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Organisation: Prudential UK and Europe
Sector: Financial services
Track Record:• Prudential UK and Europe provides life insurance and pensions to about seven million customers• With locations in London, Reading, Scotland, Dublin and Mumbai, Pru UK employs about 3,000 staff• UK third-quarter results showed new business profit up 1 per cent year on year and sales up 4 per cent to £569m• According to its 2011 engagement survey, “on average one person a day is becoming more positive about Prudential”
For more than 160 years, Prudence, one of the four cardinal virtues, has been a figurehead and logo for one of the UK’s best-known brands. It’s a value that Prudential UK and Europe still believes in today – the company’s commercial strategy is about “value, not volume” according to its HR director, Cathy Lewis. “We pride ourselves on our positioning in the market to provide customers with the greatest level of security and returns on their investments,” she says. Operating on a federal model, with its own CEO, Prudential UK and Europe (Pru UK) is now part of Prudential plc, which is also domiciled in the UK, but has companies in the US and Asia. Prudential plc’s history, like that of many large organisations in the financial services sector, has been characterised by a number of mergers and acquisitions, including a high-profile bid in 2010 for AIA, the Asian business of US insurer AIG. The bid, which would have resulted in a significant organisational shift in focus towards Asia, was subsequently dropped, at a cost of hundreds of millions of pounds. This generated plenty of negative coverage in the business media, but for UK-based employees it was still “business as usual”, the company says. Indeed, profits were up in 2010, with new business in the UK increasing by 14 per cent by the third quarter.That said, Pru UK has been operating in a very turbulent marketplace more generally, characterised by uncertainty around people’s future financial stability, the crisis gripping the eurozone and fears of a double-dip recession. “It is very difficult for both consumers and organisations to know what the right thing to do is,” says Lewis. “The government is wrestling with it, and there is an incredible amount of new legislation coming through.”Against this backdrop, the company has been focusing on being seen as a great employer by its 3,000 workers and, as part of this, embarked on an engagement survey in 2010, the first of its kind for five years. “Being high performing and a great place to work is essentially what our people strategy is about,” Lewis says. “We used the survey to provide the data to feed into improving our people strategy. It was an approach driven from the bottom up.”
HR challengesThe survey, run by Hay Group, turned out to be very positive, with higher levels of engagement and enablement among employees than the average, both for UK companies generally and for financial services firms globally. But this, ironically, created the main challenge for Lewis.“Most organisations would have been over the moon with the results. So it was a great temptation to say: ‘We haven’t got a problem’,” explains Lewis. “We don’t have high turnover, high absence rates or high levels of disciplinary procedures, and we never did have. So the really big challenge was to bring about a step change when there wasn’t a burning platform.”The company resisted the temptation to do nothing and instead embarked on a series of initiatives aimed at creating a successful people strategy that would further boost engagement and profitability. These initiatives were enthusiastically embraced by employees, yet this also provided another challenge, says customer services director Tracy Harris, who has been involved in the development of a number of the initiatives.“The enthusiasm in wanting to make a team’s engagement levels better is infectious, and can become quite competitive,” Harris says. “This is good, but needs to be balanced with the fact that we need initiatives that are going to give us the biggest returns for the most people.” Nevertheless, the same survey conducted a year later showed the work had paid off: engagement (including whether staff felt a part of the organisation enough to “go the extra mile”) and enablement (whether they had the tools and authority to get on with their jobs) had increased still further. That responses to every single question had improved is a source of pride to Pru UK chief executive Rob Devey, who points out that “the overall shift in results is one of the strongest and most consistent that Hay Group has ever seen”.
