McDonald’s CEO Steve Easterbrook wants to redefine the chain’s employer brand. Georgina Fuller finds out what he has on the menu.
Steve Easterbrook, chief executive and president of McDonald’s UK, likes to run his business with the same transparency as one of the famous fast-food chain’s 1,225 UK outlets. The 2.5 million people that visit a McDonald’s each day can clearly see the kitchens and the preparation that goes into their meal. McDonald’s UK employees are also given a window into the mechanics of the company, according to Easterbrook.
“Businesses today have become increasingly transparent – from employment practices to how and where your food is made. Anyone that joins McDonald’s needs to understand the processes that make it work,” says Easterbrook. All new starters, from marketing executives to senior managers, spend at least a week in one of the restaurants as part of their induction.
Easterbrook became CEO and president in April this year, having joined McDonald’s from PricewaterhouseCoopers in 1993 as an accountant. He became regional vice-president for the UK’s southern region in 2001 after spending time in operations and finance.
Easterbrook’s philosophy is simple and he is clear about where his priorities lie.
“If you get the people part right, the rest will follow,” he says.
HR at the centre
HR is at the centre of the business and Easterbrook likes to create an egalitarian working environment. “HR is a key driver in shaping and implementing our strategy as a progressive employer,” he says. “I never underestimate the challenge of looking after our workforce, and our people practices are absolutely fundamental. I want our workforce to feel comfortable, respected and valued. There is a hierarchy, but there are no airs and graces here,” he says.
The 67,000 UK staff all have Easterbrook’s e-mail address and, he claims, he answers all queries personally.
His commitment to HR is evident in the fact that David Fairhurst, McDonald’s vice-president (people), is one of Easterbrook’s four direct reports (together with finance, marketing and IT). However, with just 54 people in the HR and training teams at McDonald’s UK, spread across its London headquarters in East Finchley and regional offices, the HR function is, in the words of Fairhurst, “somewhat lean”.
Day-to-day responsibility for HR and training is devolved to line managers and the company’s 200 franchises. “We have made delivery on the ground easy by putting in place clear, simple systems and processes, developed in partnership between national HR and training, line management and franchises,” says Fairhurst. The national team provides an ‘always-on’ HR support function for these line managers across the country.
Easterbrook and Fairhurst are clearly united in their overriding aim: to communicate the new McDonald’s “employment story”. Fairhurst, former global resourcing director at Tesco, is clear about what his role as vice-president (people) entails. “HR’s job is to get the right staff and make sure they’re engaged with their work,” he says.
Easterbrook and Fairhurst are focused on recruitment and getting service-orientated people with a positive attitude. This is clearly relayed by their ‘Hire The Smile’ recruitment strategy. And despite the ‘McJob’ reputation (defined by Canadian novelist Douglas Coupland in his cult 1991 novel Generation X as a “low-prestige, low-dignity, low-benefit, no-future job in the service sector”), McDonald’s only takes on one in four of the applicants that apply to work for them.
McDonald’s is, of course, a ubiquitous global brand, a pioneer of American fast-food and synonymous with capitalism. And Easterbrook is candid about its corporate reputation and his objective to improve it.
“In the past, we have seemed somewhat apologetic about who and what we are, but we have to believe in the brand.”
Then the burger giant’s image was severely tarnished by producer Morgan Spurlock’s Super Size Me documentary in 2004, in which Spurlock damaged his health and gained about 12kg after eating nothing but McDonald’s food for 30 days. A doctor told Spurlock that his liver had “turned to paté” after a month of Big Macs.
The perception gap
McDonald’s has since added so-called ‘healthy options’ to its menu, including salads, paninis and orange juice. But this only goes some of the way towards overcoming the poor public perception of the McDonald’s brand.
Fairhurst says: “Before I joined the company, people asked me why I would want to work there. I joined because I wanted to fix the employer brand.”
Easterbrook acknowledges that one of his biggest challenges is to overcome what he refers to as “the perception gap”.
“We have a problem: the service experience and the customer view. Our people take pride in running a business, for 16 hours a day, seven days a week. They feel good about it,” he claims. “But our customers look at our workers and the stress, speed and urgency that an open kitchen creates and they feel sympathy for them. We need to bridge that gap,” he says.
Easterbrook also recognises that every customer is, of course, a potential employee, and the majority of new recruits come from the customer base.
“Our richest source of talent is from our customers, and a large number of ex-employees are still our customers,” he says.
Fairhurst adds: “It can be tricky supporting our new starters when they are being told that working for our company is a dead-end job.” To get around this, one of the areas McDonald’s now covers with new starters – primarily students – is the questions their parents will ask about their choice of employer.
Yet the company’s employee satisfaction surveys speak volumes. Nine out of 10 young McDonald’s employees showed high levels of satisfaction and commitment to their jobs in a recent survey. Eight out of 10 of McDonald’s UK restaurant managers started as crew members on an hourly rate, and the average length of service is three years for each employee. And while current staff turnover levels are about 67%, this is a significant improvement from five years ago when they stood at 100%.
In addition, the company invests around £14m a year in global training, and staff are offered a range of employment benefits, from flexible working to online training to enhance communication skills. McDonald’s was also one of the first companies in the UK to set up an equal opportunities working group in 1992.
But Easterbrook is realistic and is not overly concerned about the company’s retention challenges.
“I don’t think we’ll get much lower turnover levels than we currently have,” he says. “Most of our workers are students who see it as a summer job.”
Fairhurst agrees: “We don’t want to just get into a mindset of how we keep people at all costs,” he says. “We have ‘stay meetings’ rather than ‘exit meetings’ and would rather engage our staff while they are with us.”
Despite being an international brand with restaurants in 119 countries, Easterbrook denies that the company operates in an overly global way. He says that wherever the McDonald’s restaurant operates, it is managed by a local team, and managers are encouraged to develop local supply chains and to source meat from local farmers. He does recognise, however, that McDonald’s has a part to play as a global employer.
“We do have a responsibility as a large, progressive employer,” he says, and cites the launch of the company’s ‘Our Lounge’ training website, which gives employees access to national GCSE-equivalent qualifications, as a way of helping to tackle the UK skills shortage.
Both Easterbrook and Fairhurst recognise that they have a long journey ahead to change the corporate image of McDonald’s in the UK. “We’re going to act our way out – not just talk our way out,” says Easterbrook. “But our primary focus is always going to be taking care of our staff.” And I, for one, believe him.
- McDonald’s opened its first US restaurant in 1955 and its first UK restaurant in 1974.
- It has more than 26,500 outlets in more than 119 countries, serving 39 million people a day. It is the largest food service company in the world.
- More than 70% of its restaurants are run by franchises.
- Big Macs: “Burgers have been demonised and we have to work to convince our audience that we’re really not that bad.”
- Being a global brand: “It’s absolutely recognised that we’re a global brand. But we’re encouraged to manage locally – wherever we operate around the world.”
- Corporate social responsibility: “I don’t use the term CSR I call it ‘keeping relevant’.”
- Healthy eating: “We were alienating our core customers by introducing salads.”