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How good HR improves customer satisfaction

10th Jun 2021
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Pandemic conditions were always likely to be a curse for customer relations: disrupted operations, staff shortages, uncertainty about when and how systems would return to normal, less reliable access to support. Unsurprisingly, the UK index compiled by the Institute of Customer Service in January 2021 showed the lowest level of customer satisfaction since 2015. 

This isn’t the whole picture however. Some businesses have been able to buck the general trend - with lessons for all customer-focused operations.

The customer revolution

Each year, as part of its programme of certification of best practice, the Top Employers Institute gathers data on the HR policies, priorities and performance of 98 major organisations in the UK and Ireland. Top Employers involved include ABB UK, Avon Cosmetics, DHL, FedEx Express UK, Harrods, Huawei, PepsiCo, Pfizer UK and Santander.

The latest UK data - published in June 2021 - has demonstrated a link between employers committed to the highest standards of HR practices and customer satisfaction during the lockdown periods. Nearly two-thirds (65%) of our members reported increases in customer satisfaction levels (up from 43% the previous year). Only 1% reported a decrease over the same period. At the same time, 68% of employers reported revenue growth during the pandemic (up by 7% on 2019); 56% a rise in profitability (up 7%); and market share reportedly grew for 51% (up 3%).

How has this been possible? Part of the answer is around the ability of some businesses to stay ahead of changing customer needs during the crisis. But how has this been achieved – and how can other organisations achieve the same?

The intense focus on customer satisfaction, at a time when channels between organisations and their customers were both subject to such disruption, is easier to understand when one looks at the business priorities of UK Top Employers over the past year.

Business Priorities for 2021

1. Customers (attracting, retaining and engaging)

2. Performance (driving operational performance)

3. Health and Safety of employees 

4. Innovation (creating new products and services, digitalisation)

The striking feature about this list of key business priorities from our latest survey is less that customers came out on top but more that attempts to win, keep and engage them has been underpinned by two internal priorities: the obsession with operational performance; and a positive step change in concern for the health and safety of employees during the pandemic.

Up for change 

The urgency brought about by the pandemic has produced a much clearer and closer alignment between HR and business priorities:

  • To stay ahead of rapidly evolving customer demands, the focus on cultural and organisational change is the top priority for HR;
  • The obsession with the performance revolution among Top Employers is reflected in commitment to strategies on people and talent (2nd), engagement (3rd) and diversity (4th);
  • The clear business focus on the health and safety of employees is shown in a very sharp rise in work-life balance and employee well-being (up to 5th from 14th) among HR priorities in a single year).

Delivering strong levels of customer service is dependent on organisational and cultural change to support it. The latter, though, is far easier said than done. Research consistently shows that most change initiatives fail to achieve their intended outcomes and may even limit an organisation’s potential and its people. The CIPD, for example, has shown that historically, the complexities and difficulties of delivering change have resulted in change failure rates as high as 70%. 

Evidence from the Top Employers shows how change management has become a core driver. 75% have defined change management as a core capability; 79% have a targeted change communication plan; 77% say their managers are held accountable for their role in supporting and enabling change. Three in 5 have already identified and appointed a Change Champion.

Energising people for performance

The importance of change to HR is also reflected in increased employee involvement, technology and the adaptation of HR policy, processes and systems.

In particular the Covid-19 pandemic looks to have increased the sense of urgency around performance: an improvement in the attention given to talent through performance management, to engagement strategy and practice and to a high priority for diversity and inclusion. Data from Top Employers shows how, almost without exception, senior leaders are now involving themselves in the performance management system; how there is more coaching for managers to help them to help others and ensure performance objectives are linked directly to business strategy.

A closer look at the detail of the research also reveals that what is changing most is the attention to detail when delivering personal development plans. This has been made possible by the growing importance of technology in delivering personalisation, feedback and recognition software, that can be shared at all levels of the organisation, alongside a more sophisticated use of data analytics.

The foundation of good customer service is engaged staff. The evidence from our research demonstrates how increased attention to the needs of individual employees - through listening, empathy, providing active support for wellbeing - all have an impact on levels of commitment. People Management magazine has reported how 86% of businesses say employee communications have been a higher priority since the pandemic. But Top Employers have stood out in additional ways, with the introduction of regular ‘pulse' surveys, involvement in action plans for improvement and the regular use of employee focus groups to keep engagement plans aligned. Significantly, employee wellbeing has shot up to number five in the list of priorities (up from 14th in 2019, 18th in 2018).

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