Supermarket sweep: Asda

Nic Paton profiles top supermarkets Tesco, Asda and Sainsbury’s, and looks at their HR strategies and what they have planned for the future

Asda is the UK’s second biggest supermarket chain after Tesco. It has 279 stores, including its first 12 in Northern Ireland added in June 2005, 150,000 employees and sales in 2003 (the last figures available) of £14.4bn. It was bought in 1999 by US retail giant Wal-Mart.

Unlike the troubled industrial relations of its parent company, Asda has a very different reputation in terms of how it treats its workers.

In the 1980s, the business was considered something of an industry basket-case, but it was turned around and then massively expanded in the 1990s, first under Archie Norman and then Allan Leighton.

More recently, however, things have looked less rosy, with the departure of chief executive Tony DeNunzio in March, sales under pressure and its market share slipping. Asda overtook Sainsbury’s in 2003 but last month warned that Sainsbury’s could claw its way back past the Leeds-based retailer.

DeNunzio’s replacement, Andy Bond, who was promoted from chief operating officer, has turned to his employees – or ‘colleagues’ as Asda prefers to call them – for help, offering bonuses for suggestions on how to cut costs. He has also begun overhauling the management team, bringing back the well-regarded former logistics director David Cheeswright, who had left to run Wal-Mart’s Canadian business.

Asda recruits between 7,000 and 10,000 people a year. The ethos behind recruitment is to hire “for attitude rather than skills”.

Between 60 and 70 graduates are hired a year, and are put through a three-year training scheme in one of the following fields: finance, logistics, IT, buying or trading, retail and the clothing arm George. Graduates on the retail scheme can also do a stint with Wal-Mart.

Preferred recruitment methods for colleagues are in-store advertisements and job centres, while for graduates, the internet and signing up people who have had holiday jobs are common routes.

Four years ago, it launched a ‘talent race’, designed to recruit or promote a more ethnically diverse range of managers.

Staff turnover is currently 25%, which Asda argues is the lowest in the sector “by a substantial margin”. At manager-level, the split between home-grown and imported talent is about 70% and 30% respectively. Women make up 45.2% of its managers at all levels, and 25,000 colleagues are aged 50 or over.

The chain offers 52 weeks’ maternity leave (half of it paid), five weeks’ paternity leave (three unpaid) and adoption leave, the option of flexi-time or homeworking, and career breaks after three years’ service.

Other benefits include childcare leave during school holidays, shift-swapping schemes and a ‘school starter’ scheme enabling parents to take a half-day off for their child’s first day at school. It also offers leave for grandparents, fertility treatment, carers and religious festivals, ‘V-time’ for people who want to reduce their hours in return for doing voluntary work, and a ‘Big Break’, where staff can add two weeks’ unpaid leave to annual holiday for a special trip or holiday.

Like the rest of the sector, talent retention at all levels is the key HR challenge going forward, says people director David Smith. “Food retail has always suffered from high turnover and is something most retailers have to grapple with,” he says.

Training and development
All staff get a basic two-day induction on joining the company. Store managers receive eight weeks’ intensive training, while colleagues get a week’s basic training followed by 24 weeks’ on-the-job training.

Asda runs 15 ‘Stores of Learning’, spending more than £5m a year on training new and existing managers, and has a ‘Stepping Stones’ development programme to encourage people to move up a level at a time. It also runs an adult-learning initiative.

Performance management
Smith says evaluation and assessment is continuous at all levels. Managers are formally evaluated three times a year, and how they manage their team is one of the key performance indicators.

Good performance management, Smith argues, is all about reinforcing behaviours and getting people to want to do a good job. “Ninety-five per cent of people will respond to that,” he says.

Graduates get six-monthly reviews throughout their training programme.
The company also runs monthly ‘We’re listening’ surveys and has an employee suggestion scheme.

HR factfile
Asda has an HR team of 100 colleagues at its headquarters in Leeds and 16 regional people managers around the country.

In May, it announced that five of its female staff were to be promoted into more senior positions and five new positions were to be created: a people director for policy and development; a retail people director; a head of reward and benefits; a head of people for logistics; and a head of colleague relations.

People director David Smith has been with the company for 12 years and has a background in the coal industry. He has a seat on the board.

Starting salaries in the department range from about £14,000 for a clerical position up to £20,000 for a managerial position.  Smith declined to reveal his salary.

Smith says his priorities are simple: get the right talent for the business and keep them. “It is about leading, modelling and encouraging people,” Smith explains.

Within HR, he says, this means getting a mix of HR professionals and line people.

The HR strategy is very much linked to the business values of the company, he adds. “You start with the needs of the business and then develop your strategic thrusts from there.”

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