1 A

ngagement
First Direct staff answer thousands of queries a day in a vast call centre... yet the online bank tops polls for employee loyalty. Why are its workers so highly motivated?
Words: Ddv^d Woodward Pictures: Nict? Sinclair 42 Oirector.co.ub September 200g

onsumers don't like call centresit's an indisputable fact. The anecdotal evidence is everywhere, but more scientifically, an ICM poll found that four ^ ' out offive UK consumers feel "stressed and frustrated"at having to deal with them. And almost two-thirds say they "loathe" the experience. Little wonder then that life on the other end of the line can be pretty miserable. The average call centre employee is more likely to phone in sick than any other worker. Company loyalty is rare: staff turnover runs at around 25 per cent each year

Job satisfaction does exist, though, and so does loyalty. In Stourton, West Yorkshire, an industrial satellite conspicuous by its stark contrast to the glitz and polish ofnearby Leeds, Hes the headquarters of First Direct, the phone and online bank owned by HSBC. It's an incongruous setting for one of Britain's brightest call centres, where hatred and loathing are out, replaced by happiness and high levels of motivation. "We allow our people to be themselves," says chief

COMPANY PROFILE

BANKING PIONEER
Company First Direct Sactor Online/phone banking Staff 3,500 Launch 1989. Set up UK's first text banking service in 1999 Customers 1.2 nnillion

In their own words "It's

impossible to explain just how much we put into making First Direct a great place to work so that customers can experience outstanding customer service"

Get engaged
First Direct has the largest onsite nursery in Europe, with room for 386 children. Recruitment policy is tightly controlledthe company hires one in every 20 applicants, 90 per cent of whom will have a non-banking background. Induction takes seven weeks. A mentor works side-by-side until the recruit is confident enough to take calls alone. The firm offers more than 1,000 different shift patterns. And the length of calls is never measured. "Calls take as long as they need to take," says Stewart Bromley, head of people experience.

executive Matt Colebrook. "We have always celebrated the original nature of individuals." In fact, he adds, "we celebrate here a lot". Colebrook says Director probably shouldn't print the fact that the HR team spent yesterday dressed up in safari gear, inexplicably towing stuffed monkeys around the office. But the atmosphere he describes feels very much like the antithesis of a traditional call centre. "We have a blast," he says, surveying the vast shopfloor."We're a bit quirky." In between all the fun. First Direct's call centre staff receive an average of 10 calls every houror around 28,00c conversations each weekday. Not many people's idea of a blast, but management must be doing something right, At 14 per cent, staff turnover is way below the industry norm. Happy employees are good to have around if you want satisfied customers. Last year, a GfK NOP survey recognised First Direct as the best call centre in the UK for customer service. This year, it won the Your Money award for best online bank. And while many customers seem satisfied, some look obsessed. Every year, the company receives calls wishing staff a happy Christmas. Some customers call daily, often with personal rather than banking matters. "That's not great commercially," says Stewart Bromley, the company's head of people experience, "but it's about being there for the customer. We're not a typical bank." When First Direct launched, it was not conventional in any sense. It began trading in 1989 as the antidote to what then parent company Midland Bank perceived as customer disaffection. "A lot of people were fed up with clearing banks," recalls Sir Kit

McMahon, Midland's chairman at ihe time. "They were seen as heavy-handed, bureaucratic, unhelpful and unimaginative. We deliberately recruited nonbankers [from the] services industry. This was a bank that wasn't run by bankers." Under the leadership of Mike Harris, who later went on to launch Egg, First Direct grew into a thriving business, adding 100,000 customers in its first two years and breaking even hy year fivean impressive achievement for a hank vthout a High Street presence. At the heart of the business was a pledge to treat employees as individuals, not purely out of altruism, but as a defined marketing strategy: the people were the product. Bromley says tbe idea "from day one" was to use peer support and employee engagement to drive customer service. "The brand is based on people's perception and experience of dealing with us as a business," he explains. "Employee engagement is absolutely critical, and I don't say that lightly." First Direct wanted its staff to exude friendliness, confidence and competence. Qualities you only

Director.co.ub September 2009

sporadically experienced face to face at your local branch had to be transmitted down the phone line. "You can tell if someone's smiling at the other end of the phone," says Bromley. "We wanted customers to feel that our reps were smiling, that they wert engaged, that they knew what they were doing and that they had ownership and accountability," The Department for Business, Innovation Sj Skills (BIS) believes competent, engaged employees will be a key factor in leading the UK out of recession. Last month, David MacLeod and Nita Clarke delivered a report entitled Engaging for Success:
enhancing performance through employee engagement. It

studies the effects ofa fliUy engaged workforce on performance, finding best practice in organisations spanning from the London Ambulance Service to Microsoft. MacLeod uncovered 56 definitions of employee engagement, but settled on "unlocking people's potential, enabling them to be the best they can be". The interesting thing, he says, is that many workers have no idea how good that is. The benefits are perfectly quantifiable, MacLeod

