The house of world finance may have been shattered by a demolition ball, but Santander continues to put its faith in bricks and mortar. That ubiquitous red and white brand is in every high street in the land and throughout the crisis, the ferocious acquiring & merging, the unabated moving & shaking, the responsibility for maintaining sound HR at Santander has been down to HR Director, Simon Lloyd.
Simon Lloyd is HR Director of Santander UK. He was interviewed by Jason Spiller at Santander’s HQ in London. Photography by Gary Batchelor.
Simon, give us an idea on your early career and what was it about HR that interested you? It all started with law, I took a fairly traditional route into legal training, as a trainee, with a medium sized practice called Prettys in Ipswich, covering a broad variety of legal work. I then went to London, worked in a couple of businesses doing broadly corporate legal work, really enjoyed it, learnt an awful lot and had banks as clients. Then I went back to Prettys. It was challenging corporate work and I was gaining experience, mainly in medium-sized corporates. I joined Lloyds and got involved in a huge amount of employment work, and this was when I started getting interested in HR, and this was the line I pursued, career wise, for the next ten years at Lloyds. It was a great foundation to my career, gave me a huge portfolio of work, and I ended up running a small team. But I could see there was limited room for career progression, and when a post at Bristol and West came up, I got a job which would really stretch, me with a broader portfolio of responsibility, managing premises and shared services and IT.
I went for an opportunity at Alliance and Leicester, which really put me at the heart of things. One of the big challenges was pulling together all the services and functions, and then about a year before the acquisition by Santander, the HR director moved on, and I was positioned to take over that role, centre stage in managing the takeover. By this stage, I was really committed to moving completely over to HR, I’d had a lot of exposure to HR issues throughout my career, done a lot of HR policy work. But I guess the big piece I hadn’t been involved with was change, operationally and culturally, and coming into Santander there were plans which strongly suggested I’d be making up for lost time. And you asked what is it about HR that interested me? Quite simple, really successful businesses are built on the quality of people you have in your organisation. If you could sum up HR in one sentence, that’s it.
The responsibility of managing change must be the big HR challenge. The first thing you have to appreciate is the huge impact that change has on the business. Nobody likes change, most people can cope when they know what it’s changing to. So the first thing you must do is move quickly, put lots of communication out there, then it’s about working backwards. What are the business needs? What are the key requirements from people? What are motivating factors? How does it all pull together? You can then link that back, bringing those elements together as soon as you can. Then you work on the levers, where you can have an impact on people’s productivity in work. But at the heart of it is, of course, the needs of the business and what the organisation has to do to deliver.
There has been so much change in your time within the financial sector. There must have been a time when it was perceived that anything was possible.. and that can be dangerous. It’s a really interesting question, there is no end of words written about the rise and fall of the financial sector, and I’ve worked for a number of organisations, all of which have been pretty prudent and calculated, and those businesses, such as Alliance and Leicester, did not have the credit problems that crippled others. And Santander has arguably continued to prosper and grow, and a key part of that is the approach to risk. It doesn’t take a genius to work out that lending to people, not looking too closely at their poor financial records, on the basis of ‘what could possible go wrong’? Is a recipe for disaster.
With regards to HR specifically, how do you think the downturn has altered HR’s approach? That actually is one of the things which is harder to do in an organisation which isn’t suffering, generally what HR is doing is putting focus on the investment you’re making. You tighten up all procedures on recruitment, you’re far more focused on the return you get in terms of the investment you make through development. You put an awful lot of focus on retaining people and looking at ways you can minimise your costs. At some stage it will get better and if you’ve lost good people and have to re? hire in a hurry, that is far from ideal. So from my point of view, it’s important to maximise productivity, and that means reviewing your incentive schemes, and getting a clear vision of what the business needs. I’m not a seasoned HR professional, I may come at it from a different perspective, but the basics are, that you have to focus on the business essentials. It’s not about HR theory; it’s about the right people with the right skills. In many ways, tough times make businesses operate better, because it forces a greater focus on the key fundamentals, and cash is tight, and how you spend it is even more critical than it was before.
