MSP / Contingent LaborTalent Acquisition

Competitive Advantage

An on-site team of specialists guided the alignment of Nationwide’s contingent and permanent workforce, resulting in reduced costs and increased efficiency.

By Russ Banham
Following the crisis of 2008, many financial organizations confronted a dire reality—a substantial dearth of specific skill sets to execute complex and rapidly developing regulatory demands. A fluctuating market that percolated the previous six years now boiled over, as HR departments ransacked the globe for the needed proficiencies.
Recruiting this talent became a strategic imperative for many enterprises, given the competition for skills in short supply and the growing global demand. This was the case whether the human capital was deployed on a fulltime or contingent basis. Few companies would disagree that having the right people in the right jobs is the most vital business asset—by far.

Nationwide Building Society in Swindon, England, the world’s largest building society, the second-largest savings provider and a top-three provider of mortgages in the U.K., would concur with this assessment. Eighty percent of Nationwide’s workforce is permanent full-time staff. The remainder is comprised of the high-level skill sets that many other financial services organizations were competing for—IT project managers, software developers, and engineers, not to mention temporary workers.

“We often need to bring in expertise for system upgrades, and we need these skills on a flexible basis,” explains Robert Aldrich, Nationwide HR director. “In the past, we’d be deluged by outside recruiters sending us resumes for people who would come here for a week to a couple years. For example, if we launched a big campaign involving attractive savings rates, we might need to build a customer support staff for three months.”

The problem was managing the more than 100 recruitment providers that submitted resumes for consideration each time a need for contingent labor arose. Since this employment ranged from highly skilled project managers to less skilled, clerical positions, the pay rates ran the gamut.

Then, an encounter between Aldrich and Karen Browne, president of workforce solutions provider Advantage xPO, charted a way out of the morass. “I met Karen, we talked, and I soon realized that her firm could handle all those different providers for us,” Aldrich says. “But, what sealed the deal was the unique way in which they would do this work.”

The singular value proposition of Advantage xPO is to put its people inside the four walls of its clients. To the outside eye, they would appear to be actual employees of the companies they service. “Karen told me they would work right here in Swindon as part of our (recruitment) team, get to know the culture and special needs of our organization, and provide a much higher level of efficiency and cost-effectiveness,” says Aldrich.
“Right from the outset, she said they would consolidate our spend on contingent workers and centralize the supplier relationships, driving down the cost of recruitment while improving service levels and innovation,” he adds. “I was sold.”

Although Nationwide subsequently went through the usual process of sending RFPs to providers, Advantage xPO had an advantage from the start—its on-the-ground managed services. As Browne puts it, “To be successful as a solutions provider, you have to absolutely position yourself as a seamless extension of the customer. We’ve taken this to mean literally operating within their HR structure. Our people perform work as Nationwide, not Advantage xPO—we are a true extension of their internal team.”

Bodies in Motion
The five-year partnership between the organizations is financially substantial, the parties contend, with industry scuttlebutt estimating significant cost savings for Nationwide. “It’s a pretty sizable deal for us,” Aldrich acknowledges. “And we’re a pretty sizable building society.”

Founded in 1846 as the Provident Union Building Society, the firm has grown through more than 100 mergers into the world’s largest building society as well as a major provider of credit cards, and tallies a membership of 15 million people or one in four U.K. households. It is owned and run for the benefit of these members, much like a mutual insurance company in the United States.

From an administrative standpoint, Nationwide is equally outsized, with more than 18,000 permanent and contingent workers serving its huge customer base, one fifth of them constantly in flux. Since partnering with Advantage xPO in February 2009, the workforce solutions engagement has delivered on its promise, cutting recruitment costs, increasing the quality of internal hires, and producing a 22 percent cost savings in the first year. Both parties are now pursuing an extension for another five years.

The key to the partnership, Aldrich maintains, is having Advantage xPO support staff right outside his office door. “They understand and share our values, which ensures that we sell the organization in a consistently positive way [to job candidates],” he explains. “What marks this out is the closeness of the relationship. I’ve got 15 people from their team within a shout, in addition to 350 of my HR colleagues—all right here. They’ve all gotten to know each other extremely well, which makes this seamless from a business-client perspective.”
With more than 75 percent of the original team still in place, Advantage xPO has developed an integral business partnership with Nationwide. “Whether it be a professional contractor to design a new banking platform or an hourly temp to handle the administrative needs of a new customer, our tenured team understands what they are looking for,” remarks Chris Evans, head of strategic accounts for Advantage xPO. “We’re finding the right talent to keep pace with the emerging compliance and regulatory pressures of the business by being on the ground and anticipating where the industry is moving.”

