Virgin Money added the Award for Managing Change, sponsored by XpertHR, to its tally at the Personnel Today Awards on Monday night, having already been made HR Team of the Year.
We profile the winning entry and those of our runners-up in the Award for Managing Change:
Virgin Money
About the organisation
Nick Kemsley, co-director, Centre for HR Excellence, Henley Business School
Vanessa Robinson, head of HR practice development at the CIPD
Stuart Woollard, director of King’s College London and Cornell University’s International HRM Academy
Virgin Money is a UK-based bank and financial services company owned by the Virgin Group, founded by Sir Richard Branson in March 1995. At the beginning of 2012, it acquired Northern Rock in a deal worth up to £1 billion. Its ambition is to make “everyone better off” (EBO).
The challenge
During 2012, Virgin Money rebranded all of its stores. It was also enjoying rapid growth, opening £1.2 million worth of new accounts, helped by the acquisition of Northern Rock. HR needed a change programme to steer staff through this transformation and to create a genuine “EBO” culture and a platform for future growth.
What the organisation did
- Formed a weekly working group consisting of members of the HR team, with steering from senior executives.
- Brought in new senior and executive team structure from day one.
- Harmonised terms and conditions for all staff.
- Introduced flexible benefits and a new, more transparent pay structure, as well as a harmonised pension scheme.
- Twenty-seven new integrated HR policies were introduced, communicated in staff-friendly style.
- Integrated HR and payroll systems.
- Communicated the changes to staff through a series of launch events, brochures, factsheets, town hall meetings and a helpline.
- Union recognition at all sites; change programme gained full support of Unite and Virgin Money’s employee forum.
Benefits and achievements
- Some 99.6% of staff signed up to the new terms and conditions.
- Sixty-eight per cent of staff have chosen to change their core benefits package after the introduction of flexible benefits.
- Ninety-four per cent of staff said launch workshops equipped them with the cultural tools to help build a better kind of bank.
- Reduced mortgage offer turnarounds from 28 days to 20, through moving colleagues from 35 hour-per-week contracts to 37.5 hours.
- In 2011, only 28% of Northern Rock staff recommended it as a place to work; this increased to 73% in 2012.
- Staff turnover reduced from 11% to 7%; absence rates down to 2.7%.
- HR declared “team of the year” by Virgin Money executive team.
Judge’s comments
“Challenging project, good approach and measurement of key outcomes.” – Stuart Woollard
Mereway Kitchens Limited
About the organisation
Mereway Kitchens is a family business manufacturing kitchen furniture. There are two other companies in the Mereway Group: Mereway Bathrooms and Trend Interiors. Altogether, the Mereway companies employ 226 employees and one HR manager.
The challenge
Following a round of redundancies, a restructure was required to manage Mereway’s production process and retain valuable key skills. The company needed to improve processes and train staff in “leaner” manufacturing, while still sustaining morale.
What the organisation did
- Introduced workshops on manufacturing concepts such as 5s and Kaizen.
- Gave all staff the opportunity to participate in an NVQ programme or supervisory/management certificate.
- Set targets for leaner, cleaner production with less waste, and delivered training where employees fell short.
- Encouraged staff to form working groups to offer suggestions, such as space-saving ideas or better tools.
- Conducted time and motion studies, using the information to come up with measurable targets and key performance indicators.
Benefits and achievements
- Ninety-four per cent of employees have achieved a relevant NVQ, and some have achieved further qualifications.
- Staff retention is high at 99%, with staff feeling more secure in their jobs.
- Waste levels have reduced by 25% and production has increased by 10%.
- Morale has improved and staff feel there are more career paths available to them.
Judge’s comments
“The fact that this was carried out by a very small organisation with no history of leading-edge processes and a single HR manager makes it a meaningful submission.” – Nick Kemsley
Thales UK
About the organisation
Thales is a French multinational group of companies that manufactures systems and delivers services to the aerospace, space, transportation, security and defence markets. It employs 65,000 employees across 56 countries and its products include remote weapon systems, radar and radios.
The challenge
Thales UK has a complex legacy structure as a result of a number of historical acquisitions. There had been no integration of terms and conditions of employment, so more than 7,700 staff were employed in more than 20 legal entities, with more than 400 permutations of contractual terms. The company wanted to create a single identity and improve engagement.
What the organisation did
- Developed an initiative called Project Alignment, designed to harmonise terms of employment across the business, increase efficiency and engage the workforce.
- Looked at pay, contracts, custom and practice allowances, collective agreements, handbooks, and pensions and benefits.
- Spent a year planning, analysing and data modelling how the new set of terms and conditions would look.
- Followed a five-stage process to propose terms to staff, consult with affected employees, communicate the changes, issue new contracts and implement the new terms.
- Streamlined the consulting process through its CRM technology and shared-services centre.
- Recruited a core project team with two full-time roles dedicated to managing the process; there was also a Project Board and steering committee.
- Benchmarked terms and conditions against other relevant organisations.
Benefits and achievements
- The single contract means Thales can provide clear, fair and competitive employment terms.
- Increased employee engagement; now more in line with goal of “One Thales” culture.
