©The Level Crossing Removal Project
©The Level Crossing Removal Project

Case study: benefit is part of the infrastructure

The engineering contractor actively seeks out competitive social enterprise partners 

Construction company John Holland delivers some of the most significant and complex infrastructure, property development, rail and building projects in Australia, New Zealand and South East Asia. The business, which has been running for 70 years, says it always tries to bring benefits for the communities in which it works, but two years ago realised that social benefit could also be generated through procurement. 

Leigh Hardingham, senior manager for inclusion and diversity, says: “We had already seen community benefit from including Aboriginal businesses in our supply chain and believed engaging with social enterprises would bring similar benefits to other groups in the community.”

The company now incorporates a raft of such suppliers in a variety of ways on multiple projects. One such example was the recent 8km Mernda Rail Extension built on the outskirts of Melbourne. The extension saw the creation of three new stations and such sites create a lot of waste. John Holland selected Outlook Environmental, part of local disability services provider Outlook, to handle the removal, disposal and recycling of the waste wood, hardcore, metal and more generated on the project. 

Outlook supports employment for individuals who find it difficult to get work. It also recycles upwards of 90% of rubbish from the project. 

Greg Rafferty, social procurement and inclusion manager (Rail Infrastructure Alliance) at John Holland, says the key for social enterprises is the ability to be commercially competitive, which means quality and price has to be on a par with others. “Outlook ticked those boxes,” he says.

Outlook’s CEO Sam Sondhi recognises that success in securing new contracts is based on delivering a cost-competitive offering. “This requires us to effectively benchmark ourselves against the market, to ensure we invest in systems and accreditations to align with customers’ needs. 

“We demonstrate through our mission, structure and outcomes, the positive social impact we are able to deliver through our commercial activities.”

Sondhi says the Victorian State Government has played a critical role in levelling the playing field for social enterprises. It launched the Social Procurement Framework in April 2018, which has helped embed contractual targets as part of its portfolio of major infrastructure projects. 

Hardingham adds: “Some of our government clients request that we include social benefit suppliers and measure the amount we spend but we now do this because it’s an important value for our business. We would be purchasing these services anyway, so it’s rewarding to be able to engage a business that passes the benefit on to employees.”

She says there are additional benefits beyond what’s measured: “We believe people want to work for companies that share their values and allow them to bring those values to the workplace.”

The business has a number of social enterprises shortlisted for high value opportunities that will soon be put to market, with Outlook one that has been awarded. On one project alone, says Hardingham, it has contracted more than 30 social enterprises and 15 Aboriginal businesses.

Change the way you buy

John Holland discovered Outlook at a networking event run by Social Traders. 

Mark Daniels, executive director at Social Traders, says social procurement is growing in Australia, with his own organisation having seen its customer base double year-on-year since 2016. State government and the infrastructure and asset maintenance sectors have been among the first industry movers in this field, he says. 

Those who wish to start buying socially should make bold changes, move beyond single champions to run pilots and systemise processes, strengthen leadership, carry out opportunity analysis and measuring, and communicate success, he says. 

“If you do things the way you have always done them you will not deliver social impact through your supply chain. You have to deliberately change the way you buy,” he says.

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