HR Summit: generational diversity adds to challenging times for retailers
Here Glynn Davis gives a round-up of the discussion at Retail Bulletin’s HR Summit held on 8 October.
With four generations working in many retailers the situation where older employees are managing digital native Gen Z’s and millennials is proving particularly challenging at a time when retail is undergoing a digitally-led transformation.
Speaking at the conference, Emily Lofting-Kisakye, HR director at Urban Outfitters Europe, told a packed room of delegates: “It’s a multi-generational workforce with four generations so in the same office you’ve baby boomers who are telling millennials [and Gen Z’s] what to do and this can be quite challenging.”
The issues are manifold and include: the differing values across the generations; the difference in preferred styles of communication; and the differences in how the older generations have grown in the business compared with how the new generations want to grow as they progress.
Recognising the skills gap
Against this difficult backdrop Lofting-Kisakye questions whether CEOs and the HR function have an understanding of the skills gap across organisations. Leaders talking to other leaders, who don’t understand the issues, is perpetuating the problem and leading to the question of how this fits in with Learning and Development today – from initiating mentoring and partnering rather than sticking with traditional classroom training.
At Urban Outfitters she says: “We try to be thought leaders in this. We have listening groups and we feed this back into the leadership. There will then be a trickle down.” From this listening the company has found that younger people do not necessarily want to be promoted up in business but often prefer to move laterally. “We have to work out how a person can go sideways and still be involved in other projects. Maybe we need to change management roles,” she says.
Transforming HR function
Such considerations highlight how the HR function is having to be transformed in order to adapt to the seismic changes that are taking place in the wider retail industry. This certainly chimes with the activities being undertaken by Sue Yell, HR director at Warburtons, who says: “While we are transforming the business we need to transform ourselves. We need to use technology to free us up to do more value-added activities.”
Matthew Brooks, head of HR solutions at Experian, agrees that the solution is for companies to bring HR and data [technology] together: “Organisations that use people analytics are more successful. But only 52% use data to impact the people problems within their businesses. Insight enables HR to sit more prominently in a business.”
Technology in general is having huge implications on organisations and Brooks reckons this will lead to a global talent deficit of 85 million workers by 2030, which clearly means retailers need to start addressing how they overcome this problem. But progress has not been particularly impressive, he suggests: “Lots of trends are leading to a connected world and what does this mean for the workforce? Only 37% of organisations understand the skills gap.”
Changing times present challenges
Helen Dickinson, CEO of the BRC, recognises the problem but suggests it can be tough for companies to adapt to the changes happening because things are moving so fast. She points to the fact that as many as 100,000 employees in the retail sector today are doing jobs that did not exist five years ago.
“This raises big questions about the skills needed in the future because of the rate of change in the industry. As many as 58% of people in retail believe the industry has a poor image. To attract people into the industry what we need to think about is upgrading the skills of people for the future in what will be a more difficult environment,” she says.
As well as addressing the skills gap retailers also need to adapt to the new demands of younger employees around the environment and sustainability. Sarah Eglin, head of people partnering – retail support & loyalty at The Co-operative, says that as many as 50% of millennials would take a pay cut to join a purpose-driven business: “The role of leaders is to create a purpose. When they connect this purpose down to colleagues then they are more than 700% engaged. It’s a no-brainer. For many baby boomers this is not understood.”
Finding your purpose
When the Co-operative almost collapsed it rediscovered its global purpose for championing climate change and sustainable practices, which Eglin says is “part of our DNA”, and this is helping the company today as “people want to be part of it because we are more than just a business [making money]”.
Kathryn Porter, director of youth strategy for EMEA at Hilton, agrees that companies need a purpose-driven strategy – especially within the hospitality industry that attracts a lot of younger people. At Hilton 33% of new entrants are under 19-years-old and 67% are under 24-years-old and its purpose strategy is to “redefine sustainable travel”.
Having a purpose-driven strategy is certainly a key way of engendering engagement with the employee base, which is proving increasingly important to the success of businesses, especially retailers.
This has been recognised by Nikki Remmer, head of reputation & culture at McDonald’s UK, who says the company had undertaken major physical changes to its restaurants and diversified its menus but there had not been any similar major focus on improving the service levels and creating better human engagement.
Boosting employee engagement
“In 2016 our people team studied the restaurants and found our processes and training systems were world class. But we also found that organisations with great service do not just rely on training. It’s about having a great employee experience. We often recruit from the Four Seasons, and we pay the same. They have the golden rule of ‘Treat others like you want to be treated yourself,” she explains.
This led to the creation of the ‘Big Conversation’ with The Innovation Beehive that encourages a culture in the restaurants where colleagues are aware of how actions impact on themselves as well as on customers. A programme was implemented to engage with front-line employees and to create coaching sessions for the management teams as well as instilling a leader-led approach for business managers.
The initiative has driven lower employee turnover, a 25% improvement in manager satisfaction, a 6% uplift in customer satisfaction, and 5% increase in sales. Remmer says one of the key learnings has been that it is clear from the metrics that employee experience directly impacts on the customer experience.
High cost of high turnover
It also has a dramatic effect on sales and profits. Jo Tyler, employee engagement manager at Whitbread, who says falling employee engagement at Premier Inn correlated directly with falling guest net loyalty. This was partly down to a high turnover of hotel managers and using data and insight the company found this falling team retention resulted in as much as £5 million being lost each month.
“This gave the HR team something to corral around. All HR had to get behind team retention. We recognised we needed to prioritise our people getting the basics right and manager capability and stability is key. Over the last six months we’ve really turned things around,” she explains.
Such proactive action is indicative of what is needed in today’s transformative times, which are certainly proving challenging. But herein also lies the opportunity, according to Vickie Gooch, HR director for food at Sainsbury’s, who says that in the current frenetic time there has “not been a better time to be in HR if you want to have an impact on business”.
