Guide to transforming your HR department in 6 steps
1 Ensure it delivers the service the overall business needs, not one that simply addresses immediate HR issues.
2 Start with service not process. Know your customer and ensure that what you provide is what they need and can be integrated into their day-to-day lives and the realities of their culture.
3 Ensure HR acts with one voice. These changes require all parts of HR to work together and support the business through the process. HR professionals in HR business partners and specialist and shared service centre roles need to take responsibility for the programme being a success.
4 Don’t be a slave to technology. The right technology will make lives easier and your organisation more effective and profitable, but over-buying technology can become more than just a long-term financial headache.
5 Manage the change. Your business is about to change in many ways and all of them should be for the better. This will only happen if you spend time, effort and money to ensure that everyone from the very top of the organisation down understands and buys into this change.
6 Look to the future. The implementation programme is only the first part of the journey: good project management discipline will be even more critical in ensuring you continue to deliver on the promise of improved business performance.
Source: Simon Constance, director, Orion Partners
HSBC is one of the world’s largest banking and financial services organisations, with more than 10,000 offices in 83 countries. As well as its core retail bank, the company also operates a number of subsidiary businesses, including specialist insurance operations.
After a review of operations, HSBC decided in September 2006 to incorporate UK-based HSBC Insurance Broker Holdings and its two associated companies (insurance brokers HSBC Actuaries and Consultants and HSBC Insurance UK) into HSBC Europe. The aim was to make its processes more efficient and increase insurance’s contribution to the bottom line of the bank from 10% to 20%. This process would start with the integration of the HR function from the three subsidiary companies into that of HSBC Europe.
The integration threw up three main challenges, in the form of processes, people and culture. All three companies had different and inconsistent policies, benefits schemes and procedures, which differed again from those of HSBC Europe, while 16 permanent staff would have to be either offered alternative positions or made redundant. At the same time, the integration would mean a cultural change by switching to HSBC Europe’s HR servicing setup, where responsibility for day-to-day HR tasks lay with line managers and additional support was provided by the company’s shared service centre, HR Connect. All this was to be done in a six-month timeframe, between January and June 2007.
Richard Blay, then head of operations and resourcing at HSBC Insurance Brokers and now senior manager, HR programmes, at HSBC Europe, quickly realised the programme would be too much for him to take on alone.
“It was quite a diverse and complicated exercise because of the different businesses involved and the range of stakeholders, but also because of the volume of change that had to take place and the impact that would have on the business in that time,” he recalls.
HSBC appointed HR transformation consultancy Orion Partners to design and implement a programme that would ultimately lead to integrating the various HR functions.
The initial step was to hold a transition planning workshop that included all the senior project stakeholders and established the key differences between the current and the future structure, and how that would affect the insurance businesses during the transition period.
Orion Partners also held a series of 30 workshops for 253 line managers at HSBC Insurance Broker Holdings who would be affected by additional HR responsibilities, set up regular newsletters and published an HR Connect overview brochure.
The integration itself was split into seven streams: payroll and finance the HR desktop software application recruitment learning and development administration policy and processes communications and people transition. Each stream had a leader who was accountable for implementation and reporting on progress. In addition, a number of subsidiary projects were undertaken, including implementing online systems for recruitment, self-service and learning and development administration, and a grading system for benefits, which had to be in place before manuals could be finalised.
As a result of the transition, the HR teams of the previous three subsidiary businesses were dissolved and 12 of the 16 staff found new positions either within HSBC Europe or in other parts of the insurance companies. The project was completed to budget and on time.
Blay believes the HR transformation itself worked as well as could be expected, but he admits the project was undertaken primarily for the benefit of the wider business rather than the HR function.
“It worked in the sense that it delivered what it was asked to deliver and it was as painless for the business as it was ever likely to be,” he says. “But would I have chosen to do it had it not been imposed? The answer is probably no,” he adds.
Blay estimates the whole project will save about £800,000 in salaries and related servicing costs. However, he admits that the overall cost benefit to HSBC Europe is likely to be less than half that once additional burdens on the main business have been taken into consideration.
The original plan was to extend the integration to other units but this has yet to fully take place.
Having given up a permanent job to join HSBC Insurance Brokers as senior employee adviser in October 2006, Christina Thorpe was understandably concerned when she heard about the planned changes.
She was initially offered a similar role at HR Connect – the shared services centre where the bank’s employee resources operation was based – with the position split between London and Hemel Hempstead.
But during the consultation period she was also made aware of a vacancy as senior employee resources manager at HSBC’s Canary Wharf location, for which she successfully applied. “It was a promotion for me and was quite different to my original role,” she says. “I develop policies, get involved with various projects and have a wider remit, including employee work-life balance initiatives and contact with unions.”
Overall, she feels the integration process was handled well from an HR perspective and believes her new role with HSBC Europe offers a much better opportunity for career progression.
If I could do it again…
HSBC Insurance Broker Holdings was aware that putting more of the day-to-day HR responsibility on to line managers would meet with opposition, so Blay would have liked to employ dedicated HR resources in individual business units. This was rejected, however, and the business has had to hire ‘super users’ to perform HR roles, which has further eaten into the cost benefits of integration.
“There were issues with insurance being a bit different to the bank, with management expectations being higher and needing more support than HR Connect was really cut out to provide,” says Blay. “And [line managers] got frustrated with some aspects of the service that they were getting. Ultimately, the business has done what it set out to do at the start.”