Thursday July 27, 2017
Most businesses are familiar with the term ‘customer-centricity’; placing customers, their needs and desires at the centre of business strategy. People-centricity, also known as employee-centricity, however, is less well known. Coined in the last decade, it focuses on creating a business environment where your people are placed at the heart. Where the employer focuses on the engagement, satisfaction, development, happiness and wellbeing of the workforce so that the customer reaps the benefits.
Various studies have found that creating a people-centric organisation has a direct and tangible impact upon the success of the business. Boosted profits, improved productivity and greater investment opportunities are just some of the recorded results.
The business case, therefore, is clear. But where do you start? Here we seek inspiration from some of the most people-centric organisations in the UK to understand how they’ve done it:
Valor Hospitality Europe
Valor Hospitality Europe is a UK-based hotel management company with operational responsibility for a number of brands including Hilton, Crowne Plaza, Holiday Inn, Best Western and Ramada.
As a relatively new company to the UK, the business has ambitious growth plans; aiming to increase the number of hotels it is responsible for from 17 to 50 within five years. To achieve this, the executive team recognised it needed to bring together the brands and place a real focus on becoming a people-centric organisation.
As Valor had identified clear challenges in regards to leadership development, employee engagement, harnessing talent and internal communications, it went back to basics with its people approach. First port of call was the creation and embedding of clear values which sit above the individual brands. This was supported by the implementation of Purple Cubed's digital platform, Talent Toolbox™, a communications hub to provide employees with transparency of the business; updated daily with news, financial information and employee stories. To tap into available talent, who would be instrumental in achieving growth ambitions, the business also uses Talent Toolbox’s talent management module, providing employees with the ability to drive and track their own career progress.
Despite the new approach to people being in place just over a year, the business has already experienced significant outputs:
• Increased sales by 10 per cent and EBITDA by 20 per cent
• Secured an additional £4m investment due to improved confidence in the business
• Reduced labour turnover to 25 per cent
• Internal promotions up 267 per cent - a significant reduction in recruitment costs
• Increased employee engagement to the 80th percentile
• Named Best Employer in the UK hospitality industry – judged on employee feedback and engagement scores – in their first year of entering; competing against established hospitality brands such as Firmdale Hotels, Virgin Limited Edition (Babylon and The Roof Gardens) and Marriott’s London Edition hotel.
Pret A Manger
Pret is one of the leading fast food retailers across the globe; priding itself on creating handmade, natural food which avoids all the ‘obscure extras common to so much of the prepared and fast food market’. Established in 1986, it has experienced rapid growth with over 450 shops worldwide and just under 11,000 employees. In 2015, the company posted revenues of £676.2m and an EBITDA of £84.3m.
The company’s main focus is on market expansion. In order to achieve this the business is committed to building and maintaining a happy workforce.
In order to better support this people-centric environment, the business restructured its HR team in 2014. It was agreed that London would become the “mothership” for HR, with localised support in each country as opposed to self-sufficient HR within each operating country.
This move led to greater empowerment of team members. Shop leaders are encouraged to focus on ‘family trees’ to ensure that the right people are recruited into the right roles, rather than growing profit and sales. And the business was one of the first to adopt peer recruitment.
Pret is also famous for its stance against external marketing, with only activity carried out inside of the store. Instead, they spend their ‘marketing budget’ on culture and rewarding their people for their natural serving styles. This approach has paid off, with an average 85% of stores achieving a perfect 10 in mystery dining scores each week.
From a single visit to a Pret shop, it’s obvious that this business is passionate about and respects its employees. And while happiness cannot be bought, and Pret certainly does not attempt to, each store is given a budget for socials and a huge variety of rewards. When an individual is promoted, they also receive £200 worth of vouchers. Though interestingly these are not for the individual to spend, but to give them to those who they felt helped them the most in their training. A statement in itself.
• Group sales up 13.9 per cent in 2015
• EBITDA up 14.5 per cent in 2015
• Three new shops opened in 2015 and 763 new jobs created
• Over three million food items donated to charities
Established in 1948 and with more than 10,000 employees, River Island is a family-run global retail powerhouse; set up by the incumbent chairman who started out selling fruit, vegetables and knitting wool from a bomb site in the East End of London. This entrepreneurial spirit remains strong within the business; with the current HR Director, Karen Beaven, telling HR Magazine in 2015 that she believes this attitude provides a “certain level of energy and commitment.” It also means that despite owning over 350 stores, there are very few policies and processes in place; enabling the business to move quickly.
Though, despite this, when Beaven joined the organisation, HR was transactionally focused; with little credibility to push things forward or create real buy-in from the leadership team. Her first move was a significant transformation programme for the HR function to support the creation of a more people-centric organisation. Initially she changed the HR structure to a business partner model and put in core HR functions, such as reward and a hybrid outsource model for recruitment. The team also embedded a new L&D Academy, with core management skills courses endorsed by the Institute of Leadership and Management.
Once these basics were in place, the focus switched to commerciality – how could HR better support the commercial performance of the business? Here, Beaven and her team used the insights of their people to develop a new commercial venture, the Style Studio, which launched to great success in 2014 and is currently being rolled-out across stores in flagship cities.
The hybrid outsource model for recruitment has saved more than £300,000 to date
• Pre-tax profits rose 64.4 per cent in 2015
• Turnover increased 10.4 per cent to £925.8m
• Reduced cost per hire from £126 to £94