- Thales has been able to introduce a flexible benefits scheme and new time and attendance system to aid restructuring.
- Increased efficiency and reduced administration costs – over the three-year period, total savings are around £20 million.
- Estimated annual savings of £1 million in resourcing, £200,000 in commission, £1.1 million in tax and more than £1 million in IT and software.
Judge’s comments
“There were big demonstrable savings made as a result of the thorough solution introduced.” – Vanessa Robinson
Direct Line Group
About the organisation
Direct Line Group’s household name insurance brands include Direct Line, Churchill, Privilege, Green Flag, Tracker and NIG. The group is in the middle of separating from RBS Group, a process that is scheduled to complete at the end of 2014.
The challenge
Direct Line Group needed to build a standalone HR infrastructure to replace the centralised operating model it used under in RBS and establish operational independence by June 2012, with a view to floating the business in October 2012.
What the organisation did
- Built a full programme team of more than 100 people to manage the transition.
- Introduced a single employee contract with a single set of terms and conditions, producing 15,000 employee contracts.
- Consulted with employee representative body throughout period of change.
- Designed a new careers website to incorporate new branding.
- Sourced, implemented and integrated new systems for: HCM, payroll, benefits, resourcing, case management, knowledge management and learning management.
- Designed and implemented a new performance-management framework.
- Embedded new brand and values into all communications, as well as reviews, recruitment, performance management and reward.
Benefits and achievements
- Supported business through transformation, including recruiting around 200 new staff and managing 500 outplacement referrals.
- IPO was made possible by the delivery of the new HR infrastructure.
- New contracts accepted by all employees.
- Benefits take-up was 76%, significantly higher than in previous years.
- Changes to performance management have attracted positive feedback.
- All post-separation target service levels – for example, payroll – were met or exceeded in the first three months of operation.
Judge’s comments
“An enormous amount of work was done in a very short space of time – this is a good example of HR getting its head down.” – Nick Kemsley
Wiltshire Council
About the organisation
Wiltshire Council is the unitary authority for most of the county of Wiltshire. Employees cover a range of functions including adult care and housing, services for children and families, and commissioning communications.
The challenge
As part of the coalition Government’s drive to reduce costs in the public sector, Wiltshire Council was required to take a 28% reduction in funding. At the same time, it set out a vision to create stronger and more resilient communities and develop a culture that would deliver its new vision, goals and values.
What the organisation did
- Identified several work streams key to developing the culture, which included: a behaviours framework; leadership development; online appraisals; new policy templates; more HR self-service; and developing coaching/mentoring skills.
- Developed a stakeholder panel of managers across the business, to collect views and consult on the changes.
- Held a series of manager briefings across the country.
- Developed set of e-learning solutions to give managers online support.
- Self-service system, known as HR Direct, provides managers with direct access to policies, procedures and guidance.
Benefits and achievements
- Behaviours framework has been most successful, with 93% of staff saying they now “understand how they are expected to behave”.
- New appraisal tool means managers can access a consistent process for managing performance, plus access to performance data.
- Operational savings and efficiencies achieved within HR.
- Managers have more confidence to take responsibility for people issues and demonstrate better leadership behaviour.
- Staff survey found a 32% improvement in perception of how change was managed, compared with 2011.
Judge’s comments
“The ambition of this change programme was great – involving a new culture and communities despite the underlying need to get cost cuttings. The business benefits are also good.”
Wolseley
About the organisation
Wolseley UK is the UK operating subsidiary of Wolseley plc. It provides construction products and materials through a nationwide branch network, including Plumb Centre, Parts Centre, Pipe Centre, Climate Centre, Drain Centre and William Wilson. The company employs around 6,000 people and has a network of 919 branches.
The challenge
In 2011, Wolseley UK restructured its business to focus on becoming number one or two in its chosen markets. The restructure meant that the company’s staff pool was reduced by 40% and that central functions needed to reduce their costs by 25%. HR took the opportunity to move to an Ulrich-style shared-services model.
What the organisation did
- Commissioned external consultants, Orion, to review the effectiveness of the HR team.
- Decided to redesign team to day-to-day calls handled by a helpdesk, with more complex queries escalated to specialists.
- Consulted with staff over withdrawal of 13 roles, equivalent to 26% of existing HR function, and number of business partners reduced from 10 to five.
- Developed detailed communications and change plans for all stakeholders.
- New model went live with staged transition process: from supervised implementation, bedding in, changing processes to make better use of technology and establishing shared services.
- Provided training in technical skills and “team days” to review the effectiveness of the model and identify improvements.
Benefits and achievements
- New systems and processes implemented earlier than anticipated, in May 2012.
- Service levels improved and shared-services centre improved response times and feedback.
- Overall engagement improved from 59% in 2010 to 84% in 2012.
- Seventy-three per cent of employees said they felt the change had been managed well.
- Ninety-six per cent said there is good morale in their team, compared with 68% in 2010.
- More than £1 million in cost savings has been achieved.
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Judge’s comments
“This entry demonstrated a real cost challenge to be met, and this was done through efficiencies rather than anything innovative. The benefits identified were solid.”
