At the end of last year, the UK’s largest customer-owned lender announced it was continuing to benefit from the tarnished reputations of scandal-hit banks, picking up hundreds of thousands of disillusioned clients. Nationwide’s number of current accounts rose 20% in the nine months to December 2013, it said, helping to double underlying profits to £539 million.
As consumers switch their allegiances, will potential talent follow? Alison Robb, group director for people, customer, communication and commercial, is cautiously optimistic it could. She’s noticed a shift over the last two to three years.
“People want to work for an employer who attracts positive headlines,” she says. “It really is as simple as that. There’s no doubt our brightest graduates today want a job where they can achieve a work/life balance and contribute to their community. I genuinely think more people are looking for things beyond a pay packet. They have ethics around the kind of company they want to work for.”
Robb joined Nationwide in 1996, having previously worked as an auditor at KPMG and an accountant for the HR function at retailer WHSmith. She recalls it was the culture that first attracted her. That and the chance to be constantly challenged. She’s headed up financial management, led the due diligence on the 2007 acquisition of building society Portman (regular M&A activity means Nationwide is now larger than the UK’s 44 other building societies combined), and worked as divisional director for strategy and planning.
Being put in charge of areas including legal and secretarial in 2011, as well as being promoted to the executive committee, was when Robb got her first taste of “leading areas where I wasn’t an expert”. Then two years ago, she had a conversation with CEO Graham Beale. “I said: ‘I’ve done everything in finance I can do. I want to do something different and I love Nationwide.’” Beale suggested HR, and Robb jumped at the chance.
“For most of my career, I’ve been involved in people initiatives,” she explains. “I’ve mentored, helped with development programmes and championed gender issues as one of the most senior women in the company. I had lots of interest, just not the deep technical expertise.”
Dealing with reward
But at a time when financial institutions are under an immense amount of scrutiny in areas like reward, Robb brings something critical to the table: regulatory experience. “Although the content is different, the approach in building relationships with the regulators and the quality of the data they are looking for is consistent with what I had been doing in finance,” she says.
It’s no surprise Robb cites dealing with reward and remuneration as one of her biggest challenges right now – and part of that is finding the HR talent to deal with it. “In our industry, reward has real technical challenges and enormous regulatory challenges,” she says. “All financial institutions are having to go through remuneration reviews. There is intense competition for the people with that narrow skillset.
“Nationwide is not a bonus-heavy culture, but we have to meet the same rules as all the major banks,” she adds. Then there’s the fact the organisation’s reward strategy is to be market median, which presents another challenge: “How do you attract and retain great people when ultimately you’re only going to pay the median?” The answer, Robb reveals, is in focusing on total reward. It’s about looking beyond the pay packet, investing in developing talent, allowing flexible working, offering ‘citizenship days’ and doing “an awful lot of recognition”. These are some of the reasons Nationwide ranked number 11 in this year’s Best Companies list.
Befitting a mutual, everyone in the organisation has access to incentive schemes, most of which are tied to group objectives around customer satisfaction, business growth and financial performance. Some incentives, particularly frontline ones, have changed in the past year, “not because they weren’t doing the right thing, but because we weren’t sure we could easily evidence everything was working,” says Robb. The rewards on offer were reduced slightly, and in the year since, sales have gone up. “The evidence is if the lead measure is great customer service sales pop out the other end,” she adds.
From finance metrics to HR
Coming from finance, Robb is used to working with the remuneration committee. “If I look at reward and remuneration, hopefully I’ve bought some capability from the finance function,” she says, citing modelling data as an example. “It’s not a bad thing to have someone with finance expertise embedded in HR so you can do more of the work yourself, rather than waiting for finance to do the work for you.”
Working to produce more meaningful data around talent is also on Robb’s agenda, and Nationwide is investing in HR systems and talent analytics. “We are good at the traditional metrics, like how many people we have and our turnover, but I’m trying to understand our talent,” she says. “We know our top 300 really well; I’d like to know our top 3,000. If we have someone with real potential and a secondment opportunity, I want to quickly get to them to talk about it. The basics are there, but the real value-add things are harder to get to.”
She acknowledges that data gathering is more advanced in finance, with an ability to correlate quicker than in HR.
“It’s been really interesting [to see] what data is available,” she says. “I can tell you how many disciplinaries we’ve had, but I couldn’t tell you how many talented people we have. I can tell you everyone in the organisation has had a performance review; what I can’t tell you is the quality of that review. I’d like to be able to do more about the quality of our performance management process. That’s an area we have to think about: how do we get more insight and richness? How do I get real line of sight that there’s consistency across the organisation?”
Recently, HR sat down with union leaders to look at data around flexible working requests. “They said they only ever heard about flexible working requests that were refused and didn’t see the numbers that have been accepted,” Robb explains. “We did a bit of digging and were bowled over by the enormous number accepted. It was an interesting piece [of work] because we’d only ever focused on the negative.”
The problem, she adds, is not talking about flexible working enough. “We have a number of successful job shares at senior level, which we don’t champion enough internally,” she says. The company has carried out research around flexible work, which revealed people working three or four days were more confident than those working shorter hours, because of the “guilt” of walking out at 2.30pm every day.
“We’re doing some work to see how we can demonstrate that whether you work 30 hours in five short days or four full days, it’s all the same,” Robb says. “There’s a feeling flexible working has a ceiling, but I worked part-time for two years [after maternity], it just wasn’t something I talked about. We have to make sure managers are open-minded, and see they can deliver business objectives with a flexible workforce.”
Of course, it’s not just parents who appreciate flexible working. Nationwide has a large proportion of older workers, and the company was one of the first major names to extend and then remove a retirement age. Older employees often end up going part-time, working shorter days or moving to a less taxing role.
Staff tend to stay with Nationwide. Its turnover of 10% is lower than most of its competitors. Turnover for high performers is even lower at 4%. But with the UK economy showing signs of recovery, Robb is aware of the need not to “rest on our laurels” when it comes to talent management, especially when the company is committed to not paying excessive salaries. Success in that regard will mean not only investment, but constantly refreshing the mutual values that have made Nationwide stand out from its competitors.
That’s why it’s significant that the company recently committed to paying the Living Wage to all contractors and temporary staff as well as employees, making it the first high street brand to do so. “We did this because we knew it was the right thing to do” says Robb. Nationwide is proof the simplest maxims are often the best.