HR at RBS Insurance: building a new HR team

Imagine if you could plan the HR function for your organisation from scratch, with little or no constraints from what has gone before. Mark Martin, HR director at RBS Insurance, has the opportunity to do just that. Jo Faragher reports.

Mark Martin is facing a “once in a lifetime” HR challenge, and he’s looking for passionate HR professionals to help him. HR will play a vital part in a major divestment operation that will see the insurance arm of the banking group – itself valued at around £4 billion – separate from its parent and become a standalone company with a new name and employer brand.

The Royal Bank of Scotland (RBS) Group has to offload its insurance business under European Union state aid rules, after the banking crisis of 2008 led to the UK Government taking a majority shareholding of 84%. The regulations mean that, by 2014, RBS Group can have no investment in RBS Insurance, and the majority of its shares in the division must be offloaded by 2013.

Standalone HR function

RBS Insurance HR director Mark Martin

Mark Martin, HR director, RBS Insurance.

For the 280-strong HR team at RBS Insurance, this means that it must prepare to become a completely standalone function from its parent company by the middle of next year. The RBS Insurance HR director explains the breadth of the challenge: “The RBS HR model is one of the most efficient in the world – very integrated, with significant HR shared services and a lot of expertise delivered by group structure. So it’s a big thing for us to build our own standalone capability and also disentangle processes from the group HR structure.”

The most exciting prospect is that the team will be setting up a standalone HR function as if from scratch – bringing in all-new systems and a new target operating model – coupled with the knowledge that the new company will already be a strong player in the market. RBS Insurance brands include household names such as Churchill, Direct Line, Green Flag and Privilege.

The HR team has been planning the move away from RBS Group since Martin arrived from his role as HR director at T-Mobile in February 2010, where he had overseen a similar project in helping that company’s departure from its parent Deutsche Telekom.

Recruitment drive

To aid the transition, his team is launching a large-scale HR recruitment drive, looking for approximately 100 permanent roles and almost as many temporary roles to support the set up and transition to the future HR operating model. The temporary roles will support the separation from the group structure and help to embed new HR technology systems. The transition will also see functions such as payroll and people services being established in-house and further investment in current in-house functions such as resourcing to drive greater direct recruitment for the business. The resourcing team is building a talent pipeline for the roles, seeing as not all of them will be advertised at once, but rather in phases of expertise.

He hopes that this opportunity to build a world-class HR function will attract HR professionals who relish a challenge and don’t mind getting their hands dirty. “The problem is that a lot of HR functions are built on top of each other over time – different systems, different processes, different fads and fashions,” says Martin. “Because we’re bringing everything together at the same time and we’ve had time to work towards it, the excitement we have here is around that ability to get it all right in one go.”

Detaching the HR function from the group structure will also make it more fit for purpose, argues Martin. “The RBS Group is a very big bank and we’re an insurance company,” he says. “We have a different mix of people – a lot of them in call centres, for example. What we’re able to do now is develop our own HR systems, processes and policies that are right for us in insurance as opposed to what’s right for RBS the bank. Every penny we’re spending delivers added value to the insurance business and does what the insurance business requires.”

Unified employer brand

The divestment will also help create a more unified employer brand. So, while consumers may not see a difference in who provides their car insurance, staff at the various RBS insurance brands will enjoy the benefits of working for a purely insurance-focused company rather than a large, diversified banking group. “There’s a real desire to work for one company – we haven’t had an identity. Now we will have,” says Martin. The economies of scale that the new company will be able to achieve, for example in being able to mine vast amounts of incident data across the various brands, will also help it to operate more efficiently.

But will that efficiency also mean more job losses at the group? Martin does not foresee widespread redundancy in the HR function, but anticipates that many people’s jobs will change. As the company brings in new systems, some activities such as face-to-face inductions may increasingly be done virtually and there will be a more efficient HR self-service offering. However, Martin hopes that this will free up HR staff to focus on activities that add more value, for example by spending more time building relationships with candidates, cementing the new employer brand. Martin will also look to reduce the number of external training contracts and build up those skills internally.

To cope with this level of change, RBS Insurance is looking for a certain type of HR professional – one with drive and a desire to get things done. “We have had people who have left because the things they like doing in HR are difficult here. There are so many moving parts and they like to know with certainty what they’re doing,” says Martin. “We want people who say ‘we have the chance to be better than anyone else’. There shouldn’t be many HR functions by the end of this that will be better than us – so it’s exciting, but there’s a lot of work to do to get there.”

These are not roles for shrinking violets, adds Martin: “It won’t be suitable for everyone. If you want to slip in and sit in the corner, it’s not for you. We’re a culture where we want people to own their jobs. You need to want to be held accountable.”

Value of people

Anyone who comes on board will be doing it with the backing of an executive committee that really believes in the value of people, he says. “HR is really at the heart of this business. We have a CEO [Paul Geddes] and executive committee who really believe in HR. They value the importance of people. It’s not a case of ‘let’s make enough money to train people right’, it’s ‘we can’t win unless we get the people bit right’.” The executive committee works very closely with the RBS employee representative body, for example, to ensure that concerns are aired and dealt with fairly.

Many HR professionals will have dreamt of an opportunity where they could rip everything out and start all over again, but they end up being constrained by existing systems or other organisational priorities.

Martin believes that this could be the opportunity those practitioners are looking for: “We’ve got the opportunity to put in a target operating model where we can get HR right in a way I’ve struggled to, and other HR directors have struggled to before. We’ve got a chance to do it differently and we can do that because we’re doing it from scratch.” 

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