teamed up with 30 other independent builders’ merchants and built a framework for deployment of the Government’s Green New Deal Initiative. Together, they established a framework agreement which allowed them to collectively bid for contracts. Whilst, each one of the businesses signed up to the framework have responsibility to ensure that they are compliant in terms of qualifications and industry standards, part of the framework includes a sophisticated piece of software which would help the group manage the complexity of the compliance process including the back office administration and customer journey. This, E.H. Smith realised, was perhaps the most difficult aspect of large contract work for smaller businesses to manage.
Key features of this approach
E.H. Smith demonstrates how the private sector can help to deliver some of the key features of community economic development approach to help support future investment in place but also improve the competitiveness of small businesses.
- Safeguarding private investment in the local community: By providing mechanisms by which independent companies can work together to win contract work, this project helps to safeguard the investment that entrepreneurs and existing companies make towards supporting local jobs and the community;
- Local multipliers – a strong focus upon locally based businesses and local investment maximises the use of existing money within the local and regional economy. One of the advantages of the approach that E.H. Smith have developed is that they can provide really good information and data to the public sector about the number of local jobs and businesses that have been supported through the contract and ensure that depending on where the retrofit is taking place, that the most local contractor secures the work.
- Support for people and social capital – A strong ethos of employee care and support is important because it not only helps to reduce staff turnover which is better for business, but it also helps staff wellbeing, morale and their ability to live a life that they have reason to value.
- Greater commitment to place: Independent businesses are much more likely to have a strong commitment to the place in which they are based. E.H.Smith have long recognised the important role that business can play, not only in supporting a successful business, but in making a commitment to the community. That is why corporate social responsibility is simply a way of working for the company.
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