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Last month came confirmation that the strategy was working: Oscar Faber was the only construction company to make it onto the list of the best 50 places to work in the UK, an annual survey compiled for the Department for Trade and Industry and Learn Direct and published by The Sunday Times. It crept in at number 46 – just behind One2one and ahead of IBM.

The list is compiled from surveys of firms' employees and, according to the list's researchers, Oscar Faber workers are a happy bunch.

"Oscar Faber employees clearly appreciated the professionalism of the company and gave it high marks for a 'relaxed and unpressurised' environment," says Mark Adams, UK project manager for the list's researcher, Great Place to Work .

"Ninety-two per cent told us that the management trust people to do a good job without looking over their shoulders and reported that they listen to their employees. Furthermore, the leadership at Oscar Faber put their words into action – a key ingredient for building a relationship of trust within the work environment." This is music to the ears of Dalton, who has made investment in staff a priority. He joined the firm as a graduate trainee in 1970 but left to work for an air-conditioning company in 1976. In 1990, he returned as main board director, becoming chief executive in 1998.

Since then, he has focused on recruiting the right kind of staff and getting them involved in top-flight projects early in their careers. "If you can work with colleagues, other professionals and clients, there is a very good chance that people will come back to you and that you will create a happy environment in which to work." He adds that office locations – such as the Barbican branch – are chosen because they are near shops and other amenities. The makeover of the reception area is as much about making staff feel good about the place they work in as impressing clients, he says.

The leadership at Oscar Faber put their words into action – a key ingredient for building a relationship of trust in the workplace

Lloyd Bromley, a 28-year-old senior engineer, backs his boss' view. "It's a very relaxed, trusting company with a family atmosphere," he says. "Everyone gets on with everyone socially and as colleagues. There's no them-and-us or white-collar brigade. The directors listen to what everyone has to say and, as a result, there is a lot of input from the bottom up as well as from the top down." Dalton, in turn, points to Bromley's career trajectory as proof that good staff can thrive at the firm. He joined in 1988 at the age of 16, with only a handful of GCSEs. Now 28, he was a Young Consulting Engineer of the Year finalist last year and he has worked on a 30,000 m2 development in Curzon Street, central London.

Oscar Faber, which is celebrating its 80th birthday this year, provides civil and mechanical engineering design across the building spectrum. Its portfolio does include a few high-profile projects, such as the £200m redevelopment of the BBC's Broadcasting House and an £80m mixed-use scheme in Paddington Central, but on the whole, it is best known for its work for Marks & Spencer and J Sainsbury.

As one architect who has worked with the firm says: "Oscar Faber is a fair, workhorse-like company that produces reasonable but uninspired work. It's a little bit too careful and not that forward-thinking." If Oscar Faber doesn't win plaudits for design flair, its commercial performance is certainly outshining many of its contemporaries. From a low in 1995, when it lost £2m and desperately needed to attract and retain good staff, it has undergone a transformation. Last year, it made a £3.5m profit on turnover of £43m – making it the fifth most profitable multidisciplinary outfit in the UK by fee earner – and in the past two years it has expanded its workforce by almost 50%. It now employs nearly 1000 people, including contract staff, across 14 regional offices.

Even so, staff turnover remains a problem: 20% leave every year. "It's higher than we would want," says Dalton, "but the predominant reason is that the marketplace is so buoyant at the moment and our employees are being approached all the time. We believe we have good staff and they are a prime target." Employees could also be lured away by higher salaries – Oscar Faber's 150 graduate trainees start on £15,500-18,000, certainly not above the industry average. But Bromley says those who leave are missing out on something special: "Although profit is important to Oscar Faber, the future of the company is even more so. It is constantly reinvesting in new technology and staff development. Oscar Faber is much more modern and democratic now that all the old-school management has gone and Ken Dalton has come on board." Dalton himself says that over the past five years, he has implemented a three-pronged strategy to keep staff happy: improving communication, better training and career development, and a pick-and-mix benefits package.

Communication
If staff are to encourage repeat business, they need to feel like they are supported by, and belong to, a big team. Oscar Faber's intranet aims to keep employees up-to-date on the latest project news, research findings – even weather reports. Every expert in every field is listed on the site, along with their contact details.

Oscar Faber is much more modern and democratic now that all the old-school management has gone

There are also discussion groups, called Real Change Leaders, that meet on average once every two months. These groups, made up of 12 employees and two directors from different locations, and with differing skills, meet over a weekend at a hotel to discuss a range of issues. Bromley estimates that "95% of the ideas formulated on these weekends are implemented".

Training and career development
Dalton estimates that, on average, each Oscar Faber employee takes the equivalent of five days' training every year. There were 688 internal training courses last year, which offered help on subjects ranging from financial management to writing and presentation techniques.

There is also an in-house learning centre at its office in St Albans that provides journals, booklets and interactive CDs, as well as online learning notes on the internet. Trainee graduates have a mentor and three-monthly progress reviews.

Group human resources manager Antoinnette Fenney says: "Even though it's a very pressurised business, people are co-operative, helpful and interested in training." She also praises the company for the speed with which it follows up training proposals: "In other organisations I have worked at, I could wait up to 10 months for something to happen. Here it can happen almost immediately, especially if it's internal. Ideas are very easy to implement if the company thinks they will add value to the business." Oscar Faber also trains employees through their undergraduate sponsorship scheme, which supports students across a range of disciplines for up to four years at a cost of £2250 a year. It has 22 students on the scheme this year and aims to enlist 50 by 2002 in a bid to attract the 300 new employees which they estimate will be needed from 2004.

Benefits
Oscar Faber offers some benefits to all employees. These include a profit-sharing scheme (each employee last year received a £450 bonus), a save-as-you-earn share participation scheme, free life assurance and free health insurance. "There are currently 79 shareholders and we want to increase this by 320 by 2003. In the future we would like to see 25% employee ownership of the business," said Dalton.

However, it is their FlexAbility Scheme, introduced after a staff survey three years ago, that really caught the attention of the survey researchers. As soon as any employee starts work at Oscar Faber, they are entitled to choose from a list of 10 optional benefits. These include up to £2000 of computer equipment, retail vouchers, additional holiday, childcare expenses and dental insurance. Each employee can spend as much as they choose on the benefits, which can also be sold.