Having been voted Britain’s lowest-cost supermarket in each of the past 11 years, it is no surprise that Asda is attracting more cost-conscious customers. “We’ve seen a million new customers over the past 12 months, and we’re anticipating another 1.5 million over the course of this year,” says people director Caroline Massingham.
Much of the extra work in existing stores has been taken on by staff working longer hours, she says, but the company has also announced plans to create an extra 7,000 jobs across nine new stores, 15 store extensions, and five new Living department stores. Each new store opening can generate up to 5,000 job applications.
The HR team plays a central role in creating the company culture that ultimately results in high levels of customer service, according to Massingham. “Our morale index says 96% of people say they love working at Asda,” she says.
“We’re a very simple HR organisation and we only ever focus on four things: getting the right people, training them to deliver the job as best they can, motivating them to be real advocates of the business, and then retaining them, because that offers real consistency to the customer.”
But as the recession worsens, Massingham expects to have to fight to retain some of the staff benefits that have helped to motivate and reward employees. “My role is actually to champion some of the people issues harder, to avoid people assuming that it’s right to stop investment in training, or hold back on recognition this year,” she says.
“When everyone was turning recognition off at Christmas, we increased investment from £15m to £16m and added in further double discounts for colleagues, because the performance was good, and we wanted to recognise that.”
City Car Club
The economic climate has played into the hands of City Car Club, which offers low-cost, hourly car rental in cities and towns across the UK.
“We’re doing well because we’re in the business of saving people money,” says James Finlayson, chief executive. “Owning a car is probably the largest expense anyone has outside a mortgage or rent, so people can save well over £1,000 a year with a car club if they’re not a heavy user.”
The business increased its headcount by around 20% in 2008 as membership grew by 80%, but Finlayson has no plans to recruit more staff just yet, despite expecting another year of growth.
“The combination of being able to save money, the environmental benefits, and the fact that we’re actually more convenient than owning a car means we’d expect growth to continue,” he says. “We hope to continue to grow in years to come because we’re in a new and fast-moving sector.”
But despite the advantages the current climate brings for the business, there could also be downsides. “We are still reliant on further funding before we can go into profitability, so the next hurdle we’ll come across from a business point of view is the credit crunch,” says Finlayson. “We have to raise one more sum of money, and that will be a challenge.”
And while the number of converts to the idea of car clubs is on the up, people are cutting back on how much they actually use the cars.
“Overall utilisation of the cars is slightly lower than we would have expected this time last year because, for the first time, people are able to see what the cost of each journey is,” he adds.
“If people want to save £20 and jump on the bus instead, then that’s an easy way to save money.”
While the recession has been bad news for restaurants, many people are now choosing to stay in and order pizza, according to Jane Roberts, head of HR at Domino’s Pizza.
Other possible reasons she suggests for the company’s current success – profits at the pizza firm in the UK and Irish Republic rose 24.7% in 2008 to £23.4m, with like-for-like sales up 10% – include the attraction of pizza as a comfort food, and the growth in the number of people living on their own.
The franchise chain sets itself a target of 50 new stores a year, which remains the target despite the recession, but the business has experienced much greater demand from potential franchisees.
“People are looking for alternative ways of working now,” says Roberts. “Sometimes in redundancy situations it’s time to take stock and see what else is out there, and have some control over the future. With franchising, although you’re buying a brand, you have got that ability.”
The business has also seen a large increase in job applications for both head office and store positions, although at a corporate level, only the operational support and product warehouse and distribution teams have expanded as a result of the recession. “We’ve done a great job in resourcing, and our job going forward is to make sure that we retain and motivate those people and keep them engaged,” says Roberts.
HR is now working to build closer relationships with individual franchisees, says Roberts, by encouraging them to use the company website to recruit staff.
“It’s difficult for them to deal with the volume of calls that are coming in at a local level,” she says. “But we don’t want to lose people and have them become frustrated, so we’re looking at a process to be able to work with those applications.
“We’d also like to spend more time – which we’re able to do now – helping franchises develop their skills and their managers’ skills in terms of managing people and dealing with issues as they arise,” Roberts adds.
Scottish care company HRM Homecare has benefited from the economic downturn by being able to address its biggest issue: the recruitment of quality employees.
“We were finding it challenging to recruit the right types of people for the roles that we have,” says Karen Farquhar, senior HR manager. “But the downturn means people have to look at sectors that they perhaps wouldn’t have thought about before.”
The business has so far taken on 50 additional staff in the past year, and has already won two contracts that it wouldn’t have been able to bid for with its previous numbers, with a further three possibilities in the pipeline.
Such expansion, though, brings challenges for the HR function. “When undertaking a rapid recruitment drive, you don’t want to have an adverse impact on the quality of the people you’re bringing on board,” says Farquhar. “Having stringent and robust recruitment policies and procedures is vital.
“A number of the people joining the sector now have had no previous experience, so we’ve had to devise a whole new programme that takes people right down to the basics.”
Going forward, staff retention – particularly of the management population – will be high on Farquhar’s agenda. “We have to look at different employee engagement initiatives and ensure the staff we bring on board feel they receive the support and training they need,” she says.
“We’re keen to offer any opportunity for promotion internally before we look for an external candidate, because the quality of people we’ve recruited means we now have those skills and are looking to develop them even further.”
For budget retailer Poundland, the recession has accelerated a period of growth that saw like-for-like sales improve over the past two years on the back of a programme of investment in stores and staff training.
“If you looked at a Poundland a couple of years ago, it might have fitted the stereotypical pound shop or value retailer image,” admits Sonia Sharples, head of HR. “But now it looks like any other blue-chip retailer, and people aren’t embarrassed to go in. The economic climate has played into our hands but, luckily, we’d done a lot of groundwork before the climate changed so dramatically.”
The retailer opened 37 new stores in 2008 and plans to open a further 30 this year, with each store hiring an average of 30 new members of staff.
The state of the economy has resulted in an increase in staff at all levels enquiring about jobs, reports Sharples. “We’re now able to recruit directly about 95% of colleagues coming into Poundland more so on the management side, which has traditionally always been a little bit harder for us,” she says. “Our challenge now as an organisation isn’t so much about attracting candidates as screening them.”
The main priority for the HR department over the coming year will be to simplify systems and processes and ensure staff want to remain with the company once the economy recovers.
“It’s quite easy to get caught up in the fact that we are doing well,” says Sharples. “We have to make sure that everything we’re doing is not just for now, but is sustainable for the future as well, and things like the benefits package fit into that.
“We’re also looking to implement NVQs nationally, and taking on a lot of the base work in terms of the training material so that NVQs are part of our day job. That’s a lot of hard work for us and is a big challenge.