You might not think it to visit the thriving streets of London’s faster-developing boroughs, but the British tech industry has a problem. While it boasts no shortage of capital (it attracted $15bn in investment last year), the biggest bucks are still earned in Silicon Valley – and when the UK’s finest tech firms reach a certain scale, they head elsewhere.
There is one notable exception to the rule. Sage, one of the biggest names in business software, may operate in 23 countries but it was founded exactly 40 years ago in Newcastle, where it is still headquartered. Tyneside’s largest private sector employer, it is a notable homegrown success story that remains in rude financial health (profits rose 6 per cent year on year in 2020) and counts several million customers, many of them smaller businesses who benefit from its accounting and payment systems.
Amanda Cusdin, its chief people officer, has been with the business for six years – an aeon in industry terms, and long enough to see Sage turn its technological firepower on its HR operations. Four or five years ago, she says, that wasn’t the case: “But now we want our colleagues to have the same experience they deliver for our customers. If we give them tools that make them fantastic at their jobs, they will deliver that.”
From an HR perspective, that has meant looking at how employees experience different key career stages, where AI and automation can help them and where HR can, as a result, direct its resources to create greater value.
Performance management, she says, is a prime example: “Three years ago, we did performance management very traditionally at year end and it was a labour-intensive exercise for the HR team. It took two or three months of work. Now we ask leaders to review individuals once a quarter, for 15-20 minutes, and the forms are automated. Our teams can focus on helping leaders have effective conversations and driving insights. We spend less time administering the process and more time optimising it.”
Sage, she adds, hasn’t mandated the move to its new process but has seen 95 per cent of managers complying, because they see the technology-led shift bringing benefits. The same applies for inclusion, where the business has used analytics to inform a strategy it regards as crucial.
It’s all part of a three-year shift Cusdin has overseen, streamlining the HR operating model and focusing on diversity, listening to employees, creating a great place to work and encouraging innovation in customer-focused solutions.
It’s a broad set of priorities for HR, but it’s clearly working. Under the new strategy, Sage has increased its employee net promoter score (NPS) by 57 points, reduced global attrition by 7 per cent, slashed its time to hire and picked up awards from Glassdoor and others for employee experience. Most encouragingly for Cusdin, she has been able to demonstrate a positive correlation between employee NPS and customer NPS, justifying investment in staff development.
The frontier for the next three years is to examine the future of work, prompted by the increased flexibility employees will expect post-lockdown. Cusdin doesn’t think it represents as seismic a change as some. But Sage does recognise the benefits of flexibility and is looking at a nuanced model as employees return to its global offices: with the majority saying they want to work face to face at least some of the time, the business is looking at different models for home-based, field-based, office-based and flexible workers, with the latter the overwhelming majority. Leaders are creating agreements at a team level on how people will work to meet customer needs, with an emphasis on being able to adjust plans as circumstances change.
“We’ve recruited about 4,000 people over the last 18 months who haven’t been in a Sage office, and while we’re really pleased with the experience we’ve provided remotely, our culture is a really important part of what we do and we want that to continue,” says Cusdin.
“But we won’t go back to the nine-to-five, five days a week and one of the reasons is the talent – the people we want to recruit globally do not want to work in that way, so we want to be able to offer flexibility.”
Culture, as Cusdin suggests, may be the key to why Sage thrives, and it gets plenty of practice at examining and adapting its values. The business has grown by acquisition and makes multiple major integrations and disposals each year. The secret, she says, is for HR to use the position it holds from the outset of M&A negotiations to urge a conversation around culture and whether the potential purchase will make sense from a people perspective as well as a business one. And crucially, she adds, Sage does not see the process as parochial: “We see it as an opportunity to learn from other businesses. We don’t approach acquisitions as ‘this is the way we do things at Sage’. We get to know the teams, and think about how we can bring them together.”
But culture also means attending to the everyday, and Cusdin is proud of the three annual wellbeing days employees have been able to take since the pandemic. Leaders have shown the way in being vocal about the wellbeing days they are taking, just as they have championed development, with 40 per cent of vacancies now filled internally – by focusing on offering long-term careers and increasing the number of apprenticeships and graduate roles it offers, Sage hopes it can avoid the talent drain afflicting many of its British tech rivals. While nothing in this sector is guaranteed, this is a business doing everything in its power to still be standing, and still be on Tyneside, in another 40 years.