Monday May 16, 2011
“There's nothing quite like a McDonald's”....we've all heard the famous phrase but it seems this statement is more pertinent than ever in the context of how McDonald’s successfully engages, retains and develops it’s talent. It’s hard not to be impressed by the global franchise model which employees 85,000 people in the UK alone and has seriously bucked the trend in an industry where employee churn is notoriously high.
Through their robust, yet simplistic, approach to employee engagement and talent management; McDonald’s has achieved outstanding results. Their labour turnover (LTO) is a third of the industry average (currently low thirties; an all time low) and their people-centric attitude has resulted in a 7.5% increase in customer visits, and a 10% uplift in sales revenue. McDonald’s has got it right - ignoring the 'people stuff' really is foolish.
During the recent webinar “Unlocking the power of your people” delivered by McDonald's UK HR Director, Jez Langhorn, I was able to find out more about how McDonald’s achieved these results. Its approach is refreshingly simple yet very values and culture driven which benefits and inspires businesses of all shapes and sizes. Some of the key learning Jez shared:
- Successful employee engagement is about aligning what your people need with your business needs
- Finding out what your people need shouldn't be rocket science. McDonald's asked just two questions - What do you like most about working for us and what do you like least?
- From this an Employee Value Proposition (EVP) was created. McDonald's made sure that their approach was bottom up to ensure ownership and buy in.
Their EVP is:
- Family (feeling part of the team)
- Future (opportunities to progress and grow)
This EPV was aligned with what McDonald’s needed from its people– commitment, confidence and competence.
- Starting with recruitment, McDonald's, like learnpurple, hires for attitude and trains for skill (and from here onwards there is a huge emphasis on communication and delivering the EPV at every stage).
- McDonald's has created 'our lounge' – an intranet site for current and past employees to access a whole host of information 24/7. This includes: e-learning, their shift schedule (can request shift changes/swop with colleagues),company news and specially negotiated offers/discounts with selected companies such as Asda and Argos (all of which were negotiated based on employee opinion). This is a fantastic example of really listening to what your people want and acting on it. All too often organisations ask employees for their opinion but don't act on the feedback creating disengagement and distrust.
- McDonald's policy is to 'hire the smile'. Many of the individuals that they employ have few academic qualifications and may also have come from disadvantaged backgrounds. As such McDonald's has devised a learning and development culture which supports these specific needs (it's not 'one size fits all') and is aligned with national qualifications to give team members skills and qualifications they can use throughout their careers. For example, basic numeracy and literacy development modules are available through 'our lounge' and those that go through the McDonald's apprenticeship scheme achieve a qualification worth the equivalent of five A*- C level GCSEs. For those who wish to consider further study there’s the opportunity to work towards qualifications equivalent to A-Levels and a degree.
- This framework not only enables McDonald's to up-skill their people but it sends out a clear message that they value and want to invest in them. This has had a massive knock-on effect in terms of employee engagement levels, which in turn has boosted profits and lowered LTO. McDonald's has also received high levels of media interest including coverage in the BBC, Radio One and The Guardian all of which boosts brand perception.
- Employee confidence in working for McDonald's, and how this is perceived by others, is a big issue for McDonald's. 'McJob' is famously defined in the Oxford English Dictionary as “unstimulating, low paid [work] with few prospects”.
- In order to boost confidence levels, McDonald's launched a fun, engaging and employee focused set of initiatives including a series of “Not bad for a McJob” communications highlighting exactly what McDonald's offers its employees and a petition roadshow to change the understanding of McJob.
- These initiatives proved hugely successful not only in terms of employee engagement but in creating awareness of McDonald's as an employer of choice. Masses of social media coverage on YouTube, Facebook and Twitter and 50 plus articles in numerous red tops and broadsheets helped create a positive and well informed depiction of McDonald's as an employer and boosted applicant numbers in the process (they currently receive over 2000 applications per day- how many other service sector employers can say that!?).
Like many of our talent toolbox™ clients, they also understand that technology is a key enabler especially when dealing with Gen Y. 3/4 of McDonald’s workforce is under 21 and so apt use of digital communication which can be accessed anytime, anywhere has proved a vital part of motivating and engaging their workforce.
The significance of succession planning is not lost on McDonald’s either (having three Global CEOs in the space of three months highlighted this). The current Global CEO, Jim Skinner, has stressed that succession planning is a top priority; after all 1/3 of their franchisees started their McDonald’s journey working in the restaurants.
McDonald’s has built a multi-billion dollar business by putting people at the heart of their organisation and acting on feedback in a modern, timely and simplistic manner. They have implemented a simple people strategy which their employees can relate to and they understand the dividends it pays by treating your people as well (if not better) than your customers –proving that they are indeed a great place to work (which has been recognised by many accolades). It’s difficult not to be inspired by their (ongoing) story and all sectors can certainly learn something from McDonald’s because, as the stats prove, there really is “nothing quite like a McDonald’s”.