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The value chain

Apart from their salary package, how can fashion retailers acknowledge and reward the good work of their staff and keep them motivated?

Whether it be a generous staff discount, extra holiday allowances or even just a manager remembering to say well done, there is much apart from a basic salary to incentivise your most hard-working members of staff.

But can having schemes in place to prove to staff that you value them really make your business more competitive?

There’s a big movement across store groups to recognise the value of people in retail, says Anne Seaman, chief executive of Skillsmart Retail, who says this is part of a wider government-led push to boost employee engagement as a means of sharpening competitiveness.

In HR circles, the term Employer Value Proposition (EVP) is now commonplace. It refers to the deal employers make with staff, showing clearly what rewards are available for them, so long as they’re willing to live the brand values, engage with the company’s goals and ambitions, and do their best for the company.

“It’s also just common sense to try to make retail jobs as rewarding as possible - particularly in stores where hours can be long and roles not the best paid,” says Seaman. “So many fashion retail employers will be using HR techniques, and offerings beyond pay, to incentivise and reward their people, and to stimulate best performances.”

Down the line


Chris Hopkins, managing director of employee communications agency Caburn Hope, says good line management is at the heart of this. “It’s up to the line managers to ensure employees know what is expected of them, that their efforts are valued as part of the overall business goals, and that they will be rewarded. In turn, the line manager has to be given the tools and confidence to do this effectively.”

Good communication and robust frontline management should be backed up with tangible benefits linked to performance. “Pay increases are a rarity these days, but fashion retailers can show they value their people - from the sales assistant to the buyer or IT support worker - by also offering good training opportunities, career development, benefits packages, a pension, recognition schemes and incentive schemes,” says Hopkins. “The best retail employers are proving to be those that focus on how engaged their employees are in their day-to-day activities. If the company is treating its people well and making them feel valued, productivity goes up, customer service improves and talent is retained - giving the business that all-important competitive edge.”

Some companies have a workplace culture designed to make staff feel highly valued. For instance, employees at online maternity and womenswear retailer Isabella Oliver are treated to free breakfast every day, early-finish Fridays and staff sample sales.

Nearly all fashion retailers offer a staff discount, which helps to ease the discomfort many employees feel about their low wage. Bonus schemes that incentivise with hard cash or treats are commonplace. New Look says it offers competitive bonuses and incentives, as well as a pension scheme and staff discount. Ted Baker’s bonus scheme is linked to sales targets and individual and corporate performance. La Senza’s lingerie consultants are motivated by a bonus of up to 50% of salary if sales targets are reached, as well as receiving discounts, a comprehensive training programme, a benefits package and “a fun and exciting work environment”.

Recognition target


Sales-linked bonuses sound particularly attractive. However, one fashion retail HR director, who asked not to be named, says that in the current economic climate it can be very difficult for sales employees to reach the necessary targets. For this reason, many companies might be currently redesigning their incentive programmes.

Nicola Wensley, manager for buying and merchandising at recruitment company Michael Page, sees clients showing how much they value staff by offering realistic targets and individual performance or category-related bonuses, rather than generic company bonuses. “This is incentivising and rewarding personal success,” she says.

In the downturn, employers are realising that recognition programmes are perceived as a more suitable proposition than cash bonuses, says Kuljit Kaur, head of business development at performance improvement consultancy P&MM. “With redundancies and austerity measures in place in so many workplaces, it’s just not possible and doesn’t seem appropriate to be offering big bonuses,” says Kaur. “Corporate organisations are choosing to recognise outstanding performance and offer smaller treats because people still need to be thanked, even if the budgets for doing so have diminished. A personalised thank you from the boss and a nominal voucher award can have a big impact, particularly if publicised through the right channels.

“You can’t underestimate how much people enjoy the kudos of being in the spotlight, and being recognised by their manager and in front of their peers,” Kaur adds. ‘Instant reward’ products such as Voucher Cheques can also em- power line managers to reward positive behaviour as they see it taking place.


Flexible benefits


Asos has a treat scheme, whereby staff are rewarded to a lie-in or an ‘experience day’ as recognition for achieving something outstanding, or making an extra effort. Another brand-aligned and low-cost recognition scheme is Ted Baker’s Wisdom Awards. “This is recognition for the longer-serving members of the team, and a chance for them to celebrate and share their stories with the rest of the team,” says a Ted Baker spokesman.

Larger fashion retailers are moving towards offering flexible benefits as a means of keeping employees happy, loyal and feeling valued, says Louise Crampton, HR manager at recruitment agency Fashion & Retail Personnel. “Many companies are taking tips from the financial sector and offering better reward packages with more choice regarding how employees can collect their benefits,” she says. “This can be particularly effective in attracting senior-level employees who can often buy or sell parts of holiday allowances, receive various leisure-based benefits, have a wider choice of company cars, or receive financial equivalents as part of their remuneration package.”

Wensley at Michael Page says: “If a retailer is perceived as having a long-term, secure future and a culture that tangibly values its people, staff turnover is likely to be low and productivity and customer service levels high.”

The challenge for fashion retailers is how to achieve such a culture cost-effectively, and in tandem with long-term commercial success. To get the balance right, HR must work very closely with the rest of the business.

Valuing its people - H&M’s long-term incentive programme

Long-term incentive programmes can show how much you value staff. Earlier this year, fashion giant H&M launched a unique incentive programme to
motivate employees and improve retention levels.

Main company shareholder The Stefan Persson Family initiated the scheme by donating £89m worth of H&M shares to a newly established Swedish foundation, Stiftelsen H&M Incentive Programme. Over time, H&M employees all over the world will be rewarded from this fund, and H&M will make annual contributions into it.

Staff must have worked for the business for at least five years to qualify for payments, and they can participate regardless of age, position or salary level. The basic principle is that payments start when an employee turns 62, but after 2021 those who have worked for the company for 10 years will be able to receive some payments from the foundation.

“The idea is to create a long-term incentive programme which is the same for all employees,” said Stefan Persson, chairman of the board at H&M, at the launch. “It’s also a way of generating further involvement. Our hope is that H&M will continue to develop well and that the employees will be able to benefit from H&M’s value growth in the same manner as a shareholder.”

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