THE ANCHOR HOMES

This case study focuses on Anchor Homes, the care home division of Anchor Trust,
a not for-profit organisation, which has been England’s largest provider of housing
and residential care for older people. From modest beginning in the late 1960s,
Anchor’s workforce grew to over 9,000 staff by 2018, with the majority of employees
working in care homes. At the time of the research interview for this case study,
Anchor Trust had just merged with Hanover Housing Association to form a new
organisation – Anchor Hanover. Hanover, like Anchor, developed in the 1960s and
has provided rented and leasehold retirement housing. Anchor Hanover, the new
organisation, is now the largest provider of specialist housing and care for people in
later life in England, with more than 54,000 homes across 1,700 locations. It is
operating in more than 90 per cent of council areas in England.
The case study interview was with Jane Ashcroft, formerly CEO of Anchor Trust and
now in the same role with Anchor Hanover. Jane came into general management
from a career in HR, which has no doubt influenced the high degree of integration
between organisational leadership and human resource management she has led in
Anchor. We can see this integration in this case study, both in HR strategy and its
implementation, from top team level down to local decision-making.
Even without this personal interest in HR, as she told us, employment issues are
inescapably central to delivering high quality care in residential homes.
‘The sector is so people focused – our customers live with us, so the
workforce is above and beyond critical.’
But the sector also operates under heavy financial pressures, as we have seen in
recent years from the re-structuring or even disappearance of some well-known
providers of care homes. About half of Anchor’s income comes from public money,
mostly from local authorities who have been struggling financially in recent times.
Those funding their own care also have limited funds. About 60 per cent of income is
spent on staff, so like all other care home providers, Anchor needs to keep staff
costs under tight control. Managing the tensions between quality of care, staffing
levels and salary levels lies at the very heart of running residential homes. We see
this balance below in the key elements of Anchor’s business and employment
strategy.
The merger will bring opportunities to provide new types of services and economies
of scale. As a major player, Anchor Hanover hopes to have a strong voice with
central and local government. Working through the merger will also present
challenges. The culture, workforce requirements, employment practices and
regulatory systems in housing associations have some significant differences from
those in residential care.
The HR strategy and process
Prior to the merger, Anchor was towards the end of its current five-year business
strategy. Rather than having a separate, written HR strategy, which is deliberately
avoided, people issues are fully embedded in the main strands of the business plan,
as described in the next section below. HR strategy is therefore, in effect, driven by
the whole leadership team. This integrated approach to business and employment
strategy ‘creates an ownership of the people issues in the top team’, according to
Jane Ashcroft. The whole management population is involved in the people
approach and people strategy, so ‘everybody owns and has an opinion about your
staff.’
The big advantage of this approach is that it keeps the workforce ‘front and centre’ of
everyone’s thinking. But it can be quite challenging for the HR function. Senior HR
people need to see this broad and deep involvement of the management population
in HR matters as a positive. Managers do not expect to have to ‘find a way round the
HR culture.’
HR needs to be genuinely close to the business and to understand it commercially,
not just in HR professional terms. And the business needs to be genuinely people-
focused in its strategy, investing in employees in this low paying, low margin sector
for the long-term returns delivered by the high quality care they provide. The term
‘sustainability’ is used to talk about the importance of profit in ensuring the future
success and survival of the organisation. The key strategic message is that with
around 60 per cent of income spent on staff, it is essential to spend this money well.
The not for profit status of the organisation does not mean that decisions on
expenditure can be less robust than the ‘commercial’ operators against which
Anchor is competing.
To give just a few examples of how HR has been contributing to profitability:
■ Using the opportunities presented by the apprenticeship levy to fund essential
training and build new internal career pipelines, HR is generating income not just
being a function which creates costs.
■ In reviewing and understanding the business implications of the Living Wage for
the organisation, HR examined the likely positive impact on staff retention and so
helped managers to see this immediate cost issue in relation to wider business
metrics and future benefits. The staff turnover and agency usage in Anchor are lower
than sector comparators based on the reward approach.
■ HR has used both attitudinal data and business metrics data to ‘flush out’ those
middle managers who were not managing staff well, and so not retaining them. HR
had to be quite ‘hard-edged’, we heard, to refresh the middle management
population with more effective people managers as the care home operation has
grown.
■ In some locations Anchor found it was providing high quality care at lower prices
than its competitors, and that these prices could not sustain appropriate staffing
levels and rates of pay. In such cases, HR data has supported the renegotiation of
charges to local authorities – again engaging with business income not just
expenditure.
As these examples illustrate, both HRM strategy and specific decisions on people
issues are approached from a business perspective and with a problem-solving
mentality. So, strategic HRM is much more about employment issues and choices
than it is about HRM procedures and processes. HR also works closely with the
finance function to generate the kind of evidence needed to support this approach to
decision-making. HR has to think from the business perspective and not just argue
for HR best or typical practice. But in return the business and its managers are
committed to delivering high quality care by investing in and listening to the staff who
provide it. The organisation uses metrics on a continuous basis to track progress, for
example there are monthly people metrics used across the care business in Anchor.
There is also an annual people review. This includes data by business division on
workforce demographics, working hours, salaries and gender pay gap, staff
engagement scores (benchmarked against care and housing sectors), employee
relations cases, vacancies, training compliance and qualification levels in care
homes, and staff voluntary turnover. Staff are very aware of financial constraints and
do not like to see money being wasted on staff benefits if it is not something they will
really value. So Anchor consults with staff about what they really want. This is done
through a variety of channels which include a Staff Council structure. A regular
colleague engagement survey (‘Your Say’) has achieved high response rates which
enable detailed analysis of the factors driving retention and commitment.