Give us an idea of the size of Santander in the UK and how is your HR team set up across the organisation? We currently have 240 people in the HR function, broadly set up in a way people would recognise. We have a business partner model where there’s close relationships with the business, and then there are the areas of expertise, around talent and training, policy employee relations, and then what I call operational HR, around the metrics. We also outsource some parts of the operation, and shared services on payroll and certain back office tasks. In the UK we have about 22,000 people and that primarily is the retail banking operation. We are currently in the process of taking over part of the RBS Retail and Commercial Banking Business which will provide big growth in our SME and corporate business. The business part of the team is broadly split.
Santander has and continues to take over long established organisations with very well known brands and identities, how do you manage to achieve this, in such highly charged situations? Communication and clarity are, of course, key. We are very much at the early stages of such a programme actually; we have only just got merger clearance, which is a precursor to having discussions. Typically, we need to get to a stage where it’s ready to integrate on day one, so dividing it down to key work streams is one of the things we are really conscious of. There are thousands of people who will be effected about what will happen, bank survival needs to have satisfied customers, which is probably going to take 12 or 15 months and then the next key work is making sure all systems and operations are what we need to put across, so everything is as seamless as possible. Today is an interesting day as it’s the day we start the formal rebrand of the Alliance and Leicester changes, it will be the brand in the UK going forward, and it’s just not possible to keep it.
Santander acquired Abbey, then Bradford and Bingley, then Alliance and Leicester, historically all these businesses that were direct competitors, but we have successfully brought them together under the Santander brand. One of the key learnings as well has been the ability to distribute knowledge through the combined organisation as swiftly as possible, such as, different ways of working, new procedures, and and the knowledge is moved around, and there’s always somebody in each branch who has an understanding of each sector. Encouragingly, there’s invariably a huge willingness to get the job done. People really do want to see their organisation succeed. The unions haven’t agreed to everything but they recognised what we needed. And fundamentally, from a people point of view, it’s crucial to start the training as soon as you can.
Continuity must be everything, how do you hit the boards running and maintain the correct pace? A lot of it is the training when you introduce a new system for example, it’s usually live, and the most important thing to do is give people hands on experience. We watch and supervise, and it’s done branch by branch, and you need to back it up with experts, people with experience in getting branches up and running, plus the intranet provides a good deal of back up and support, giving people access to processes. Training is primarily hands on, on the job, and general training can be done with e-learning.
How are you able to assess how things are going and how reliable do you find metrics and survey results? I think it is crucial that we know very well how things are going, at all times, and accuracy is important. We look at customer metrics weekly, in terms of the HR metrics we have a number we measure, sickness is something we look at, rising levels of stress. We do two surveys a year, one launched today, and an interim one mid?year, which we use to show a number of issues. This year the results were consistent, but another way is going out and talking to them. Another thing we have done is have a back to the floor day for senior management, where they go to the branch for the day. You pick up so much from the people and the customers there, and it’s an extremely positive thing to do. You get a feel overall what moral is like.
Has the HR agenda changed in the boardroom? Do you think the perception of HR has changed because of the recession? There is a huge focus on the people agenda, we have a regular monthly discussion on HR, these are the issues of what’s happening, services quality etc., and HR’s fully represented, fully participant, and we are expected to be fleet-of-foot. The key piece is about being the business partner and part of the business management team. I think HR is changing. It’s more business friendly; HR is a real part of the business. When you bring two businesses together, it’s no secret, that there’s likely to be redundancies. But our take is that it is the job that goes not the person, and what we’ve done with increasing success is use people with transferable skills in other roles. If you need to reshape a business, move mountains and achieve big things, it’s essential there’s a positive view of HR, and you get huge buy in from people.
The papers are full of gloomy predictions for workplace pensions, what’s your long term prognosis? Pensions are a huge social issue, and I think public sector pensions will be a huge problem over the next few months. Historically in the public sector the pension is there and will always be there. I think the balance has swung for companies, going back to salary schemes, it is not going to happen, and I think the key, going forward, is the message of how important pensions are, with a reasonable level of company help to support that.