Key initiativesPart of the reason for the improved results was the impact of initiatives based on a line-by-line analysis of the 2010 findings. After that survey, the company set up an engagement board, whose members comprise senior staff from each part of the business.“We said we wanted them to become experts in what the survey was telling them,” Lewis says. “They picked out the themes that mattered, and they were the drivers of the people strategy that came out of it. So, rather than the strategy being written by HR, it was written by the business leaders, based on what people in the organisation were saying would make a difference.”As part of the strategy, the company decided to communicate to employees a six-chapter “story” of Pru UK, written by the engagement board. The story examined the history of the company, the market it operates in, the challenges it faces and the actions required to deal with those challenges, where the people fit in and the end game. “We took that story out to every location with our most senior leaders, then continued to tell it using the intranet, business messaging and every other form of communication we could think of, so that people in the organisation could essentially tell the story themselves,” Lewis says.The idea was to engage and enable staff to do their jobs in the context of the entire company and the marketplace it operates in, as well as, more specifically, their own department. As a result the story has been told at a number of different levels: business, departmental and functional, so that individual employees can be clear on what the implications are for them. Staff have also been encouraged to make incremental improvements in their own roles. “Across the business, I have seen people identify better ways of working that we would never be able to pinpoint from the top down,” says Devey.The approach paid off, with a 10 percentage point increase in employees’ understanding of the company’s strategy and direction in the 2011 survey. Confidence in leadership has also increased by 15 per cent in a year and levels of respect and recognition have gone up by 9 per cent. “Getting the feedback from the first engagement survey really enabled us to focus on the things that mattered to people,” says Harris, who also sits on the engagement board.Another medium for receiving this feedback is the engagement forum, set up and funded by the company, which lobbies for initiatives that are important to employees. Every Pru UK staff member is in the forum, but some 30 employees act as forum representatives. Like members of the engagement board, they are expected to become experts at reading and understanding the engagement survey’s findings. Among these findings was the view that line managers were not quite living up to the ideal across the organisation, which is perhaps unsurprising considering some had found themselves in a managerial position because of length of service or technical ability. Pru UK responded with a programme to redefine the job definition for line managers, and change posts for some people. “This enabled us to narrow down the role to people who really wanted to be managers,” Harris says. “It was quite painful – there were some people who had been in very long-standing roles. But equally some staff said: ‘I’m so glad I’m not going to be a manager anymore’.”
The road to empowerment Managers now have more scope to make decisions, about flexible working for example, and therefore more accountability. “We say to managers: ‘We want you to run your own department as if it were your own business’,” Harris says.This backdrop of empowerment runs through many of the initiatives, including how employees manage their benefits package. Pru UK used the engagement survey to reassess its pay and benefits offering, enhancing the flexible benefit pot slightly to appeal to all staff. The company also launched Reward on the Road, a series of events run by the reward team, at every location, at which employees could learn more about their reward package. As a result, positive views of the pay and benefits package have increased by 13 percentage points in a year.“It’s not that we’ve done this through cash,” Lewis says. “We’ve done it through education. It was very important that the individuals in the reward team put themselves out there to encourage employees to ask them questions about their reward package.”Ensuring that certain staff members, especially those at the most senior level, are visible to employees has played a big role in the uplift reported across the two surveys. For example, for the 400 in-house staff based in Mumbai in India, a visit from the executive committee made a huge impact. “In some ways your more remote sites need you more, and allowing people to get really close to senior executives breaks down all sorts of barriers,” Lewis says.Senior staff members, including Rob Devey, have also begun writing weekly blogs on the company’s intranet, with notes about employees with long-service awards. “It’s a little thing, but our people love it,” Lewis says. “They look out for when they are going to get a mention.” Employees too have been encouraged to share their own customer service “pride stories” and, says Lewis, these stories have “poured out”.
Local initiatives It’s this general community feel that Lewis believes has really made the difference, and that’s certainly proving to be the case at a local level, with a wealth of events being run at Pru UK’s five locations. These initiatives – many of which are based on suggestions from employees – range from Christmas fairs and family days to executive breakfasts and information roadshows on a wide variety of topics.“You wouldn’t necessarily think these things would be what employees want, but actually they encompass employees’ families and allow them to develop social connections with colleagues,” Lewis says.These close relationships with colleagues are also encouraged through employee volunteering, with 40 per cent of staff doing some sort of volunteering in the last year, something the company recognises through its annual Employee Volunteering Awards. “There is a richness going on in colleagues’ lives and they get an opportunity to share it and celebrate it,” Lewis says.
Devey believes the range of actions taken, both big and small, have a played a central role in what Lewis refers to as a “phenomenal journey”. “The big ones need to be led from the front by the chief executive and leadership team, but in reality they probably make the smallest impact on the organisation,” says Devey. “These actions are about showing you care and giving permission for people to take the lead with their own initiatives. And it is these ideas that can really change the organisation.”Lewis adds that this is only the beginning – the engagement steering board is now establishing what the priorities are for the year ahead, and planning budgets. “We still see this as the beginning of what is achievable,” she says. “We want to continue to do all of the things that we have recognised add value and we want to move them forward.”So far, for Lewis, Devey and Harris, however, the main lesson learnt has been the importance of getting employees’ opinions. “Keep asking, keep talking, because actually, the answers are there,” Lewis says. “The temptation is to assume you’ve heard it all before, but it’s the people in the organisation who know what will make the difference.”