If Tesco was big three years ago when Personnel Today last looked at the sector (240,000 staff worldwide and the UK’s largest private sector employer), now its statistics are mind-boggling.
It has 367,000 staff worldwide (250,000 of them in the UK), 2,365 stores (1,770 in the UK), sales of more than £37bn, and last year reported pre-tax profits of just over £2bn. It also has an estimated 30% of the UK grocery market.
Tesco now ranges far beyond food, offering services including banking, flower delivery, online diets, legal advice, DVD rental and telecoms. There have even been suggestions that it might branch out into estate agency.
It operates in 13 countries and is the market leader in six. By the end of the year, Tesco intends to test two purely non-food stores in Manchester and Aberdeen.
First under Sir Iain (now Lord) Mac-Laurin, and since 1997 with Sir Terry Leahy, Tesco’s march has seemed inexorable and, to its critics, unstoppable. When it first overtook Sainsbury’s in 1995, analysts predicted the lead was Tesco’s to lose rather than Sainsbury’s to recapture. The chain has rarely put a foot wrong since.
Tesco aims to recruit 11,000 new employees this year, having hired a similar number last year.
It takes on between 80 to 150 graduates each year to two training schemes, one store and one office based.
Common recruitment methods include in-store advertising, events in local areas, and recommendations from existing employees through an employee referral scheme. Last year, for instance, Tesco asked checkout staff to help identify and recruit 12,000 temporary Christmas staff.
Interviews are conducted by the line manager to help build loyalty and buy-in to the decision. There is no probation or trial period. “If we think you are the right person to be hired, then we are committed to you,” according to personnel services director, Catherine Glickman.
People can also ‘job sample’ – trying out jobs for a short time to see whether working for Tesco is for them.
Three years ago, staff turnover was said to be 29.9%. Now, no specific figure was available but, says Glickman, turnover is below the industry average of around 35%.
Looking at the age spectrum, one in five staff are over 50 and Tesco employs more than 30,000 students. Last year, it also became the first business to set targets for the recruitment of disabled people.
The chain prides itself on people staying with the company – Leahy himself joined straight from university in 1979.
Tesco offers a wide range of flexible working options, including maternity and paternity leave, career breaks, job shares and shift-swaps. It has a company pension, plus a share ownership scheme, which, in March, shared out £220m.
Tesco also hit the headlines earlier this year when it said it was testing a scheme where workers are not paid for the first three days they are off sick.
But the chain insisted this was as much a retention issue as a crackdown on absence, arguing staff were also being offered extra holiday and a voucher scheme to reward those who did not take time off.
Training and development
Most training is delivered in-house or in-store by training or personnel managers.
At a group level, training is co-ordinated by the central personnel team and the ‘Tesco Academy’, which oversees the design of programmes.
Within stores, training is split into three levels. Bronze is basic training based on developing core skills, such as health and safety or hygiene, alongside specific departmental skills. Silver is about developing product knowledge or stock processes, and gold is aimed at encouraging people to become experts in their field.
For management, there is a scheme called Options, which is designed to give shop staff the skills and experience to develop into managers.
On average, its retail staff receive more than 4.5 million hours of training each year, Tesco estimates.
All staff have an annual performance review and work towards a personal development plan, with objectives set at the beginning of the year. They also have a career discussion with their line manager.
This is then fed into Tesco’s talent-spotting process, where all senior managers within the team will sit down to plan any moves within teams or departments. At a conference last year, Leahy said one in 10 staff were being targeted for training and promotion.
“People want feedback, and they want it from their boss,” says Glickman.
There is also the TWIST (Tesco Week In Store Together) programme, where senior management regularly go out on to the shop or departmental floor to find out what impact their policies are having.
Tesco uses a balanced scorecard approach to management through its ‘Steering Wheel’ programme. Managers monitor customers, operations, staff and finances using a traffic light system to denote meeting targets and finding problems.
The HR team has 50 employees, split between its Cheshunt headquarters and stores and depots around the country.
Outside head office, there is a personnel manager within each big store, a manager to cover a cluster of smaller stores, and then group managers to co-ordinate HR issues at a wider level. There is also a group team that deals with HR issues within the international operations and a senior group HR team sets policies and processes.
Group personnel director, Clare Chapman, is not on the board, but reports directly into Leahy. She also sits on Tesco’s People Matters Group – a board-level group that meets fortnightly.
The main HR challenges over the past few years, and looking forward, says personnel services director Catherine Glickman, continues to be finding and getting the most out of leaders, both current and future.
“When I joined in the 1990s, Tesco tended still to be operationally and finance driven. Now it has been transformed into a customer-driven business. The people plan is as serious and heavyweight as the customer, finance or operational plans,” she says.