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Lucie Mitchell

Sift Media

Freelance journalist and former editor of HRZone

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David Fairhurst interview: Managing the workforce in a recession

Workforce Management

Lucie Mitchell talks to David Fairhurst, HR chief at McDonald’s, about his views on the importance of employee engagement and talent management during the current downturn.

David Fairhurst, senior vice president, chief people officer at McDonald’s Northern Europe, knows a thing or two about human resources. Recently voted as HR’s most influential practitioner – one of many accolades over the last few years – he has been responsible for a number of achievements at the fast food chain, including the development of a pan-European talent management programme and its highly successful training programme in which employees can be awarded nationally-recognised qualifications.
Fairhurst is therefore extremely well placed to advise on HR’s role in the current recession, especially when it comes to employee engagement.
"You do have to continue to engage with employees because they are going to be with you at the end of a recession and you have to maintain that engagement – so this needs to be thought through," remarks Fairhurst. "Think of engagement at its most simple level, which is creating a mutual value between the employer and staff – you do things for me and I do this for you. However, as we ride through the recession we have to re-focus on engaging employees and what we do to engage them will be different and will take some thinking about."

A different view on engagement

The question is, then, how will it be different? "Well, for example, is there more financial support that you need to give your employers during this time? Do you need to be more paternal, making sure they don’t dip out of pension schemes and that they themselves become too short-term in their outlook? We have to think about all these sorts of things, but the principle is that you have to keep engaging," he advises.
Equally, HR must also think about the employees that are being 'disengaged' from the organisation, and must ensure it is done in such a way that is perceived to be fair and compassionate by others, he says.
"But there is one challenge I put out there for HR directors – when you look back at the end of this recession, will you be a case study of role model behaviour, values and best practice as an organisation? Will people say, 'remember what that business did'?"
This challenge comes back to what Fairhurst dubs as a 'new way' of doing things, in terms of engagement. "We must not take our eye off this continual experimentation and delivering the results," he comments.
However, he warns there is a danger that employers can become short-sighted in the current downturn. "It’s too easy to stop doing all these things like engagement, creativity, and experimentation, and go right to the other end and say, now is the time to make sure that people have a desk and you don’t bark at them – that’s very short sighted. If the profession as a whole can really hold together and focus and help them keep their nerve and remain creative in difficult times, then I think some good can be done in times of recession."

Managing talent

Another thing that can come under stress during a recession is talent management. Fairhurst points out that there are all types of misconceptions about talent management at the moment, yet talent needs managing, no matter what the market conditions are, he emphasises.
"Organisations that are proactively managed as opposed to 'let happen' are the ones that have been more successful, and it’s no surprise, if you look at the top priorities from all the research coming out from Harvard and places like that, the key issues are reputation, and the CEO’s credibility, and talent has gone right to the top of the CEO’s agenda as they have figured out that organisations are about talent and how you manage that talent."
Fairhurst adds that talent is an organisational resource that needs to be managed in a way that suits the current and future needs of the organisation’s strategy, regardless of the economic climate. "Of course, the fact that we are talking about the lives and livelihoods of individuals here makes this a particularly difficult management challenge – but that is the HR challenge for the 21st century and we have to rise to it."
HR departments also need to think about their strategic initiatives within the organisation, and must not just view talent management as another term for 'succession planning'. "Strategic talent management these days is all about projecting the operational income of an organisation – where the business is going to make money, what the talent implications and the gaps are from that, how things need to evolve and where you are going to get it from," he says.
So, it is not just about "bums on seats" anymore, comments Fairhurst, and who fills what job, it is about keeping up with the fast-moving changing skill set  – which leads him on to the subject of the war for talent.
"Some have said the war for talent has eased, but this is misleading as talent supply is dictated by the rate of change in business and the economy – change has never been faster so the war for talent is as alive as it has ever been," he remarks.

What is McDonalds' secret? 


So how does Fairhurst himself ensure staff morale, engagement and productivity levels stay buoyant at McDonald’s, during the downturn?
"First and foremost, McDonald’s is one of the organisations that has enjoyed positive growth during the current downturn and there are strong business reasons for this. At the same time, we have continued forward momentum with initiatives such as apprenticeships, degrees and LEPs. Maintaining this momentum at a time when it might be argued we could 'take our foot off the gas' has undoubtedly enhanced morale, motivation and productivity levels."
And for HR in general, Fairhurst states that the current recession is the ideal time for HR to step up to the challenge. "HR has for years wanted the top table position, and if ever there was a time to show what values can be created at the top table, it is now. I like the old joke that leadership is like a teabag – you only know how good it is when it’s in hot water. It’s the same with HR – you only know how good your HR function is when they show how they adapt and how they maintain focus in the toughest times, and now’s the time to step up to the function."
Fairhurst's top tips: What should HR focus on during a recession?