It’s such a complex issue for people to understand, the rules keep changing, but for us we’re focused on getting people to enrol when they come to us. We’d rather see as many people in some form of pension arrangement. There’s still a lot of legislation and compulsion coming in but still a lot of vulnerability. This is a massive undertaking and responsibility and it does look very bleak, I don’t think it will be an apocalypse, it’s well understood, about what’s happening, and people are becoming more aware, more engaged and better educated. It’s an area I’ve been focused on for years and it is crucial that there is better education for pensions earlier.
Speaking of what has happened in the financial sector, has this put off graduates applying for roles in financial services? We’ve increased the number of graduates we take, we’re also focused on school leavers. There’s definitely a different generation coming through. I don’t think retail banking has that reputation of being nasty, bad ? we’re not the most loved sector in the UK, and never will be, but I think there’s a general perception that banks perform an important role. The graduates I meet who join us don’t generally have a negative feelings about the sector.
Talking of morals, is there a change in the way that reward is viewed in the financial sector. Do people still join because, first and foremost, they want to make heaps of money? That is stereo-typing. I think more and more, people want a good work/life balance. Within retail banking, the vast majority of people aren’t on big bonus schemes, it’s never been a driving force in the package. People need to earn money to be comfortable, of course, but it’s interesting when I go to talk to people, it’s more about wanting to do a good job, it’s not a about the money. It’s been well documented that some areas of the sector have been reckless, but it is highly regulated now. I think the chief concern is more about the long-term consequences.
Career planning is emerging as a key driver in retention/attraction and longevity? There's been a significant shift in the employer/employee relationship, and that has obvious benefits, but also potential downsides as well. Banks used to be paternalistic, and that has changed. There’s more focus these days on giving people the skills to be mobile, whilst giving clearly defined career paths. It’s not a question about being promoted every few years, there are fewer layers, and they might have to go sideways to develop, but we highlight and signpost this for people. Career development is a partnership between the organisation and the people. Some people don’t want to change or move, because they love what they're doing, others are motivated by career development. To a degree in this type of business, you need structure. We employ a large number of part-time people, and we give people the opportunity to come back after maternity leave, and by and large, it is possible in the financial services to be flexible.
Are you seeing an appetite for more self-service in terms of HR services? I think you will see a growth of self-service. Online, people are quite happy to do that, society has evolved to adopt self-service, people prefer the security of getting a piece of paper, but our people are quite ready for self service.
And what about banking’s battered profile, can it ever be repaired? One of the concerns I have is, I’m not saying banks didn’t get anything wrong, but the economic position is not down to the financial services industry, there has to be a readjustment about that. Some of it is down to confidence, we went from being optimistic about life to thinking the world will end. It’s interesting, talking of business generally, I get the feeling there’s slight optimism, I think if that gets momentum, we will avoid the worst consequences of what people were imagining, and come out of it quicker. It won’t be easy, but I do see some renewed signs of confidence, I think people’s mindsets is to batten down the hatches.
Santander is clearly in a good place, but generally, it seems that businesses are gritting their teeth and hanging in there. I think that's right, you haven’t seen the mass redundancies people were expecting. It will be interesting to see what happens in the public sector, but within the private sector you’ve seen different approaches, and I think that's hugely positive. Hopefully the economy will pick up. People have to pull in the same direction, as a country we need to pull together. If you have constant conflict it won’t work. I find overall, it’s hugely beneficial when you sit down and have sensible discussions, you usually end up with a positive outlook, if we all work towards it, it can be done successfully. Cohesion is also very important.
What have you learnt about yourself, what has surprised you about you? I have got a reasonably high level of resilience, the ability to deal with pressure is one of the things I’ve found. My skills and ideas are very transferrable, and it’s surprising, you never know how much you know. I can now talk about a lot of subjects and I’ve accumulated a lot of knowledge over my career.
What have you learnt about people in general? People aren’t aware of what their true potential is, and it’s something important to me, to push people to maximise their full potential. It is an extraordinary thing, the human being is the most complex pieces of machinery and engineering – putting people in the role of management without skills, it’s like putting someone behind the wheel of a high performance motor car without having taken a driving lesson. People love clarity, and hate not knowing, people would prefer open and honest feedback to discussions, people don’t like hurting other people’s feelings, people in business are very nice and caring, but openness, honesty and constructive feedback are key. Never under capacitate the power of the human being.