The HR strategy and content

The Anchor strategic business plan has had four main themes or ‘planks’:
■ Best customer service: customers are absolutely central to Anchor’s business and
operating model. This theme also emphasises investment, the need for quick and
easy procedures and empowering local managers.
■ Best place to work: the employee experience is often ‘the first thing we talk about
in the leadership team’, according to Jane Ashcroft, because it drives customer
satisfaction. Being a great place to work means valuing staff, and offering them
training, career opportunities and appropriate rewards. This theme also emphasises
communication and the removal of unnecessary bureaucracy.
■ Best run company: this is really about efficiency, which is a huge driver of success
in this financially constrained sector. It also emphasises continuous improvement,
local decision-making and the bringing together of teams across internal
organisational boundaries, for example between functions.
■ Growth: which brings greater influence and the potential to develop new services
and operate with greater efficiency. The recent merger obviously also brings new
kinds of opportunities for growth.
The HR management and employment strategy is woven through this business plan,
which determines the areas of HR that need attention. The HR function has priorities
stemming directly from the business plan. In the pre-merger period these have
included supporting greater organisational efficiency, enabling a performance-
focused culture, ensuring a compelling yet affordable employee value proposition
and improving people data and analytics. In each of these priority areas, HR has
worked on specific items. So, the lesson is not to try and prioritise everything at the
same time. For example, within the sphere of culture change, a small number of
specific aspects of culture have been given extra support by HR, based on business
needs and staff feedback from employee attitude surveys. In such an operational
and highly regulated business, it is easy for the HR function and management
generally to become over-controlling and to use standardised processes to avoid
risk. It is clearly important both for costs and for care quality to have strong controls,
but Anchor has also sought to treat staff as individuals and not to be too rules-based.
‘Aligning how we treat staff with how we treat our customers is a key theme,’ Jane
Ashcroft told us. Personal accountability is a core value and signals that staff are
expected to use their own judgement. With regulation getting sharper all the time, it
is important not to ‘run scared’ but to be more open when mistakes are made. The
example set by the Chief Executive and senior leaders is clearly critical to putting
this value of openness into practice. Reward is a central and challenging issue for
any organisation in a low pay sector seeking to attract, retain and engage good
quality staff, and the decisions not to differentiate on age and to pay above the
National Living Wage for all roles reflected the business understanding of this. The
Living Wage, in addition to significantly increasing wage costs, was in danger of
eroding internal differentials, especially for those in crucial and demanding Team
Leader roles. The organisation decided to maintain appropriate internal differentials,
to reflect differences in job size and provide an effective promotion ladder. It funded
these additional costs by saving money elsewhere, including in the HR function.
Although pay is very important to staff, non-financial benefits and recognition of good
performance are important too. These include career development, listening to the
opinions of staff and developing wellbeing and support tools for staff and their
managers. In recruitment, the organisation is seeking to attract a more diverse
workforce, especially more young people and more men, by reaching out through
different recruitment channels and changing the rather stereotyped visual images of
staff, customers and what working in residential care involves.
Implementation and delivery in practice
With a large number of front line and unit managers, spread across so many work
locations, implementing this approach to business and employment strategy requires
careful consideration of how the HR function can best support local managers in
delivering on the business plan. Guidance and tools for managers are a cost-
effective way of providing professional HR support, whilst giving managers the
necessary discretion to operate effectively at local level. The HR function has re-
thought how it offers personalised support, which Jane Ashcroft described to us as
‘stripping out cost without stripping out value.’ HR previously operated with a fairly
traditional HR face-to-face control and support model. But now HR staff visits to care
homes have largely been replaced by an HR telephone helpline for managers. It is
important for the function to listen to managers in order to understand the issues
