Lucie Mitchell talks to David Fairhurst, HR chief at McDonald’s, about his views on the importance of employee engagement and talent management during the current downturn.
David Fairhurst, senior vice president, chief people officer at McDonald’s Northern Europe, knows a thing or two about human resources. Recently voted as HR’s most influential practitioner - one of many accolades over the last few years - he has been responsible for a number of achievements at the fast food chain, including the development of a pan-European talent management programme and its highly successful training programme in which employees can be awarded nationally-recognised qualifications. Fairhurst is therefore extremely well placed to advise on HR’s role in the current recession, especially when it comes to employee engagement. "You do have to continue to engage with employees because they are going to be with you at the end of a recession and you have to maintain that engagement – so this needs to be thought through," remarks Fairhurst. "Think of engagement at its most simple level, which is creating a mutual value between the employer and staff - you do things for me and I do this for you. However, as we ride through the recession we have to re-focus on engaging employees and what we do to engage them will be different and will take some thinking about."
A different view on engagement
The question is, then, how will it be different? "Well, for example, is there more financial support that you need to give your employers during this time? Do you need to be more paternal, making sure they don’t dip out of pension schemes and that they themselves become too short-term in their outlook? We have to think about all these sorts of things, but the principle is that you have to keep engaging," he advises. Equally, HR must also think about the employees that are being 'disengaged' from the organisation, and must ensure it is done in such a way that is perceived to be fair and compassionate by others, he says. "But there is one challenge I put out there for HR directors - when you look back at the end of this recession, will you be a case study of role model behaviour, values and best practice as an organisation? Will people say, 'remember what that business did'?" This challenge comes back to what Fairhurst dubs as a 'new way' of doing things, in terms of engagement. "We must not take our eye off this continual experimentation and delivering the results," he comments. However, he warns there is a danger that employers can become short-sighted in the current downturn. "It’s too easy to stop doing all these things like engagement, creativity, and experimentation, and go right to the other end and say, now is the time to make sure that people have a desk and you don’t bark at them - that’s very short sighted. If the profession as a whole can really hold together and focus and help them keep their nerve and remain creative in difficult times, then I think some good can be done in times of recession."
Another thing that can come under stress during a recession is talent management. Fairhurst points out that there are all types of misconceptions about talent management at the moment, yet talent needs managing, no matter what the market conditions are, he emphasises. "Organisations that are proactively managed as opposed to 'let happen' are the ones that have been more successful, and it’s no surprise, if you look at the top priorities from all the research coming out from Harvard and places like that, the key issues are reputation, and the CEO’s credibility, and talent has gone right to the top of the CEO’s agenda as they have figured out that organisations are about talent and how you manage that talent." Fairhurst adds that talent is an organisational resource that needs to be managed in a way that suits the current and future needs of the organisation’s strategy, regardless of the economic climate. "Of course, the fact that we are talking about the lives and livelihoods of individuals here makes this a particularly difficult management challenge – but that is the HR challenge for the 21st century and we have to rise to it." HR departments also need to think about their strategic initiatives within the organisation, and must not just view talent management as another term for 'succession planning'. "Strategic talent management these days is all about projecting the operational income of an organisation – where the business is going to make money, what the talent implications and the gaps are from that, how things need to evolve and where you are going to get it from," he says. So, it is not just about "bums on seats" anymore, comments Fairhurst, and who fills what job, it is about keeping up with the fast-moving changing skill set - which leads him on to the subject of the war for talent. "Some have said the war for talent has eased, but this is misleading as talent supply is dictated by the rate of change in business and the economy – change has never been faster so the war for talent is as alive as it has ever been," he remarks.
What is McDonalds' secret?
So how does Fairhurst himself ensure staff morale, engagement and productivity levels stay buoyant at McDonald’s, during the downturn? "First and foremost, McDonald’s is one of the organisations that has enjoyed positive growth during the current downturn and there are strong business reasons for this. At the same time, we have continued forward momentum with initiatives such as apprenticeships, degrees and LEPs. Maintaining this momentum at a time when it might be argued we could 'take our foot off the gas' has undoubtedly enhanced morale, motivation and productivity levels." And for HR in general, Fairhurst states that the current recession is the ideal time for HR to step up to the challenge. "HR has for years wanted the top table position, and if ever there was a time to show what values can be created at the top table, it is now. I like the old joke that leadership is like a teabag - you only know how good it is when it’s in hot water. It’s the same with HR – you only know how good your HR function is when they show how they adapt and how they maintain focus in the toughest times, and now’s the time to step up to the function." Fairhurst's top tips: What should HR focus on during a recession?
- Doing what is right for the business - short and long term
- Engage those who will ride out the recession with you to ensure they are aligned with what the organisation needs to achieve
- Treat those who may have to leave the organisation with compassion and fairness
- If we are judged in hindsight to have done the right things for our organisation, in the right way for our people, we will have done ourselves and our profession an enormous amount of good