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Five years ago when we were given the task to establish our HR shared service center there were a number of things we’d witnessed elsewhere, when visiting other SSCs/BPOs and were determined to avoid:-

  • High staff turnover
  • High sick absence
  • Poor working environments
  • Paying people more for being with us longer –time-based pay increment
  • Not rewarding people for their skills
  • Not rewarding exceptional customer service
  • Not having a learning/development culture
  • Non-equal opportunities
  • Rigid work patterns
  • Silo mentalities
  • Treating people like kids
  • Always having to negotiate a change
  • Overtime and allowances
  • Getting rid of daft job titles, e.g., HR administrator
  • Being seen to be slow and unresponsive
  • Not having fun!

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Our Vision

Very simply we wanted to create a top class business unit that:-

  • Provided a single point of contact for customers via phone fax or e-mail
  • Provided local face-to-face contact to deliver those services, which could not be sourced remotely, such as recruitment, learning delivery, health and safety inspections, and the more complex advice and support
  • Centralized all other processing activities in order to drive in standardization and drive out cost
  • Was ISO accredited to ensure that all processes were subject to both strict change control and continuous improvement
  • Had a completely different way of working for our teams and liberated both their thinking and their own individual learning
  • Was IiP accredited to ensure employees’ support processes were consistent and represented good practice

Our Goals

  • To create the shared service box of the Dave Ulrich "3 box model"
  • To reduce staffing levels by at least 40% and make annualized savings of £50m
  • To put in place a continuous improvement capability
  • To provide a single point of access for all employee enquiries


The most important part of any organization are the people who work there. So one of the first tasks we undertook was to agree two new employment frameworks with both of our trade unions, entitled "The New Employment Framework." These agreements mirrored each other and set out our stance to provide a unique working environment where:

  • Our people are paid an upper quartile reward package based on median pay but with a bonus package based on business unit performance that meant their package was the best available
  • Our people are rewarded fairly for performance – which includes a quarterly bonus payable on achieving a customer perception survey target relating to "perception being a little or a lot better than expected by our customers"
  • Qualifications and professional development are encouraged for everyone. Everyone must achieve NVQ2 (National Vocational Qualification 2) within 18 months of joining us, and is entitled to go on to achieve NVQ3.After qualification they receive an increase in their pay to recognize their skills
  • We have only seven levels, so there is the minimum of bureaucracy
  • Our job titles relate to what we do – e.g., customer service advisor
  • Flexible working was introduced to ensure people could work hours and days that suited, firstly, the employer and then the team member
  • Introduced a shorter working week – 35 hours – to promote greater work-life balance
  • Everyone is entitled to three days development off their own job time in any one year
  • Development of people takes place as part of our every-day work
  • 1:1’s with their line manager at least once per month
  • Weekly work time listening and learning sessions with their colleagues.

Additionally we have also introduced:

  • Active CPD interventions which are open to all
  • Top-notch office environments
  • Lean thinking – 5S where our ways of working and office environments have been transformed
  • Community challenges, where teams go out and take on a challenge within their own community
  • Encouragement of benchmarking visits
  • Forced distribution as part of our appraisal process
  • A talent management process as a key intervention to identify and nurture talent at all levels

Talent Management

We identify our key performers as part of our annual appraisal round. We then invite these key "talents" to join us at a talent management panel, where they present evidence regarding their aptitude in three key agilities – strategic, learning and emotional. I provide the feedback to the individuals. From there we assess their development needs and identify what we can do to help grow them. One such intervention has resulted in a number of our staff working on projects to support our business partners with people needs, such as foundation degrees. Others are identified for development opportunities in other work areas, for up to six months – thus creating opportunities for new people to grow into these vacated roles.

Key Learning Points

There are always things that you can learn from major undertakings. In our case, these are the key ones:

  • Communicate/communicate/communicate – and never ever miss a chance to do so face-to-face. The only way that change can be delivered successfully is for everyone to embrace the change and the only tool open to us is face-to-face communication
  • Always keep your deadlines when you make promises to your people
  • Always put the people factor at the forefront of decision-making and seek to create personal certainty at the earliest opportunity
  • Measurement in HR appears to be an alien concept! However, it is the one tool in the bag that gives customers the confidence that we are on top of the job. So it has to be a "must have"
  • Customers are not used to providing detailed specifications or plans of activity. To get the shared services center to work effectively, specifications and plans are essential.

A strange but true fact is that all of these key learning points involve people. No other factor makes the business case for us. "People do matter first, second and third on any list of shared service center priorities.

The next stage of our journey

As we enter our sixth year of operation our key challenge is to continue to build on the solid track record that we have put in place. For each of the past five years, year-on-year costs have been reduced, and both customer perception and employee satisfaction has improved – to a company record level. Sounds easy, but in practice this has been a very tough challenge!

  • There are two major initiatives that we are currently working on:-
  • We are preparing to design, develop and implement a new HR system - We are piloting a new way of working called "Tomorrow’s HR today"which effectively makes our contact center proactive in its methods of operation and which means we can better engage with line managers in driving the engagement agenda. It is still early days, but we feel this will represent a step change for us in how we deliver our service.

Both of these initiatives will require a new skill set for us and make our people agenda even crunchier than it has been. In order to continue to develop our people we are introducing a foundation degree in HR shared services to supplement our existing NVQ program. Our people are keen to learn and we are keen to encourage and promote lifelong learning. In order to make this easier, we are making it one of our key objectives for 2008/9 that everyone has 10 days of development per year, up from three days development per year in the past (an increase of seven days per year!).

Vital Statistics

  • Our headcount has reduced by a net 1,600 people
  • Our staff turnover runs at around 6%
  • Our sick absence runs at around 3%
  • Savings of over £65m per annum have been generated
  • 99% of customers are happy with the service that is provided
  • Services have been made easier to access
  • We established a shared service center obsessed with measurement
  • Personnel Today 2006 Excellence Awards – overall winner
  • Personnel Today 2006 Excellence Awards – winner in Shared Services and Outsourcing
  • SSON 2007 European Shared Services Excellence Awards – overall winner – Shared Services Organization of the Year
  • SSON 2007 European Shared Services Excellence Awards – Employer of the Year


Our journey has been short in terms of lapsed time – just five years from inception – but packed full in terms of effective time. We still have some way to go, but we now have in place a lean organization, which supports the company.

The one point this article has not covered so far, but which sums up the transformation for us, is that in a recent people survey 82% of our people said that they were happy. So in conclusion – look after your people and the shared service center looks after itself!

About the Author
Dermot Toberty leads the Royal Mail Human Resource Shared Service Center. The unit looks after all the needs of some 190,000 employees and a further 200,000 pensioners covering the entire employee life cycle.

Since the creation of the Center, staff numbers have halved by 1,600 and cost savings in excess of £60m per annum have been made.

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