  • Doing what is right for the business – short and long term
  • Engage those who will ride out the recession with you to ensure they are aligned with what the organisation needs to achieve
  • Treat those who may have to leave the organisation with compassion and fairness
  • If we are judged in hindsight to have done the right things for our organisation, in the right way for our people, we will have done ourselves and our profession an enormous amount of good

4 Responses

  1. Full involvement
    As David says, employees’ focus has become naturally turned inwards to their own job security, the ramifications of losing peers and generally keeping their heads down. All this at a time when the business needs exactly the opposite behaviour. Yet employees desperately want direction and to know how they can contribute to the fight back. Leaders need to ‘sell’ the direction and priorities for the business like never before, but the crucial step is to ask these employees ‘how’ to get there, not tell them.

    This process of asking your people ‘how’ creates full involvement. It gets some great ideas and solutions. It also gets people aligned and committed to doing what they can to crack the company’s most pressing problems. ‘Engagement’ isn’t good enough anymore, it’s only about being ‘on-side’, ‘buying-in’ and not resisting. It’s passive. True involvement is about taking ownership and doing things differently – it’s active and dynamic and can create its own momentum.

    In the latest Star Trek movie, when the chips were down, Jim Kirk didn’t spend time making sure people were clear on the risks of “transporter” use and making sure they were happy with their jumpsuits, he was all about the imminent threat, throwing out the rules and inspiring people to do whatever they could to save the ship.

    Let’s raise our sights to find ways to fully involve our people in the big battle, there is nothing more powerful or urgent we can do.

  2. Talent and engagement in a recession
    I am sure that in most organizations there are peple who have talents which could be relevant and valuable. However there are not enough managers who put enough effort in finding out what their people could be good at which would be relevant. Too many managers turn over their responsibility for training and developing their people to some other part of the organization. Too few bother about ‘engaging’ their people in the success of the busines to their mutual benefit. Developing talent and engaging the workforce at all levels is essential in tough times.
    The good news is that it is not difficult to get managers to train and develop their people, as I suggested in an article for HRZone about two years ago.

    John Pope

  3. A Management view of Engagement.
    In Summary, engagement is a good thing, whatever it is, and we should keep doing it to people to get them to do what we want.

    This is the same conclusion as the McLeod – Clarke Report “Engaging for Success,” in which they attempted to analyse the effect of engagement without actually knowing what it was or having seen an example of what it really looks like.
    Engagement is not what you do to people.
    Engagement is what people do to the organisation they work for.

    By trying to make the workforce engage management create the resistance that prevents them from being engaged.

    The job of management is therefore not to engage the workforce, it is to create the environment at work that will allow the workforce to engage, if they choose.

    If management do not allow the workforce to make this choice on their own then, whatever they call it, it will fail because it will be seen by the workforce as another trick by management to get the workforce to do more for less.

    If however the workforce are allowed to make their own choices it is very likely that they will choose to do more for less, because it is their choice.

    There was one amazing quote in the MacLeod – Clarke report from Vic Bayliss of Westminster City Council on their engagement programme.
    He said,
    “Staff have seen this as a programme that is being done with them, not to them.”

    Saying this Vic is bucking the trend of the “Engaging for Success” report and with the attitude of Mr Fairhurst who all still appear to be looking for another way to make the workforce do more for less, without understanding that this is the exact attitude of manipulation and exploitation that is preventing the workforce from choosing to engage.

    We are in great danger from industry leaders who use the term engagement to describe this sort of manipulative management.
    The word will soon become associated with their failure and the cycle will begin again.
    We will have to find another word to describe what happens when the workforce are allowed to care about what they do, then management will use the new word to once again try to find the magic bullet to manipulate their workforces.

    There is no magic bullet except the one that management repeatedly fire through their own left foot.

    Take a lesson from Vic Bayliss, Work with your employees not against them.

    Stop telling them what to do, find out instead what they need.

    Peter A Hunter

  4. The phoney war for talent
    As one would expect, Mr Fairhurst talks considerable sense about the recession and its implications for HR and talent management in particular. Nor would I quarrel with his view that talent needs to be high on the top team’s agenda.

    Where I part company with this distinguished practitioner is on the war for talent issue. The concept was formulated by McKinsey some years back and has stampeded many companies into thinking talent is in short supply. It is not. Companies, including Mr Fairhurst’s are stuffed full of talent.

    As the international research by Gallup shows, there is a dreadfully low level of engagement in most companies. This means a vast amount of talent goes waste. To suggest that there is a shortage when you are not using what you have got is surely quite wrong.

    Of course everyone in Mcdonald’s may be fully engaged though that is hardly the widespread impression one gains from the countless tales of what it is really like working for the company.

    To sum up, the war for talent concept is indeed alive and well, the reality that it implies is however entirely different. It’s an entirely phoney war!

    Andrew Leigh
    My blog at the HRZone

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Lucie Mitchell

Freelance journalist and former editor of HRZone

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