TalkTalk: Behind the cyber crisis

Written by
Karam Filfilan

21 Mar 2016

21 Mar 2016 • by Karam Filfilan

When Nigel Sullivan became TalkTalk’s group HR director in 2010, he joined a team in turmoil. The telecommunications giant had just bought out rival internet provider Tiscali, inheriting customer service problems that culminated in Ofcom issuing a £3 million fine to TalkTalk for incorrect billing of thousands of customers. Simultaneously, TalkTalk demerged from parent company Carphone Warehouse, becoming a plc in its own right.

Over the past six years, Sullivan has led a harmonisation programme to “create one TalkTalk”, simplifying 21 different employment contracts into three and implementing an HR data system that keeps employee information updated and accessible. He has made the organisation leaner and fitter, reducing employee numbers by half, while seeing the company’s value triple from £1 billion to £3 billion.

Innovating in talent retention has been key. Statistics showed that only 30% of promotions were made internally, so Sullivan asked TalkTalk’s recruitment process outsourcing provider to incentivise internal promotion and external hires equally – an unusual move “that has had a real impact”.

The net result of Sullivan’s hard work? A 20% growth in internal promotions, an 11% decrease in voluntary turnover, an engagement score that has improved by a third in three years, and a culture he describes as “good, but not great yet”.

Dealing with the TalkTalk hack

Despite these wins, it’s impossible to speak to Sullivan without addressing the elephant in the room. On 21 October 2015, TalkTalk’s website was hacked, and the personal details of 156,959 customers stolen. Of these, more than 15,000 customers had their bank account numbers and sort codes accessed. The hack was the third security breach the company had faced in under a year, and is estimated to have cost it £75 million.

“It was the most bizarre day as I was on a nine-hour flight to Seattle on business, so I didn’t find out until I landed. I felt personally quite hurt by it,” says Sullivan.

While his, and the company’s, immediate focus was on informing customers of the breach, Sullivan emphasised the importance of managing staff morale.

“We published daily updates from our CEO Dido Harding on our internal communications platform and spoke to colleagues in person to let them know what was happening. We ran four of our ‘We Talk’ sessions where senior managers held open discussions.

“About 10 days after the incident, our executive committee took to the road for face-to-face ‘town hall’ meetings with colleagues, which were invaluable in providing reassurance,” he adds.

Rebuilding external reputations

The hack has not undermined TalkTalk’s employer brand, Sullivan argues, and he remains focused on portraying the company as a “challenger brand, the EasyJet in airline terms”.

“Awareness of us has probably never been higher and the attack hasn’t limited our ability to recruit in any way,” he says. “However, our reputation as a business has been tarnished by poor customer service in the past. We’ve got ok customer service now, but we’re working on making it brilliant.

“No one questions Apple or Amazon about what it’s like to work for them as their brands are so good. If we had a better reputation externally, that would be the single biggest thing that would move the employer bit forward,” he insists.

Sullivan believes TalkTalk is a much more attractive place to work than it was in 2010. He cites plans to relocate TalkTalk’s northwest offices in Warrington and Irlam to a new campus in Salford’s MediaCityUK as evidence of the company’s evolution. Formerly a Colgate Palmolive factory, the renovated Soapworks office will house more than 1,300 TalkTalk employees, with a focus on creating a fun and frictionless working environment.

“I want TalkTalk to be thought of as the Google of the North,” says Sullivan excitedly. “I want people to think ‘this is the career choice for me’ over moving to London. The next generation in our industry wants their workplace to look different. We can’t replicate what the tech giants are doing, but we can do it our way.”

The power of good data

Sullivan is a believer in the importance of data in HR, with TalkTalk deploying the Workday system and partnering with coding experts Decoded, who provide specialist programming training to TalkTalk employees. Having trained as a scientist, he appreciates the clarity good data can lend strategic thinking.

“I’m a data-centric person, who was used to dealing with data, analysis and experiments. I’ve learned HR by osmosis, from experience. So I became an analogue person, using intuition and judgement to decide on talent,” he says.

Going through the Decoded programme and implementing data systems has allowed him to revert to his digital roots, using data to drive strategy.

“Tolerance of poor data, inadequate insight and cost is unforgivable. HR data systems now allow you to transform your service at a lower cost, creating the headroom to focus on strategic things,” says Sullivan.

This, he believes, can be a challenge for HR professionals brought up on the transactional side of the function.

“Something might seem intuitively right, but now I have data to back it up. That helps with strategy and board-level buy-in.”

And what has he learned from his experiences in the HR industry?

“Personal resilience is very important,” he smiles ruefully. “I’d also say HR professionals must be confident enough to lead agendas and add business value. Remember your job is to be the voice of your people, so treat your colleagues as customers.”