Transforming the HR operating model: NatWest Group

Operational context

A fundamental part of realising NatWest Group’s One Bank strategy was taking employee experience to the next level. The ambition was to create an employee experience on par with that which customers receive. Recognising that the Ulrich+ model had reached its limitations within NatWest Group, the HR team sought to reimagine the HR operating model with the aim of enabling greater agility, connectivity, and adaptability in anticipating and responding to customer and employee needs.

Drivers for transforming the HR model

NatWest Group’s decision to reimagine the HR operating model and focus on employee experience was driven by many factors, such as empowering employees to deliver NatWest Group’s purpose and enabling the One Bank strategy in response to:  

• the continued war for talent 
• rapid evolution of technology   
• demographic changes amongst the workforce (eg a majority millennial workforce).  

These drivers have led to a profound shift in employee preferences and expectations around employee experience. Therefore, the transformation needed to go beyond a process improvement or technology shift, with improving the employee experience as the core driver.

What they did

Drawing on market research, gathering data and insights and harnessing their Customer Journey learnings, NatWest Group undertook the challenge to reimagine the HR operating model to enable brilliant employee experiences. Taking a human-centred design and an evidence-based approach enabled NatWest Group to analyse the drivers and develop a ‘Goal and Journey’ archetype to pilot. Establishing the Goals concept, with end-to-end ownership of core employee lifecycle components, enabled a holistic, employee-focused solution. This helped to drive process simplification across strategy and policy and the operational delivery of propositions and services, as well as enable continuous improvement. 

Alongside this was a desire to ‘dial up’ the digital transformation to increase efficiency and streamline workflows. This included the ‘Archie chatbot’ as a single-entry point for employees, to improve first time resolution of queries. 

Piloting this model provided proof of concept and confidence in the day one launch, ensuring the design included the critical components needed for the new ‘Goal and Journey’ model.

The new structure

January 2024 marked Day 1 of a multi-year transformation journey, with approximately 60% of the HR function aligned to a Goal. The model is focused on creating end-to-end value streams based around the employee lifecycle, eliminating silos, integrating design and delivery.  

The HR model has a unifying vision and set of objectives and key results (OKRs) to ensure strategic alignment. This is broken down into several Goals (e.g. onboarding), and Shared Capability teams (e.g. DE&I, Behavioural science, Data & analytics) which are essentially disciplines with deep expertise (see Figure 1).  

Each Goal has ultimate accountability to drive what work needs to be done, how services and experiences could be improved, and manage risks to drive the greatest value and impact. This is facilitated through the Goal’s leadership team (e.g. Goal lead, Journey managers) who are responsible for both the day-to-day operational service delivery, change execution and performance. Each Goal is further broken down into Journeys, which encompass people who have t-shaped skillsets (deep expertise in a particular area and the ability to cross-collaborate with other disciplines). Working end-to-end, rather than in silos, enables Goals to incorporate multi-discipline teams and expertise - bringing the right people together to inform business and people solutions. They draw on colleague data and insight and use human-centred design thinking (for example, a double diamond design process) to further develop the journey. 

Shared Capability teams are made up of specialist knowledge and expertise and may be within or outside the HR function depending on the solution being developed. For example, Digital Workplace solutions often draw on several disciplines from across HR to Technology and Property. Their role is critical to shaping and informing products and solutions. Resource allocation is managed with the Goal teams based on Goal needs and priorities.  

Finally, the HR model is supported by an enabling team, that supports the HR function to run efficiently and effectively which includes ongoing business performance management, and transformation of the HR model. The Strategic Business Partner role has largely remained the same.

Enablers

There were several key enablers to ensure the model was implemented and embedded effectively: 

1. Having guardrails and standards: This has helped teams to work within set standards and frameworks, and provided clear parameters across the model (eg interaction models and ways of working within the Goal teams). This makes it easier for employees to understand processes, boundaries, expectations and responsibilities as well as mitigate risk.   
2. Translating the people strategy into tangible outcomes and focusing the HR function: This formed the basis of the annual objectives and key results (OKRs) to guide design choices and prioritisation within HR. 

3. Clear prioritisation: Big room planning which is undertaken quarterly, where teams prioritise the focus for the next quarter, helping to avoid bottlenecks in communication and ensuring scarce skillsets are deployed to what makes the biggest difference. Two separate planning sessions will take place every quarter with Senior HR Leadership Group, which includes Goal leads, Shared Capability leads, Goal leads and their team.

Challenging areas

1. Pace of delivery: Redesigning the HR operating model end-to-end and translating it into structural changes has been complex, making delivery challenging at times. Enabling effective delivery and holistic solutions relied on prioritising what was critical, to ensure the right people were aligned to deliver the work and recognise what was a ‘day two backlog’ that could be deferred to a later stage of the multi-year transformation.  
2. A cultural shift: Understandably, a transformation doesn’t happen overnight, it takes time, and traditional ways of working and concepts were challenged. Transforming to the Goal & Journey model required a significant cultural shift towards new behaviours and mindsets. Personas were used to take a more targeted approach to growing skills across the HR function through coaching, accreditation and targeted development programmes to build understanding and confidence with the new model. 
3. Getting the balance right between digital and human channels: A key driver for the operating model was to improve employee experience, which meant identifying the ‘key moments that matter’ within the Journeys. This drives the HR service channel strategy to understand the elements that require human interaction to support the intended employee experience of the HR service.

Outcomes

NatWest Group is continuing to experiment and improve the model as the transformation journey continues. Early success measures and positive impacts for employees and the business include the following:   

1. Improved employee digital experience: Improved employees’ digital experience by simplifying processes and technology steps, as well as leveraging better integration between HR systems. This has made it easier and quicker for employees when interacting with these systems. The ‘Archie chatbot’ acts as a single-entry point for employees and has been further enhanced since it was introduced to save employees’ time and offer a more conversational workflow and tailored information. Recent improvements in functionality have resulted in 32,000 employee hours saved. Additionally its success rate for the first-time resolution of HR queries has increased to 64% on average, and up to +80% in some areas, eg benefits. This continues to improve month on month 
2. Investment in HR systems has reduced manual processes: By leveraging technology and process simplification, the NatWest Group has made it easier and quicker for HR colleagues, giving them more time to focus on what is important resulting in higher employee satisfaction. More than 385,000 employee hours have been saved in 2024 and this is on track to exceed 820,000 hours in 2025. 
3. The creation of new policies and supportive materials: As a result of the pilot accelerator programmes, policies have been updated and simplified. For example, the Family Friendly policy programme has led to a 48% improvement in first time query resolution and improvement in employee experience.  

Continuous review and improvement 

This is the start of a multi-year transformation and the NatWest Group is continuing to experiment and improve the model to unlock value, as the transformation journey continues.

Top tips for a successful transformation

1. Keep core objectives front and centre: Review OKRs regularly to ensure the model delivers what it was set up to achieve. 
2. Devise a targeted approach to developing capability and core skills within the people function: This will help to embed the new model and bring to life new ways of working.   
3. Partner with leaders across the business to understand strategic drivers: Input from key stakeholders enables open communication, alignment and resolution throughout the transformation.  
4. Start small, test and iterate: Having an agile/growth mindset and embracing flexibility has helped the team move at pace when identifying, implementing and enabling continuous improvement in products, services and the model itself. For example, having a proof of concept Goal to build confidence in Day 1 launch. 
5. HR Leaders role modelling new ways of working: HR Leaders are leading the transformation from the front. This means embracing agile leadership and empowering Goal teams to prioritise and make timely decisions as needed.