The Royal Bank of Scotland Group (RBS) has about 135,000 staff, which perhaps explains why the HR department at its Edinburgh HQ resembles an aircraft hanger.
Yet this sea of HR is only a fraction of the 2,000 people employed to deal with people matters at the group – and there are almost as many HR awards. Personnel Today’s own and other awards litter one corner of the office, many in recognition of the group’s excellence in human capital management (HCM).
And despite many people’s hesitancy to tackle HCM, it is increasing in importance.
From April 2005, companies will have to include employee information in their Operating Financial Reviews (OFRs) – a key recommendation of the Accounting for People Taskforce – or explain why they have not.
RBS has created an HCM model that ties in a set of HR metrics with business performance indicators. However, it believes that the key to success is ’employee engagement’.
This, according to the bank, translates as: if satisfaction is effectively gauging how much an individual ‘likes things’, and commitment can be summed up in the phrase, ‘how much do I want to be here?’, engagement is characterised by the individual who scores highly on: ‘how much I want to and actually do improve our business results’.
According to Neil Roden, group director of HR at RBS, actually measuring this is easier than you might think.
“In HR, we have huge amounts of data about people – a lot more than you probably think you have. Some of it is very simple stuff, such as what sex they are, what colour they are, and how long they have been with us or where they work or what job they do.
“You’ve got absence data, you’ve got turnover data, you have leaver data, joiner and turn-down data for those who don’t take jobs,” he said.
One key way of garnering statistics is through the employee opinion survey, which Roden said, “should be on page two of being an effective HR function”. The big problem is getting people involved.
The last RBS employee opinion survey had an 84 per cent take up, and if you want your staff to be as diligent, Roden advises you convince staff that you take their responses seriously.
“Employees are always reticent – here, people still think that if they say bad things, then bad things will happen,” he said. “The sad truth is that individual results in this regard don’t matter. What we need to know is what staff think and not what one person thinks.”
To get this message across, RBS communicates and then communicates some more.
“If you speak to the people who carry out the survey, they say the reason why people fill it in is because they think something happens. All the business units have to analyse their results and do focus groups with employees and come up with their action plan.”
The surveys are also carried out by outside contractors for ‘the trust factor’ and are benchmarked against rival companies.
“You could be improving year on year, but if you started at the bottom, relatively, you are still crap. You need that sense of perspective as to how well you are doing,” said Roden.
Combining all these different surveys and repeating them on a yearly basis means that RBS can measure entire employee life-cycles rather than isolated individual opinions.
All data from staff in 28 countries is processed into one single data warehouse, where it can be converted in a consistent format against which the group can benchmark its activities.
By comparing data from the employee surveys with the data on turnover, absence and productivity, RBS can show that productivity is indeed higher where employee engagement is higher. Moreover, it shows that staff turnover falls as engagement is increased.
Using this ‘sausage machine’, the company can then create ‘an engagement impact diagram’. This details the areas that the group has to look after if it wants employees, and hence productivity, to prosper.
This is all very well for a huge and very well-funded organisation such as RBS, but what about smaller organisations?
Roden said it is not necessarily about money.
“Most organisations will have an e-mail and an intranet system, so immediately you have a low-cost way of gathering data,” he said. “Even if you didn’t want to do a full employee opinion survey, you could easily get a sample if you did a simple segmentation around level, geography and broad work code.”
If all this can’t get you started in the often impenetrable world of HCM, then maybe you should start by calling it something else.
“The terminology doesn’t help,” said Roden. “I don’t think anybody is going to jump out of bed and get excited about ‘human capital’.”
For more on measuring human capital go to www.personneltoday.com/24439.article
What does RBS think HCM can do for the organisation?
– Support the aim of the RBS Group’s chief executive to become ‘the most admired bank’
– Measure the links between employee behaviour and business results
– Measure the effectiveness of the RBS Group’s offering to employees
– Enable clear action plans to be created – at group, divisional and local management levels – to improve the effectiveness of RBS’ human capital
Neil Roden’s CV
– March 2000 Group director of HR, RBS Group
– November 1997 Joined the RBS as director of HR
– 1993-1997 General manager, HR, Europe for National Australia Group
– 1988-1993 Various HR roles at Lloyds Bank