Diageo picks Nairobi as HR hub for Africa

A section of EABL’s plant in Ruaraka: Diageo owns 50.03 per cent of the company. Photo/FILE 

By Mugambi MutegiIn Summary

• Diageo, which owns 50.03 per cent of EABL, chose Ruaraka-based African Business Service Centre (ABSC), ahead of competing rivals based in South Africa, Nigeria and Ghana.
• ABSC will provide the brewer with a range of back office services, including administration and computing payrolls, leaving country-specific HR units to oversee recruitment, terms and conditions, pay and benefits.
• ABSC, which will be paying office space rent to EABL, was formed in August last year and its 108 employees have been handling back office financial functions for the brewer.

International brewer Diageo Plc has picked Nairobi as the hub from which it will manage human resource functions for its operations in more than 20 African countries beginning next April.

Diageo, which owns 50.03 per cent of East African Breweries Limited (EABL), chose Ruaraka-based African Business Service Centre (ABSC), ahead of competing rivals based in South Africa, Nigeria and Ghana.

ABSC will provide the brewer with a range of back office services, including administration and computing payrolls, leaving country-specific HR units to oversee recruitment, terms and conditions, pay and benefits.

Africa is Diageo’s largest group of emerging markets in terms of net sales and employs more than 5,300 people or a quarter of its total global workforce.

“Kenya was chosen for many reasons including the fact that EABL already hosts ABSC for various finance processes,” said Charles Ireland, the EABL managing director

“The aim is to have each market concentrate on its core mandate aiming at efficiency improvement and standardisation that reduces the chances of errors because instructions are coming from a centralised place.”

ABSC, which will be paying office space rent to EABL, was formed in August last year and its 108 employees have been handling back office financial functions for the brewer.

The new HR function means the centre must add 26 people to its workforce, 14 of whom will come from EABL having relinquished their duties.

Twelve more will be hired from the Kenyan market and will be backed by a small number of expatriates.

Seven individuals in the new unit will specifically oversee EABL’s regional business.

EABL said its HR employees, who will find themselves without a clear job description after the merger or reallocation of functions, will be redeployed to other areas.

The brewer did not disclose which jobs are up for grabs in the new unit or those that will be left briefly unmanned during the transition. Sources indicated that EABL employees have been invited to apply for some of the jobs that are expected to fall vacant once the office bearers are redeployed.

“Some people will have to change jobs while others will unfortunately be declared redundant,” said Mr Ireland, in a phone interview.

“As far as EABL is concerned, we do not expect to let go of any employees. We will transfer them to alternative roles, depending on the individual and specific market fit.”

Multinational companies have over the years favoured the shared service centres model as one way of streamlining operations in regions where they have a number of subsidiaries.

Not only has this model been used to ease expansion, but also as a way of cutting costs.