they need support with and then to provide effective information and advice.
Employee engagement is central to business performance, but many types of typical
engagement interventions do not work easily in a 24/7 service business where most
staff are not office based. HR staff need to keep close to the business by, for
example, working a couple of days a year close to front line staff and making sure
they talk to night staff as well as those who work in the daytime. Bringing flexible
technology, including the use of social media, into HR activities is part of delivering
HR services in ways more convenient to users. ‘People choose care homes online
and that is also the way people now shop for jobs. We are being proactive with social
media and trying to be agile in our communications. The people who work for us live
in the real world. They need to do their work the way they book their holidays or do
their shopping.’ So the organisation is using technology to be transparent and easy
to access, while seriously addressing potential concerns over security and
confidentiality of information. An internal social media tool called Workplace has
been introduced to facilitate communication with the workforce. It is used to share
what is going on, and for staff to put forward ideas and give feedback. This more
immediate and transparent communication generates debate and can help to break
through disagreements which have, in the past, sometimes slowed down progress
and involved lengthy formal negotiations. Open communication is an important
aspect of the culture which Anchor has been seeking to develop. Executive Board
members broadcast live to the workforce and respond to questions on a regular
basis. Communication during the merger has been a challenge, for example as a
degree of confidentially was needed to protect individuals during the appointment
process to roles in the new organisation. But now the formal merger has taken place,
Jane Ashcroft envisages open communication and staff involvement accelerating to
get staff from all locations playing their part in how the newly merged organisation
will operate. HR works closely with the Communications function and, indeed, across
all the corporate functions.
The Future
It is the dynamic of the care operation in Anchor which has driven the nature of its
employment strategy to date and the depth of involvement of leaders at every level
with people issues. There is no distinct HRM strategy because it is fully integrated
into the business strategy. Post-merger, it will be interesting to see how previous
differences and similarities play out in the new organisation, with its adjusted
emphasis on housing alongside residential care. A new colleague council will be part
of how the Board can continue to listen to the voices of both customers and
colleagues, operating regionally and by service as well as centrally. According to the
chief executive, people need to ‘see the trail’ of how decisions have been reached.
Summary and conclusions
Anchor has placed its HRM strategy and approach to people management at the
centre of its business approach. The CEO offered these suggestions to others
pursuing this same goal:
■ ‘Make sure the people agenda is not seen as a specialist agenda, worked on in a
darkened room by HR professionals.’
■ ‘Focus on the priorities and challenges from both a customer and workforce
perspective.’
Commonly identified pitfalls of strategic HRM in the research literature include too
weak a consideration of the employee perspective and an over-emphasis on HR
procedures at the expense of a focus on real employment issues. This case shows
how these pitfalls may be avoided if business strategies and plans more fully include
people issues. However, this is not an easy ride for the HR function, which has to be
much closer to business and also prepared for managers to say what they want from
HR. An organisation seeking to engage its workforce through a transparent
leadership style also has to think carefully about how it communicates and listens to
its staff and how to balance necessary control with giving people the chance to feel
like individuals, use their initiative and take responsibility for their work.
A Final Word
‘Have a Board that understands the people agenda as well as they understand
finance. Make sure that the Board scrutinises progress, not just setting direction and
agreeing procedures.’
- Jane Ashcroft, Chief Executive Anchor Homes
Please analyse the case from different perspective and answer all the questions with
elaborate reasoning.
1. Do you agree with the strategy of Jane? if so why, If not why not?

2. Don’t you think replacing traditional model of face to face support with HR
helpline through telephone, is tantamount to not only stripping cost, but also
stripping value?

3. Considering four planks of Anchor Business plan, can you come with HR
strategy which if quite different from what has been implemented?

4. Does the Merger provide new opportunities for HR to dovetail with Business
strategy? If so How