This profound collaboration yields superior recruitment processes. Says Aldrich, “I have the confidence that we will have the best program managers, people with absolutely the right skills who share our culture, when I need them.”

This ability to have the right people in the right positions at a specific time when they are needed is a powerful competitive differentiator. As Aldrich attests, there is intense rivalry for the specific skill sets Nationwide seeks, a competitive battle that continues to heat up. According to the Chartered Institute of Personnel and Development, the proportion of employers reporting a “war for talent” increased sharply from 20 percent in 2009 to 62 percent in 2013. Six in 10 companies report difficulties filling key employment vacancies, at present.

Obviously, companies can’t grow and prosper if they cannot attract the right skill sets. When they have these proficiencies, the financial benefits are substantial. A study by the Academy of Management Journal indicates that the top 15 percent of companies with superior recruitment and talent management practices achieve considerably higher sales per employee, market value per employee, and profits per employee.

This may explain why company CFOs have ranked the “ability to attract and retain qualified workers” as one of their five major concerns over the past two years, according to a survey by Duke University and CFO Magazine. Certainly, no organization can afford the time to wait for capable candidates to fill vacant slots, even on a contingent basis. If a company hesitates, its competitors will sneak in and take the best. Small wonder why Nationwide puts such a premium on the consistent marketing of its employment brand and culture. “With more than 100 (recruitment) providers, we needed a way for all of them to see us as we are, in order to tell the story of who we are,” Aldrich says. “Advantage xPO ensures that they do just that.”

Long-Term Flexibility
One way the partnership is working proactively is their collaborative approach to workforce planning. “I cannot know in advance exactly what skills we might need on a contingent basis two years down the road,” Aldrich says. “Even if I did know, the requirements could suddenly change. This insists upon a high degree of analytical insight and flexibility. Advantage xPO is extremely customer centric in terms of being flexible.”

Browne agrees. “Overwhelmingly, we are partnered with large organizations that have little influence over their monthly talent forecast. True excellence is our ability to meet the scalable needs of these growing organizations.”

Achieving this goal requires a real-time, in-step approach to on-site strategic account management. “We are highly customer centric,” Browne says. “Our hybrid approach calls for on-site, customer-facing value added services that are supplemented by offsite support when the solution requires this.”

She adds, “What we don’t have is 300 recruiters sitting in a centralized hub outside a client’s locale thinking they know what needs to happen for that company. This is why we have been successful in helping clients recruit higher-end IT and engineering roles; the candidates that are in short supply and high demand.”

In fact, research shows that 100 percent of Advantage xPO’s clients report that the firm’s approach and execution is improving their talent acquisition operation.

The partnership has paid off for Nationwide, Aldrich contends. The overall cost of talent acquisition is down because Advantage xPO has whittled down the number of outside recruiters. “Fewer recruiters provide better people,” he says.

He cites several other positive metrics, including:
• 83 percent of employees believe that Nationwide delivers great service to its customers, compared to 71 percent in the financial services industry.
• 93 percent of employees understand the relationship between their job and Nationwide’s overall goals (financial services industry average is 80 percent).
• 71 percent recommend Nationwide to family and friends as a place to work (financial services industry average is 66 percent).
• Employee engagement and enablement scores, as well as employee retention rates, are among the highest in U.K. financial services.

Engaged employees are vital to Nationwide’s success, the HR director asserts. “When recruiters bring in people that don’t fit our culture, we incur a cost to rehire,” Aldrich explains. “In addition, this can be very disruptive to the business, affecting customer satisfaction, as well as other employees’ peace of mind. Disengaged employees take a toll on all companies, no matter how superior their products or services are.”

Engaged employees hired on a contingent basis can also serve as a pipeline of potential candidates for longer-term jobs. “We’re putting more and more interns, for example, into permanent positions,” Aldrich says. “This is because they were the right people from the start.”

Certainly, having right people in the right jobs is the best way of turning human capital into financial capital. Having them there when needed most is the icing on the cake.
Russ Banham can be reached at

Tags: HRO Today Forum North America, HRO Today STA, MSP & Contingent Labor, Talent Acquisition

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