It is first thing on Tuesday morning after the hot 25 May bank holiday. Across countless offices, most employees will have been gently easing themselves into the rest of the short week. Not Mark Adams. Abbey's HR director has already been up since the crack of dawn, locked in talks with the banking group's union, Advance. But as he beams a cheery 'hello', apologises for being late and offers a business card with an unexpected "there's another one got rid of", it is not until later that the significance of both these events becomes clear.
Had I known then what Abbey would tell the world 24 hours later - that Abbey is to scrap its name and rebrand as Santander, its Spanish banking owner, the significance of Adams wanting to offload his business card, branded 'Abbey' in big letters, would have made sense straight away. But I do not have long to wait. Adams is itching to tell me this news - a day earlier than officially allowed, but never mind: "Tomorrow we are going to be known as Santander in the UK," he reveals. "If you take a step back and look at the broader picture, you realise it's completely the logical thing to do."
Adams is not wrong. The rebrand, which has been favourably received by a sceptical media that still remember the disastrous Royal Mail/Consignia fiasco, caps a remarkably successful 12 months for the UK's second-largest mortgage lender. While other banks have been brought sobbing to their knees by the credit crunch (HBOS recently posted a 72% fall in profits), in April Abbey revealed a 25% increase in profits. Part of this came from its £1.26 billion July 2008 takeover of Alliance & Leicester (which added 250 branches to its existing network of 959); while towards the end of last year, it also bailed out crippled Bradford & Bingley, (B&B) when it bought its savings business and branch network - which added yet another 350 locations.
In less than a year, Abbey (now Santander) has met a growth plan of reaching 1,300 branches that was first mooted in 2007, and which was predicted to take until 2012 to achieve. Expansion thus completed, Adams says it was only a matter of time before the Santander rebrand, which extends to the Alliance & Leicester (A&L) and Bradford & Bingley branches, was going to happen.
"The intention was always that Abbey - when it was just that - would become Santander," says Adams of his parent company, which bought Abbey in 2004. "But once we bought A&L (Abbey had already tried to buy it once in 2002, but it was turned down by the Government for being anti-competitive) and B&B, there was no point first absorbing these two into Abbey and then into Santander later. We thought we might as well miss out the middle step and integrate everyone into Santander, and do it all at once."
The plan is that B&B will rebrand first, with A&L following in 2010. This is mainly because A&L is still a separate bank in its own right, with its own separate banking licence. B&B, on the other hand, was bought in conjunction with the Government after it was part-nationalised, and Abbey/Santander owns the whole savings business. So what is the HR challenge that lies ahead?
Adams' strategy could arguably come straight from the motto of the Royal Green Jackets - of which he was once an infantry platoon commander: 'Celer et Audax' - meaning 'swift and bold'. He has certainly been this way with the employee groups: "The unions were initially worried about job losses and 1,900 jobs have indeed gone," he says. "But these have virtually all been back office roles," he adds. "For now, for the majority of our 23,000 staff, this is a change above the shop door only, and what we've been very clear about is that we do not want to cut branches; we only want to cut duplication. Other banks have been cutting down on face-to-face contact; but our branch network is incredibly important to us."
According to Adams, the Santander 'way' is to have a 10% share of footfall in all its regions. Abbey on its own had less than this in many of the areas in which it operated, but, with the B&B and A&L acquisitions, this target has largely been achieved. It is one of the ways in which Abbey - when it was just that - was already converting to the Santander method of doing things. Not all of it has been easy. In the UK, for instance, the workforce is split 65/35 female/male. In Spain it is the opposite. In the UK, there are legislative and regulatory differences, which mean product and service initiatives from the group cannot immediately be transplanted into Abbey. But what Adams is keen to stress is that this gradual absorption into Santander will continue with its A&L and B&B branches.
"The masterplan," he says, "is that at the end of the process, customers will be able to go into any Santander/A&L/B&B branch and get the same Santander treatment, and access the same products. That will mean a massive programme of retraining on products (training has already been boosted 10%), but also on integrating very different service standards."
