How time and attendance software has helped New Look cut staff turnover and improve the bottom line
Three years ago, locals in the Dorset seaside town of Weymouth were used to seeing the New Look recruitment van trundling around the streets every week. In 2001, the UK’s third largest women’s fashion retailer was suffering from such high levels of staff turnover and absence that it needed to hold weekly recruitment days to drum up sufficient interest. Given that it has 500 stores across the UK and receives and distributes one million units of clothing every week, the logistics operation is key to its success and something had to change.
Three years on, however, it receives more CVs than it has vacancies, and staff turnover among its distribution centre associates (DCAs) – the people employed principally to receive and dispatch goods to stores – has dropped by 28 per cent (from 51.6 in September 2001 to 37.2 in March 2003). Absence levels have been reduced by 33 per cent and stability (based on those who have remained with the organisation for a year or more) has increased from 74.9 per cent in September 2001 to 94.3 per cent in March 2003. Added to this, productivity has risen 53 per cent and New Look has achieved paybill savings of £2.9m, £600,000 of which has been reinvested in pay rates for DCAs.
To complete the turnaround, a recent staff survey showed employees to be ‘extremely satisfied’, and at the end of last year, it was honoured with the Northgate Empower HR Award for Excellence in HR through Technology at the 2003 Personnel Today Awards.
The rapid transformation has been largely due to the introduction of a competency-based pay and training (CBPT) programme. While its central function was to address the historical issues of staff satisfaction and motivation, it also had to have a commercial application.
Sue Lloyd, who previously held HR roles within the NHS, had only been at the company for three months when, as logistics HR manager, she had to present the CBPT project to the board. Fortunately, she had a secret weapon: a tangible way of demonstrating the business benefits.
New Look was already using the Kronos time and attendance system for clocking on and off, and developed a way of extending it to measure various workplace tasks.
“The fact we had a piece of software that could measure human activity was the key and that helped me sell it to the board,” says Lloyd.
“You’ve got to be commercial and you’ve got to be able show a return on investment. When I took our plans in to the chief executive, he asked me: ‘How many more skirts would it help us sell?’. I explained that I couldn’t necessarily tell him how many more skirts we would sell, but I could guarantee the skirts would get to the shops much quicker, which increased the chances of a sale.”
The CBPT project embraces a clever use of technology with traditional HR values.
Its starting point saw the HR department sitting down with the DCAs to ask what would make them happier in their jobs. Issues emerging included the fact that all DCAs were being paid the same hourly rate irrespective of length of service, knowledge, skills, attendance levels or productivity. It also emerged that there was a lack of training and personal development. HR then held a number of focus groups and one-to-one interviews to identify the kind of training and development/pay and reward approaches that would be most effective in helping the organisation achieve its goals. It drew up a programme, which needed to provide the following:
- Greater efficiency and productivity
- An induction programme that enabled new starters to learn core skills and quickly become multi-skilled
- A plain-speaking set of behaviours that fostered a sense of teamwork, commitment, motivation and enjoyment for people while at work
- A means of recognising and measuring those who were successful in acquiring the core skills.
This framework was developed into the CBPT programme that is used by New Look today. Four levels of pay were also created, which DCAs attain by demonstrating competence in core and specialist skills, combined with a proven attendance record and productivity levels.
Concurrent with this activity, New Look put in place the technology and expertise that would enable it to measure workplace activity.
Lloyd and her team discovered the existing Kronos system could be adapted for measuring other tasks, such as unpacking and picking store orders.
“The Kronos technology played a huge part in it, but to establish a set of standard times for doing such tasks, we needed to train our own team of in-house industrial engineers,” explains Lloyd. “Based on methods and skills learned at the Harry Mitchell College (which provides modular courses in work measurement studies), staff watch a task, such as unpacking a box, being performed over and over again to define the average time it takes to do it.”
The ‘time spent’ information from the Kronos system is added to the information from the warehouse management system to provide New Look with an accurate picture of staff productivity.
Using what are known as standard minute values (SMVs), the organisation produced work performance scores (WPS) by individual under the British Standard BS100 rating system. The score – assessed over a rolling three month period – takes into account every possible aspect of the tasks being undertaken, including length of pick and distance walked, through to faulty equipment and personal needs.
Keith Statham, managing director of Kronos, says: “New Look has been innovative in the way it is using the system and uses much more of the available functionality than many other customers.”
Initially, staff and unions were cautious. Lloyd overcame this by holding one-to-one interviews with all 600 staff members to explain the organisation’s goals, each employee’s part in it and, crucially, how they would personally benefit.
“Unless you take this kind of approach, people can feel ‘done to’ when it comes to change. It’s important to involve people and to make them feel valued and listened to,” says Lloyd. “At the moment, we’re looking at new uniforms and a possible change in job title from DCA, and both these ideas have come from employees.”
Lloyd, who has recently been promoted to HR operations manager, is now refining the system and investigating whether it can be applied to other areas.
“We may be able to set a standard time that it takes to serve a customer,” says Lloyd, who has come to be associated with the mantra ‘if it can’t be measured, don’t do it’ when it comes to HR initiatives.
Whatever strategies Lloyd decides on, they will be inextricably linked to the business.
“Some HR staff give the profession a bad name by not being commercial and not looking at return on investment,” she says. “It’s all about being part of the business and getting among it. Then, as an HR person, you can sit down and work out how you can add value.”