RAC is the UK’s second largest motoring organisation, providing roadside
assistance, insurance and legal services to 7 million private and business
motorists. Headquartered in Birmingham, RAC has over 4,000 employees
based at four sites throughout the UK. In 2005, the company was acquired by
Aviva plc and attempts were made to integrate it into the organisation.
However, it was soon recognised that RAC was not a core part of the Aviva
business model and in early 2011 Aviva announced its intention to sell RAC
and invited bids. After a competitive process RAC was sold to global asset
manager, The Carlyle Group, for £1 billion.
The sales process was completed over the summer of 2011, with a view to
RAC coming under full Carlyle ownership at the end of September 2011. This
was recognised by both organisations as an extremely challenging timescale
in which to separate the RAC from partial integration with Aviva and to
establish it as a separate, freestanding entity under Carlyle ownership. The
restructuring implications ranged from financial and IT infrastructure, to legal
agreements and HR policies, processes and related conditions.
The senior management team recognised that extra focus and support would
be required to ensure a successful transition within the restrictive deadline,
particularly in terms of HR deliverables. As a result, Independent was
approached to provide high level, in-depth on-site support, adding to its
significant experience of working closely with private equity.
HR challenges and achievements
A senior Independent HR professional was embedded at RAC as interim HR
Director, serving on the executive committee of RAC and reporting to the CEO.
Onsite and fully integrated in the organisation, Independent played a key role
in developing and implementing a separation plan to establish the new
business, which involved:
- creating a separate organisational structure
- selecting a significant number of employees who would be transferring to
the new organisation
- defining all business activities within the new organisation
- establishing and running all employee consultation processes including
TUPE and contracts
- establishing new pension scheme arrangements based on defined
contributions, designed to be attractive to existing employees and new
- developing new incentive arrangements together with plans for pay and
- together with the CEO, conducting a Talent Management review focusing
on High Potentials and key skills gaps, particularly in areas like insurance
where the business is planning to expand
- driving a major recruitment campaign utilising social media and targeting
specialised roles in order to build the skill base of the organisation
- strengthening the commercial functions within the new business
including senior hiring at executive committee level
- conducting consultations with the union, Unite, such that there were no
grievances or disputes incurred throughout the project
The project was successfully completed on budget in an extremely short, 20
week timescale, after which a celebration was held to mark the completion of
sale and recognise RAC’s independence.