"WE ALLOW PEOPLE TO BE THEMSELX/ES. WE HAVE A BLAST. WE'RE A BIT QUIRKY"

points out. Aside from various studies pointing to boosted productivity, employee engagement is also \ ital for innovation. According to research, 59 per cent of engaged employees say that work brings out their most creative ideas. Only three per cent of unengaged workers say the same. 'Getting innovation through organisations demands people to be completely committed," says MacLeod. More pertinent to First Direct, whicb reUes heavily on reputation, "67 per cent of engaged employees advocate their organisation". Only a tiny fraction of disengaged staff make the same effort. Jayne Carrington is managing director of HK consultancy Right Management. Her company's research into employee engagement shows "44 per cent higher retention, 5 per cent customer loyalty, 50 per cent more productivity"and all in a business likely to be "33 per cent more profitable". It's a compelling set of figures. Carrington says reputation receives a boost from engaged employees because they radiate positivity for the brand. First Direct's efforts to place engaged
September 2009 Director.co.ub ,5

COMPANY PROFILE

employees at tbe heart of its business bas "paid dividends in terms ofreputation and shareholder value," she says. "Two colleagues said wben talking about First Direct, 'they are brilliant, I love tbem'. Tbat advocacy, tbat customer loyalty and the reputation First Direct bas, comes through tbeir staff" To measure levels of engagement. First Direct employees are surveyed annually by HR group Kenexa. Senior consultant Cbristian Roome says that tbe bank's engagement scores "stomp all over" the competition, making its staff among tbe most engaged in tbe financial sector. They also compare well across tbe wider economy. "First Direct's scores are excellent," Roome says. "Wbat 1 would draw attention to is notjust tbe fact that the scores are high, but tbat tbey bave driven change year on year. Fngagement isn't a static concept. Wbat's important is tbat you do something witb tbe

"IT'S HUmBLING TO LEAD FIRST DIRECT STAFF TALK TO ME AS A PEER RATHER THAW AS A CHIEF EXECUTIVE OF A LARGE BUSINESS"

feedbackyou are constantly seeking to improve." Roome says leadership is a key part of an engaged workforce. "Employees need to leel as if tbe business at a senior level takes their opinions seriously. That leadership is taking responsibility and taking the business in tbe right direction. That's the culture of First Direct. People feel like they are ililly involved." The bank isn't Britain's only advocate of employee engagement. On an equal plain is supermarket group Sainsbury's, wbich owes much of its resurgence under Justin King to mastery of human resources. Sainsbury's employs 150,000 people in 800 locations, wbich, says King, makes it difficult for true engagement to occur naturally. You bave to work "very bard" at it, he explains. "Our starting point is that everybody wants to come to work looking to do a good job". But why is it tbat some people don't do a good job? He offers three explanations: "Eitber tbey don't know what a good job looks like, tbey don't bave tbe tools to do a
Director.co.uli Septsmbsr 200g

In touch: First Direct chief executive Matt Cotebroob addresses all 3,500 staff cacti year to boost employee engagement levels. '*l laob at my people a5 my shareholders," he says

good job, or they don't have the context." King says organisations spend a "tremendous amount of time" on tbe first two, but rarely provide staff with context, or "giving people a real reason for why they are doing wbat they're doing". Context at First Direct is supplied by "direction" sessions, annual presentations delivered by Colebrook to ail 3,500 employees.To ensure the message stays meaningfiil to such a large number of staf] the company splits tbe sessions into 26 groups. Colebrook addresses each group personally. It takes him two weeks to complete the presentations, plus two weeks of "solid preparation". Isn't that more time than the average CEO spends talking to shareholders? "I look at my people as my shareholders," he replies. "Tbe leadership team, the board, personally dehvering tbe First Direct vision for the next year. I think that's pretty inspiring." Ratber less motivating is tbe job of engaging a shrinking workforce. Wben companies do well, it's easier to make employees feel tbey are a valuable part of the set-up. Tbe threat of redundancies, from wbich Fiist Direct is not immune, upsets that balance. Carrington says engagement depends on maintaining high levels of respect, especially for departing employees. "Tbey call it the survivor syndrome," she says. Tbose left bebind will be more engaged if departing colleagues were treated fairly. "The key is having trusted leaders that bave the capacity to listen and who are straightforward in their communications. Act with credibility." First Direct made 70 staff redundant in March. "We've bad to make some tough calls," says Colebrook, "but wben you are able to communicate clearly why you're doing it, because tbe vision was set out clearly at the front end of the year, people understand it." He says there's a strong feeling of togetherness at the bank. "It's a humbling experience to lead First Direct. Not many CFOs would work here. There's a huge element of humility in what I do." The hierarchy is pretty ftat, too. "People come up to me and talk with me as an individual and as a peer rather than as a chief executive of a ratber large business." Engagement is a two-way street, says Carrington. "Managers often feel tbat because they are engaged, everybody else is engaged. They see everything tbrougb rose-coloured glasses'why are people not happy? I'm bappy, sitting at the top, with my nice car and nice lifestyle'." At First Direct, management sits alongside staf! "People see me on the floor," Colebrook says, and on tbe way to work, too. "There are no special car parking arrangements. I use tbe bus with everybody else. That's quite unusual in banking." El