It's almost becoming embarrassing. For six consecutive years now, consultancy PricewaterhouseCoopers (PwC) has been in a league of its own as The Times number one ranked UK graduate employer. For six years PwC has also been featured in Fortune magazine's 100 Best Companies list. And, just weeks ago - when the Sunday Times published its Best Companies 2010 list - few will have been surprised to learn the consultancy was ranked the UK's fourth best mid-to-large sized employer (up from seventh in 2009.) It has risen up the list every year since 2006.
In fact against almost every HR measure PwC is the exemplar of practising what it preaches. In the US, for example, 48% of its employees are women and 27% come from minority backgrounds. Working Mothers cites it as one of the UK's top 10 employers for mums. In the UK many HRDs will also be aware of PwC's contribution to HR research. Its annual Executive Compensation Review has become a must-read - as has its annual CEO Survey, the results of which were published last month, with challenging ideas about the post-recession role of HR.
But perhaps because of these accolades, and because it has such a seemingly unrivalled reputation for demonstrating the best in HR, it comes as a shock to learn that, until 2008, PwC UK did not even have an HR director that reported to the board, and nor was the HR structure it had organised itself around considered to be that good.
These are not my words, but those of Sally Mitton, PwC's first HR 'leader' (its house name for director), the woman brought in to revitalise the company's internal HR system - a set-up that was not considered to be firing on all cylinders. "We had lots of good HR people, all doing their best to support their part of the business (be it tax, law etc), but it would have been very difficult to say exactly who was involved in doing HR activities in PwC," she says honestly. "We needed to be more effective operationally so we could release people to be more strategic."
This is a problem all businesses could say they struggle with. The fact it is PwC that is struggling with it sounds absurd but, like many HR re-evaluations, the genesis came with the appointment of a new board (in July 2008), a requirement for a new 'one way' vision, and for HR to take a lead in pushing this through. "The CEO's vision was very much a people agenda one - that we needed to give our clients a single, holistic service," says Mitton, who first joined PwC in 1990 as an HR consultant. "Behind this, the HR departments needed to be more aligned to the strategy of the business than it was. We needed to be one function. We needed everyone in the organisation to be able to see where their 'bit of HR' fitted into the business."
For those still struggling to imagine one of the world's top HR consultancies admitting it was behind the curve with its internal HR, her confession gets even more frank. "We'd introduced business partnering into the business in 2001-2002 but, to be honest, it hadn't been well embedded. We hadn't been able to get HR to change behaviours and be a true business partner. Meanwhile, the transactional side was being asked to perform tasks that were too complicated. We'd fallen into a gap being neither excellent at the transactional level nor the strategic."
Mitton, who is disarmingly honest ("there's no firm that's so good it can't do with an overhaul," she jokes), is unapologetic in describing her appointment as leading an 'HR transformation' project. "Don't jinx it," she says playfully at the suggestion that as soon as anyone calls something a 'transformation', it is doomed to failure. "I don't think the word transformation underplays what we are trying to do," she says matter-of-factly about the renovation PwC is going through, and the fact its VP of talent is on near permanent roadshows explaining to staff the transformation process. Mitton says: "I'm doing the HR part, but the one-firm view of the world is happening in finance, marketing, everywhere." Regularly, she uses the phrase "better quality HR at either the same, or an improved, price". This is proper bottom-line stuff.
The reality of doing this has been to create a top 100 list of its own - this time of the top 100 HR processes that are in greatest need of being re-engineered. They have been prioritised in terms of the ones that will produce the greatest cost savings, efficiencies and improved service. Top of the 100 are re-writing/delivering salary review processes, performance management metrics and sorting out bonus structures. "Pay is a good example of the one-firm view; we want to link reward more to the performance of the whole firm," says Mitton. "Some of these bigger reviews will be formally embedded by July."
What this project has not been about is selling the HR silverware. There has been some headcount loss in HR, but it has been negligible and it still hovers at the 400 people mark. So far 800 hours of HR time has been spent re-mapping 23 HR processes and 500 hours of training has been given to 80 HR support staff. "HR has been budgeted on what is a reasonable cost, rather than what makes us the leanest and meanest HR department out there," she says. "PwC just has people. That's our product. We don't make anything, we sell our people's expertise. We should probably be investing more in the HR function."
Not wanting to miss an opportunity, PwC actually approached some of its own employees - its client-facing consultants - and, with a bit of crafty accounting, moved budgets internally to get them involved in the transformation project. "They've treated us just like any client," says Mitton. "It's been extremely interesting for them, while we've been able to hear, in a very no-nonsense way, what they think needs changing with the HR function." She adds: "It's helped create a real sense of shared ownership."
Although the project technically started in 2008, it will not be completed until 2011. "It's a long haul," she says. "We've actually reached the hardest point of the project, because we're at the bedding-in phase - getting the new HR policies we're developing out and into the business. We know we can't change a business culture overnight, and we feel we probably need to do some more communication around re-energising HR staff and the rest of the PwC family about the business transformation. I know the people working on our top 100 list are very tired, but maybe we need to add a bit more complexity to achieve getting more simplicity in the long-run."
At this point, she pauses. "Does this make sense?" she asks. She clearly wants it to work (she reported her progress to the main board last month). "One of the biggest opportunities this has given me is to enable me to ask our senior HR people what they want to do in this company. They've relished the chance." And according to PwC's 'You Matter' survey, the judgment of the change process from the HR population has been incredibly positive. This obviously matters greatly to Mitton. "I feel hugely encouraged by this, hugely comforted," she says.
"We've already managed to achieve the cost savings that the board has set for us," she adds. "We're now a genuine case study for our own consultants who do external transformation projects. I can't say this is something we deliberately tried to do, but it's a great, unplanned bonus."
Another unexpected benefit is that members of her own HR team have got a taste for other parts of the business, and now want to be seconded to its client-facing HR services group - something the HR leader is more than happy to accommodate. "This is classic people development stuff. I'm thrilled this can be done as a result of the programme." No doubt such developmental opportunities will be another piece of good HR practice that helps PwC win yet more HR awards - this time with an HR department that Mitton is actually happy about. "It's easy to say HR has to have a strategic line to the business, but it's far harder to do in practice," she concludes. "We've thought much more deeply about it this time, and I think we're nearly there. But it's not easy, it's really not easy ..."
CV
1990: Joined Pricewaterhouse Coopers as an HR consultant and set up the resource management function for Consulting
1999: Became a director, with responsibility for learning and development and for recruitment in Management Consulting Services (MCS). Following the sale of MCS to IBM, she took a break for two years to be with her family
2004: Returned to PwC as HC director for tax.
2008: Appointed HR leader, PwC.