McDonalds’ decision to make its people strategy part of its business strategy has not only polished up a previously tarnished employer brand but also seen staff engagement levels leap.
The rationale behind integrating rather than aligning the two policies was a simple one, however, said Jez Langhorn, vice president of people for the UK and Northern Europe at the HR Performance 2011 conference at London Olympia this week.
“We started with business needs and said ‘if we’ve got good people doing a good job, we’re likely to have higher sales and profitability’,” he explained. “But we knew that in order to release ‘people power’ and create something that the business needed and people valued, we had to produce something that would benefit them both.”
This approach was dubbed the ‘Fusion model’. “As a result of Fusion thinking, it’s possible to create a virtuous circle to drive engagement and performance, but not just in McDonalds – the same principles apply to all companies,” Langhorn said.
But in order to understand what the fast-food chain’s 85,000 staff employed in 1,200 restaurants across the UK did value about working there, it undertook an employee survey. This activity was also replicated in the US and Europe.
Staff priorities
The results, which were remarkably similar in all countries, were categorised into three key staff priority areas:
- Family and friends – this was about working in a team and feeling part of the organisation
- Flexibility in working patterns – whether this meant “inflexible, flexible working” for parents picking up children from school at fixed times or “flexible, flexible working”, where carers, for example, may need to change shifts at short notice
- Futures – a concept that ranged from gaining qualifications to seeing McDonalds involved in environmental and other social initiatives
Based on the findings, a number of schemes were subsequently introduced to try and ensure that staff needs were met. For example, in 2006, the company implemented its Ourlounge.co.uk intranet site, which is now used by about 40,000 of its personnel each day.
The site provides information ranging from what employees can expect to experience on their first day to discounts and educational material on topics such as ‘how to become a manager’. It also includes competitions, networking forums and facilities to enable staff to access and manage their own shift schedules.
The idea in the latter instance is to try and support the needs of both “flexible” and “inflexible” flexible workers by balancing them together. “It’s important to do it because, if you favour one group, it’s left to the rest to pick up the pieces and that’s not good for engagement,” said Langhorn.
In terms of futures, meanwhile, McDonalds has spent £35 million on learning and development in order to boost the skills levels of its workers, some 44% of whom have two or more indicators of social disadvantage.
The firm is only one of three employers in the UK to have been given awarding status for basic skills qualifications in maths and English and is, in fact, one of the top 10 learning providers in the country. It also provides apprenticeships and in November last year launched a degree programme for store managers with Manchester Metropolitan University.
Changing times
On the environmental side of things, it has appointed 417 ‘Planet Champion’ volunteers in 356 of its restaurants, whose aim it is to encourage behavioural change among colleagues.
What this has all meant in business terms, said Langhorn, is increased levels of “commitment, competence and confidence” that have resulted in a £300 million hike in sales, a jump of 27.6% since 2004. The number of customers has also increased by 66.4% and outlets have recently scored a “perfect score 0” when assessed by mystery shoppers.
Moreover, while staff (or crew to use the lingo) turnover stood at 80.2% in 2004, it has now plummeted to 31.9%, with 90-day turnover rates falling from 24.5% to a tiny 3.7%. In fact, the average crew member stays with McDonalds for an average 3.5 years, while managers remain for more like 15.
Commitments levels have also grown from 77% seven years ago to 90% today, while pride in working for the firm has leapt from 60% to 86% now.
“It’s all helped to change the brand and attract the people we need to drive the business,” said Langhorn.
The next phase of McDonald’s strategy, however, will be to actively manage the social impact of the company and its people in what has been dubbed the ‘SuperFusion model’. “In the wake of the financial situation, it’s about understanding that progressive organisations will be judged on their wider social impact,” Langhorn concludes.
