Taking heed of what your staff think could not only stop them jumping ship – it could lift profits too.
How many of your sales assistants, buyers, merchandisers and support staff are willing to go the extra mile for the good of the company? Would they praise your business, or bad-mouth you as an awful employer?
Employee engagement surveys go some way to answering these questions, revealing how your company compares with others and whether your people are becoming more or less engaged over time. The Government wants all companies to embrace engagement by regularly checking staff attitudes, and improving line management, communications and workplace conditions.
Larger fashion retailers including Marks & Spencer, John Lewis and Monsoon Accessorize carry out such staff research, and others are looking at it. But what should you measure and what difference does it make?
The theory is that if staff in all areas of the business ‘buy into’ a company’s brand values, feel well-rewarded, enabled to do a good job, and confident that the company has their interests at heart, the benefits to the employer are happier, healthier staff, higher retention rates and improved productivity. In retail, this can translate to more sales and profit. For example, Gallup research in 2009/10 for a UK retailer with 174 stores found that shops that improved engagement year on year grew their profits by 3.8%, while those that did not improve their engagement suffered a 2% decrease in profits.
“Contented, engaged employees are more likely to deliver excellent customer service in stores, put in extra effort in their head office roles, and stay in jobs longer,” says Shelley Pinto, managing director at recruitment agency Fashion & Retail Personnel. “And engaged employees – people who enjoy their work and rate their employers highly – are also more likely to be brand advocates beyond work.”
Pinto says fashion retail employees often move jobs because they don’t like the company culture, or feel unsupported by line managers and undervalued by the company. “For the employer, that person moving on could take six months to replace, and there are the costs of recruitment, on-boarding and training a new member of staff,” she adds. “If you can encourage people to stay by treating them better, there’s going to be a huge commercial benefit to the company.”
Fiona Abrahams, managing director of recruitment agency Fashion Therapy, points out that certain fashion retailers are known in the industry for not treating their people very well. “That kind of poor reputation as an employer can be damning when it comes to recruitment, often meaning there’s a revolving door culture and all the cost implications around that,” she says.
Companies that don’t look after their staff tend to expect extra effort from people without putting the right incentives in place, in Abrahams’ view. The less attractive companies also tend to lack training or career progression opportunities. “Engaging people isn’t just about financial reward,” she says. “Many people look for a new job when they want the chance to progress up the career ladder, and in some workplaces there just isn’t that structure – or any communication about opportunities – to encourage them.”
John Lewis and M&S probably lead the sector in carrying out staff surveys and working to improve engagement. John Lewis does regular surveys and partners are informed about strategic business decisions through a range of communications, and can get involved in councils and committees.
M&S finds out how employees feel about the company through its annual Your Say survey; this year participation increased, for the third year running, to 95%. M&S says its ‘positivity score’ has risen to 76% and its ‘engagement score’ (the average percentage of five key questions that measure engagement) to 75%. The retailer also has a Business Involvement Group, which enables employees’ opinions and ideas to be presented to senior management. M&S’s HR director Tanith Dodge says: “We believe it is vital to the success of our business to engage our employees and listen to their views, and by doing this we ensure that they feel motivated and are aware that they can influence the business, to change things for the better.”
Are the fashion chains as committed to improving staff engagement? “It’s not very widely implemented in our sector, and many retailers rely on a chat at the annual performance review, and having a ‘suggestion box’ for getting feedback from employees,” says Abrahams.
At La Senza, engagement has come on to the agenda recently. “It’s something we’re exploring, and we’re in the process of selecting a research agency that can carry out surveys for us,” says Laura Keane, the lingerie retailer’s head of HR. “We believe that understanding the attitudes of our people and measuring engagement can have long-term business benefits.”
Catherine McGill, head of resourcing at Monsoon Accessorize, says the group is working to keep on top of attitudes and making sure brand values are clearly communicated and lived out in the way people work. “It’s really hard to attract and keep talent in retail today, so if you can ensure your people feel happy, valued and committed to the business, you’re in a much stronger position.”
Monsoon Accessorize carried out staff surveys in 2004 and 2008, and has just measured staff engagement with a survey this year, marking a renewed effort to drive employee engagement in the business. The findings are encouraging: 82% of employees who took part were “proud to work for Monsoon”. McGill says the three lowest-scoring areas of the survey will be in the spotlight, with ideas welcomed from employees about what could be done to communicate the company’s strategy better, and better raise awareness of career opportunities in the company.
With fashion chains expanding internationally it’s particularly challenging to keep track of how well understood the brand is, and how happy and involved employees feel in their work. McGill says: “We need people to understand the brand everywhere we operate and employee surveys can help us measure and improve on that.”
The question must be asked, is awareness and ‘buy-in’ of the brand values and company culture the same for a sales assistant working one day a week in its Maidstone store, as it is for a full-time colleague in the Wellingborough distribution centre or a manager in one of its Russian stores?
For efficiency across so many international divisions, Monsoon Accessorize will look at regular ‘pulse surveys’ online, which are considered a good, low-cost way to do a quick ‘temperature check’ of attitudes, and so hone in on specific problem areas of a business.
Administration costs for annual staff surveys can be high, and in many cases chief executives are cynical of the return on investment they provide, which could explain reluctance in this sector.
Where surveys are done, a common problem is that the findings aren’t acted on and this can irritate employees. To get the best return on investment and prove their worth to staff, it pays not only to take action based on the survey’s findings, but to communicate to staff what’s happening as a result.
The Employee Engagement Task Force
The government-sponsored but industry-led Employee Engagement Task Force was launched in March by David Cameron. Its aim is to ensure that engagement rises up the agenda in British companies in order to boost productivity.
The prime minister said a focus on employee engagement would “deliver sustainable growth across the UK, and help people improve their wellbeing”.
Task Force chairman David MacLeod says the Engaging for Success report (2009) identified a clear distinction in the UK between companies that were doing surveys and carrying out limited work on the findings, and organisations that had grasped an understanding of the transformational benefits of employee engagement and were actually seeing results.
“We believe you’ve got to come at it from the performance angle,” says MacLeod. “Employee engagement for the Task Force is about how you can harness the full capability and potential of your people.
“But that capability and potential must be willingly offered. When you get that from employees, you begin to see better customer service, higher levels of innovation and more commitment to the success of the organisation.”