Jan Hills tells how at Marks & Spencer the HR team is working hard to ensure the company maintains its employer of choice status as the UK comes out of the recession.
Marks & Spencer has always been seen as the barometer for the UK economy and the retail sector. We talked to Joan Claridge, head of retail HR, about how M&S has tackled this recession in a very different way from the past thanks to the transformation of HR into a true business partner.
Joan told us that in the past, HR had been very responsive in tough economic times – exceptionally good at dealing with a crisis and implementing strategies that involve cost cutting on benefits, training and headcount reductions. The business has always relied on HR to play their part during tough times and, as usual, HR has proactively stepped up to the plate this time. However, what has been different is the recognition that short-term reactions to past economic difficulties have often had a long-term impact on the business. The impact only comes to light when the upturn is underway and normally shows itself as a depleted talent pool. A lack of engagement and development results in individuals leaving once the job market picks up and the lack of investment in graduate recruitment, training and development and succession planning during the recession leads to a poor pipeline of talented people coming through the business. It can also result in an erosion of the connection between the company and employees; employees that are known for their passion and dedication. These issues impact the customer experience and hence the bottom line of the business.
"This time we decided to tackle the recession differently," states Joan who took over as head of retail HR in January 2009. "Whilst we have faced the challenge of cost cutting through changes to benefits and a reduction in the number of stores, internally we have been keeping an eye on the long term. We were able to do this because of the transformation of HR over the last 15 months. HR now has a new structure, made up of administrative centres; centres of expertise in employee relations, recruitment and training; and a group of HR business partners embedded in the business, closely supporting our regional and store managers. When the recession hit we had already got our house in order," says Joan. "We had streamlined our structure and taken out cost. We were aligned to the retail business plan and had invested in giving our HR business partners some training in how they could work to have more of a strategic impact in the business," says Joan.
Throughout the recession M&S focused as much on the long term as it did on responding to the need to reduce costs. In particular it continued to train and develop its people. The retail training function focused on developing the skills that would make the biggest difference in both the short and long term. It sought to ensure all people managers had the skills to engage their people and manage performance effectively. During 2009 M&S spent more on leadership and management training than previous years. It recognised that you need the best leaders and managers to get you through and out of the recession.
This focus on people management, alongside the incredibly successful work of the People Policy Specialist Service, to advise and support the line on how to apply people policy, has enabled business partners to direct their efforts on improving the performance of individual managers. Business partners are using data on the number and type of employee relations cases arising in their regions to take effective action. An example would be providing targeted training or coaching for store managers experiencing complex employee relations issues.
Business partners have also been focused on the talent agenda. They have been working with line managers to identify future talent and develop plans for these individuals to ensure they are receiving stretch assignments and understand the growth and career opportunities Marks & Spencer can offer them. This work includes planning cover and succession paths.
Alongside this work, HR has been focusing on employee engagement and M&S’s employer brand. This has included carrying out specific surveys to assess issues and gain a feel for the levels of motivation amongst the workforce, helping managers to take action where necessary. Joan says: "We are sharpening our employer brand both inside and out, to ensure that as we come out of recession we have both a committed, motivated work force and that our external image is attractive for future recruits. It is important that we live up to our external promise.
"The other area Orion helped us to focus on was measurement," says Joan. "We now have in place some fairly sophisticated measures that not only track our HR KPIs but also track important indicators of the health of the business and give us real-time data on where HR needs to focus, to ensure strategy implementation is getting results. Our measures also cover those associated with how HR is aligning with the retail business plan. We also track how we are working across the function and against the promises we have made to the business on the quality of service agreed as part of the HR transformation.
"So the recession has meant a difficult trading environment but it has also given us the opportunity to transform the HR contribution to the business from supporters to leaders," says Joan. "There is no doubt that the actions taken have contributed positively to the business results and will ensure M&S moves out of this downturn with a stronger, more effective line management team working alongside a proactive business-focussed HR function."
Jan Hills is a partner at Orion Partners