With recent research claiming that HR is the unhappiest profession in the UK, it is clear that -running an HR department is a stressful job. But imagine being asked to run 18 HR departments and overseeing a project to transform them into just one.
This was the task facing Hugh Hood when Transport for London (TfL) took control of its 18th business unit – London Underground – in the summer of 2003.
Hood, director of group HR at TfL, said the remit set out by its board of managing directors was clear: “We need to be more than a shell that contains a whole lot of wholly independent operating businesses.”
HR plays a key role since staff tend to regard the department as the voice of the company. It serves 19,000 employees, 60,000 pensioners and 60,000 job applicants every year. Every week 2,000 queries are made to HR.
“We wanted to make staff feel that when they are interacting with the company they are interacting with TfL and not just their own business,” Hood said. “So it really needs to be a good experience.” This meant creating, in Hood’s own words, a project that had a scope which, “by the standards of these things in the private or public sector, was huge”.
But 18 months later he has succeeded and TfL has just one HR department that provides a -single point of access for all its employees’ work queries – a consolidation that will save £10m in its first two years.
How was it achieved?
The key to the whole scheme, which cost £7m, was not to treat it as simply an HR introspective, according to Hood. “It is easy to start the process by saying ‘we need to process re-engineer, automate some stuff and reduce our costs’,” he said. “ But if you do that you get a back-office transaction centre.”
Instead, the focus of the project was on meeting business needs – such as improved workforce information – and meeting the unique operating challenges of the different businesses.
For example, “We found we needed to give better support to line managers and this made us much more focused on designing an end-to-end service,” Hood said. “We asked, ‘What does a line manager do? What do we do? How fast can we expect it and to what standard?’ ”
The first step was to spend the first two months explicitly agreeing what TfL’s managing directors wanted. This became the ‘bedrock’ of the project. “Without that, things could easily have spun out through fear of change, cynicism or whatever,” Hood said. “Because we had that clarity, we were able to push through.”
The main body of the overhaul – melding the 18 HR departments into one – was based on the concept that the whole of HR needed to be a service-focused organisation, supporting both people and the business agenda.
So having decided to consolidate into one function, TfL then decided to subdivide that one into three, following the model used by Royal Mail and others. This divided the function into:
- Group HR, responsible for determining strategy
- Modal HR, which partners the strategy to fit it in with the business requirements
- HR services, which provides front-end advice and support to employees.
One inevitable result of a transformation of this size is job cuts, and TfL was no different, with the HR department shrinking from 560 to 400 staff.
Other public sector organisations that are trying to shed large proportions of their staff include the BBC and large swathes of the civil service, but what marks TfL out is the absence of industrial unrest. Hood puts this down to TfL having a “frank and adult relationship” with the unions – a sensible stance, given the generally fraught nature of industrial relations in public transport.
“We started talking formally with the unions as soon as we knew what the targets were – that was 14 months before we implemented,” he said.
“We explained the targets, why we needed to do it, what the mayor’s agenda was, and our responsibilities to the Audit Commission.
“We gave them the opportunity to go through the rationale, how it worked and so on,” Hood added. “It was not without challenge, but people looked back and said ‘this was done with dignity and you gave me as much information as possible to make decisions’.”
With the debate about HR’s influence on the bottom line -raging, the TfL project proves that if HR asks the right questions of the right people it can make a lasting and pronounced difference to the business it serves.
What is TfL?
Transport for London manages London’s buses, the London Underground, the Docklands Light Railway and London Trams, London River Services, Victoria Coach Station and London’s Transport Museum, a 580km network of main roads and all of London’s 4,600 traffic lights. It also regulates taxis and the private cab hire trade.
Its 18 business units each had its own HR department. They have now been pulled together and are expected to meet tough targets in line with the recommendations of the Gershon public sector efficiency review. TfL has to deal with eight different unions and some political interference from London’s mayor and other politicians.
How to transform HR in 18 months
July-Sept 2003 Blueprint design
Oct 2003 – March 2004 Assessment (gathering quantitative data and understanding processes); generating operating model, organisation design, service propositions and business case
April – Aug 2004 Implementation and change planning; business engagement (testing for operational fit); systems selection; staff assessment
Sept 2004 – Jan 2005 System build and testing; staff training; group communications