The latter point is particularly salient. Adams confesses Abbey has had a somewhat chequered few years in this area. In September 2008 Abbey came bottom of the J D Power & Associates UK Retail Banking Customer Satisfaction Survey for the second year running with a score of just 611 out of 1,000. (The Co-operative Bank came top with 746 points). Adams freely admits A&L's service, which came a much better fourth in the same survey, is "something Santander can learn from".
Adams says rising customer complaints can be attributed to teething problems of its new Partenon IT system - one of the first efficiency improvements Santander wanted to make in 2004. The system, aimed at creating a single customer view and reducing the number of individual customer records stored from 52 million to 20 million, was still only 70% complete by the start of 2008. "We're now relentlessly pursuing service," says Adams. "The IT system will now have to spread to our newly added branches, but what we're saying to staff is that they need to trust us. When everything falls into line, it'll be a better place for products and services and a therefore a better place to work."
Perhaps unsurprisingly engagement levels during these changing times have not been good. Staff satisfaction is currently 62%. Adams is aiming to reach 65% this year, and new 'temperature checks' are to be taken to see if this will be met. But he is undeterred from pursuing his aims. To make service a concept that sticks, 25% of bonus pools paid to staff will now be directly linked to its service scores, and the bank now has a director of service quality, he says.
"I'm sure staff will go through our journey at different speeds," Adams admits. "Abbey employees first started becoming Santander staff some years ago. I think the process for B&B staff will be easier because we can learn from how we've been doing so far."
Adams says he is most pleased by the constructive relationship he has with the unions - Advantage, the in-house union for Abbey staff, together with UBAO, the B&B union, and A&L's two unions, DCS and CWU. In fact B&B's union has just merged with Advantage and recently gave Adams an 83% approval rating of the changes being made. "The unions have actually been a great communication channel through which we can speak to staff," he says.
But as much as the pace of acquisitions and rebranding affects employees, Adams' HR staff have not been immune to change either. When Santander took on B&B's savings arm, it did not take its HR team, so Abbey's existing pool of 200 HR staff must now take on this extra HR workload. At the same time, since 2004 HR headcount has actually fallen from 600, with core functions, such as recruitment, outsourced (in this case to Hays). "It's been a tough year, but I'm really proud with how the HR team has integrated itself," says Adams. "The professional directly responsible for integrating the terms and conditions of Abbey and A&L is ex-A&L and is doing a great job. It's a fantastic team spirit."
Although the rebrand has only just happened, Adams says he and his HR colleagues are already seeing the fruits of the Santander effect on Abbey - an effect he can only see continuing at A&L and B&B. "We have an internal communications programme called 'Santander Is You', showing you what you need for career development and what you need to be successful. Last month it was supported by a week-long diary of events. Things like this have really made a difference. I've seen a real, perceptible change in our brand that wasn't there when we were first bought by Santander. Recently there has been an anti-bank backlash, but we're not seeing this. We're seeing excellent candidates coming forward. The fine-tuning of our employee proposition has worked; it's a place that graduates want to join."
As a sign of this confidence, for the first time Adams says he now wants to enter The Sunday Times 100 Best Companies To Work For league and publicly showcase Santander as an employer of choice. "A lot about staff engagement is not what you provide but how well you tell people what you provide" - this is despite it recently introducing a new share scheme, and a new system for managing overseas opportunities. "Giving staff access to information," he adds, "is an important part of our agenda. It really is about saying we've got a good story to tell."
CV
Born: Bridge of Allan, Scotland; educated Daniel Stewart's Melville College, Edinburgh and Royal Military Academy Sandhurst
1989: Various HR roles, Xerox Europe
1996: General manager, international compensation and benefits, Richmont AG
1999: Compensation and benefits director, Philip Morris (Kraft Foods division)
2000: Global reward director, Nokia
2003: HR director, BT Wholesale
2006-present: HR director, Abbey (now Santander)
Outside interests: Golf and fishing.
