As we approach the end of another year, staff in Lloyds Banking Group are more disengaged from the business than they have been since 2014.
Anyone who has seen Group Chief Executive Charlie Nunn’s interview entitled ‘A lifetime in banking’ at the Faculty of Economics, University of Cambridge, will know that he’s a numbers man. Well, what about these numbers? Since he joined the Group, the Employee Engagement Index has fallen from 78% to 66%. As the table below shows, that’s the lowest score since 2014.
And employee disengagement matters because it strikes at the heart of the value creation Mr Nunn’s trying to achieve. According to research carried out by McKinsey, employee disengagement could cost a median-size company about £70 million a year in lost productivity. That’s going to be worth a lot more than any cost savings that have been announced over the last few weeks.
And it get’s worse. The employee Net Promoter Score (eNPS), which measures whether staff would recommend Lloyds as a place to work, was just +4% in 2023, that’s 19 points lower than it was last year. That’s the most telling statistic which Mr. Nunn and Ms. Doherty, Chief People & Places Officer, need to worry about.
Nate Dvorak of Gallup provides an elegant analogy for the relationship between eNPS and employee engagement: “Fans wear your jersey and cheer from the stands. Players put in extra practice, score points and give every last ounce of energy to win. eNPS tells you who your fans are. Employee engagement tells you who your players are.”.
In Lloyds, both fans and players, to carry on the analogy, are all singing from the same disengagement hymn sheet. Mr Nunn and Ms Doherty have jointly driven the eNPS and employee engagement scores off the proverbial cliff. That can’t be good for the future success of the business. And let’s be honest, allowing staff to brings their dogs into work, which many staff will support understandably, is not going to change the dial on engagement.
And instead of acknowledging that some of the changes she introduced this year – with the support of the two in-house staff lap dog unions (couldn’t resist that!) – have driven that disengagement, Ms Doherty was doubling down last week. In her message to staff announcing the engagement score, Ms Doherty said:
“the main themes for this centred around negative feedback about changes we made to our ways of working earlier this year. While I know this has been challenging for many and we’ve taken some valuable lessons from it, our approach to Flexibility Works is the right one and we’re committed to making it work and continuing to listen to you.”.
So, no change then, regardless of what staff think. Is it any wonder that only 51% of staff believe that anything will change on the back of the worst engagement score in nearly 10-years? Mr Nunn and Ms Doherty need to understand that organisations are successful because of, and not in spite of, their staff. They both need to learn that lesson quickly.
We will be returning this issue in future Newsletters.
Lloyds has been busy announcing major job reductions in non-branch areas and of course the branch network has been chopped repeatedly in recent years. This means members need to be particularly vigilant.
When an organisation is planning to reduce staff numbers it is very likely to explore ways of achieving that objective as cheaply as possible. Given Lloyds is in that situation there is a danger that:
- Some people senior management want to get rid of will be targeted on the basis of alleged poor performance.
- Those staff with a record of sickness will be identified.
- People on neither of the two other lists will be approached to leave with settlement agreements paying them much less than Lloyds’ severance terms, even though there is no reason for dismissal.
My colleague, Emma Stopford, will expand on these points shortly but in the meantime a Settlement Agreement (sometimes called a Compromise Agreement) is a legally binding agreement which allows the termination of employment. It usually provides for some kind of severance payment which is often significantly less than members would be entitled to if they were made redundant by the Bank. In return for signing such an agreement members give up all their employment rights and agree not to make claims at an employment tribunal.
Members approached with cut-price severance offers, should contact the Union’s Advice Team immediately on 01234 262868 (choose Option 1).