On the front cover of Sainsbury’s annual report, published last month, the supermarket chain asks: “What will it take to make Sainsbury’s great again?”. It is this question that has dominated the progress of the retailer since the trauma of being overtaken by Tesco a decade ago.
With 153,000 employees and 728 stores, Sainsbury’s is the country’s third largest food retailer and, after struggling for a number of years, has been showing signs of recovery under new chief executive Justin King.
Although profits are still hugely down (254m in May against 675m the year before), its market share has been growing, and is now at 15.9%, up from 15.5% on the year before, according to research from TNS SuperPanel, leaving it snapping at the heels of Asda.
King, who was hired from Marks & Spencer last year, has wielded the axe at the firm’s London HQ, cutting a quarter of positions, and has so far closed 13 under-performing stores.
A new finance director, former Carpet Right executive Darren Shapland, is also joining in August.
Despite this, the chain remains dogged by management buy-out rumours in the City, with former Asda boss, Archie Norman, as one name commonly put in the frame.
Sainsbury’s estimates that it recruits around 50,000 people a year and, in May, launched a drive to hire 10,000 over-50s by the end of the year.
It hires some 120 graduates a year – mostly on the retail side, but some within HQ – working in finance, HR, training and trading.
The company uses all the traditional recruitment channels, such as in-store advertisements, posters, find-a-friend initiatives, local and national newspapers and the internet.
“We spend a lot of time recruiting for attitude. You can give people the skills to do the job, but we want the right people,” explains HR director Imelda Walsh.
Back in 2002, staff turnover was running at 35%. This time around, Walsh declines to quote an exact figure, but admits it is higher than she would like, partly because of the demographics of the Sainbury’s workforce, many of whom are relatively young.
In May, the chain announced a cull of 350 jobs at its banking arm, and there have also been many changes within the top 200 personnel of the business.
The company has “the full plethora” of flexible working policies, including generous maternity, paternity and adoptive leave, all of which are posted on the internal intranet, says Walsh.
More than 60% of Sainsbury’s staff are female, and 68% work part-time.
Workers with laptops can access the intranet from home.
Training and development
Training and development sits within the HR function, although there is an arm within the retail division that deals with more specialised, technical training.
While there is online training available, the company has pulled back somewhat from this approach in recent years, concentrating on more coaching and face-to-face training.
In February, Sainsbury’s linked up with retail union Usdaw to launch an in-store learning partnership, targeting IT, literacy and numeracy. There has also been a particular emphasis on leadership development, says Walsh.
Performance management is embedded within the organisation rather than seen as something to be carried out in isolation, explains Walsh.
“We had a big drive to put a very simple, straightforward performance management process in store so that colleagues know where they stand,” she says.
There are extensive buddying and mentoring systems in place, she adds. All managers have a year-end performance review, but appraisals are often carried out more frequently.
There is regular communication with staff through the intranet, the popular monthly company newsletter and employee surveys.
“In the ‘bad old days’, people were not told why things were being done, but now we give them feedback,” says Walsh.
In March, Sainsbury’s revealed it was offering bonuses to its 1,100 managers to get sales back on track and, in January, chairman Philip Hampton said the chain planned to link pay more closely to performance and provide greater incentives to junior managers.
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- Sainsbury’s employs 140 HR staff at its London HQ and a further 865 HR and personnel staff located in its stores and depots, giving a ratio of one HR employee to every 152 employees.
- The HR starting salary varies, but graduate salaries within the group start at about 21,700.
- HR director Imelda Walsh, who joined the company in 2001 from drinks firm Diageo, is not on the board of the Plc but is on the operating board, and reports directly to CEO Justin King.
- Beyond the day-to-day challenges of operating in a highly-competitive, high-profile environment, the main HR challenge for the foreseeable future, explains Walsh, will be locating, managing and recruiting talent, both at the top and further down.
- “Our focus is very much on what we are doing with our top 1,000 leaders, supermarket managers and their grade equivalent or above. We are putting them through a leadership programme that involves some self-examination, looking at style and behaviours, how you put behaviours into practice, and feeding that back into the programme,” she says.
- The programme starts at the end of June and will be completed by early November, after which the next phase will be rolled out.
- Reward strategies have also been a key issue, with a new employee share plan being put into place last July.