The uncertain economic outlook is forcing businesses to find new ways - other than pay rises - to motivate and incentivise their staff.
With cost control a key performance indicator for fashion businesses in these times of cautious consumer spending, retailers and brands are looking for new ways to retain staff, with the traditional pay rise not always the most cost-effective option.
Investment in training and development is being increased, while more of an emphasis is being put on a well-supported and regular appraisal system and clear career paths, and new incentives are being used to make people feel better about the business they work in.
These can range from theatre tickets given as individual rewards, to extra holiday as a long-service reward, flexible working hours and flexible remuneration packages.
These quirkier motivational tools sit comfortably alongside more traditional incentives and help to build the reputation of a business as a good employer.
At mainstream womenswear retailer East, the combination of easily understandable bonus schemes, strong training and development processes and a range of tangible work/life balance benefits is paying dividends.
Chief operating officer Suzi Spink describes East as having low staff turnover and a high retention rate among a highly motivated workforce compared with its competitors: “Of course, money is a great motivational tool, but the atmosphere of the business and how you treat people is crucial. We like to find out what really motivates each individual - everyone is different and it is never just money - and then link every goal to their motivational drivers.”
Bonus schemes at East, which has more than 60 stores and concessions and nearly 600 staff, are EBITDA-related for head office teams, while store bonuses are based on monthly sales targets.
Transparency about the performance of the business helps people feel part of the company, as do social events. Spink says: “East is not a family set-up now, but because of its history it still has a family feel. Events like barbecues and sports days help individuals feel part of the company and they help integration between departments, which is good for those teams that don’t normally have any reason to work together.”
Additionally, Spink is keen that her colleagues enjoy a good working environment. Head office staff have free car parking, subsidised gym membership and a 35-hour working week, with early closing - 3pm - on Fridays.
Mathew Dixon, director of recruitment firm Hudson Walker International, agrees that fashion businesses need to work on the work/life balance issues, for example offering time off in lieu to reward long working hours.
“Everyone appreciates this, but especially parents as it gives them the flexibility to attend their children’s schools for events such as afternoon plays and football matches,” he says. “Staff need to be recognised and rewarded - and businesses should benchmark against competitors to ensure they stay competitive on salary - but the easiest and most motivating things of all are the ‘thank you’ to staff at the end of each day, the ‘well done’ when success is achieved, and having a general interest in their lives.”
Recruitment firm Fashion & Retail Personnel is also seeing an increasing interest from candidates on the benefits offered by fashion businesses and sees this as a key area through which teams are motivated and incentivised. Family-friendly policies are now more important than ever.
Four-day weeks or nine-day fortnights are being sought, according to Fashion & Retail Personnel associate director Helen Taylor. Candidates are also looking for a combination of flexible benefits - where they can choose how to slice an overall value of benefits - as well as flexible working hours. “Flexible benefits and flexible working hours have been trailblazed by the largest retailers, so they have to be working,” Taylor says.
In some more difficult-to-fill disciplines or locations, some businesses are offering “golden hellos” - or one-off cash sums - and cash sums when women return from maternity leave, Taylor adds.
While small retailers find it much harder to put resources into full-blown HR schemes, they can refine their attractiveness as a good employer that people want to stay with.
At designer independent Giulio in Cambridge, where a total of 30 staff work across its two stores and head office functions, owner Giulio Cinque runs a formal training scheme and also uses incentives to ensure his team is well motivated beyond salary.
“Pay is always a big issue, but I like my people to feel they are gaining something by working for us, as well as them contributing to my business,” he says. “They have to feel that they are getting something out of it.”
Cinque has recently shifted to individual commissions for retail staff rather than team schemes, which has proved a good motivator. Additionally, certain high-ticket items will have sales incentives attached to them in the form of bottles of wine or expensive dinners out. “We are selling expensive, beautiful product and people want to work with us because of that - and we want to share a good result with them.”
But perhaps more important are team evenings out, taking retail team members on buying trips and attending brand days. Such days away from the stores enthuses the team, Cinque says. “Being away from the store is refreshing. We are working with quality products and I like everyone to feel that they are really part of what we are trying to achieve. That way they are more efficient and effective in what they do.”
A tool being increasingly used in head offices for middle-tier management and upwards to motivate teams is Medium Term Incentive Programmes (M-Tips). These give time-related rather than performance-related bonuses. For example, bonuses of up to 100% of an annual salary can be awarded on completion of three years’ service. The schemes are graduated depending on the employees’ position in the business and there are also some examples of five-year deals.
Paul Meecham, director of recruitment firm Detail Executive Search, says M-Tips are being increasingly used by firms in less desirable locations, in sectors where headhunting is rife and among companies - often private equity-owned - that have three or five-year plans.
“The concept behind M-Tips is to tie people into a business with a scheme that is over and above a standard package. It has been around for a while but is a relatively new tool in fashion retail,” he says.
Motivating and incentivising is a key retention tool for fashion businesses. Whether this is early office closing, paid sabbaticals, service-related increases in holiday entitlement or shopping vouchers, the cost to business is likely to be far lower than that of recruiting new staff.
As East’s Spink says: “Of course, life is much more comfortable when you are doing well, but it also helps when you work in a nice environment and feel totally involved in the business.”
- Top tips for motivating and incentivising from East chief operating officer Suzi Spink
- Set clear goals for colleagues and review them regularly
- Help individuals and teams envisage what it will be like when they achieve their goal
- Ensure everyone is aware of how their role contributes to the company’s success
- Offer training, development and a clear career path
- Share company success with teams
- Provide people with a good and safe working environment
- Always look to promote from within
- Take the time to listen to colleagues through one-to-ones, employee surveys and general catch-ups
- Do all of the above rather than just talking about doing them