Interview with Liz Bell, HR director at B&Q
B&Q has been lauded for hiring older people. But now HRD Liz Bell is targeting the other end of the spectrum - the 18-24-year-olds. So what other major changes are afoot?
Ever since 1989, when B&Q experimented by opening a store in Macclesfield staffed entirely by over-50s - an initiative that produced 18% higher profits with six times less staff turnover - the DIY giant has developed something of a cult status in the HR community. Regularly receiving Diverse Employer of the Year accolades, the organisation has rightly been lauded as a top employer, and is currently one of only eight organisations globally to have won Gallup's Great Workplace Award for the last three years. B&Q rates 4.24 out of five, which is touching on 'world class'.
But with a recession to deal with and fewer people moving home (both of which strike fear into home improvement stores), HRD Liz Bell wants the world to know there is a lot more to B&Q than hiring PR-friendly 90-year-olds.
"I am a retailer first and an HR person second," asserts the board director HR boss responsible for 33,500 staff across 330 stores. "In retail, good HR means being commercial. More than ever, my role is about adding value back to the business, not sitting in the background holding the rulebook."
It may come as a surprise to some that Bell is actually devoting a lot of her time on younger employees, specifically in training them up to deliver exceptional customer service. "While it's fair to say we've enjoyed a reputation for hiring older people - our oldest employee, Sid Prior, is 95," says Bell - "we don't want to drive this so much any more. I'd rather we built a strong reputation as an all-ages employer, so all people are comfortable applying."
Such is this change in attitude that B&Q now has a policy of specifically using Jobcentre Plus to target the 18 to 24 age group. "It makes sense," she states. As a result of this, what is often not reported is the fact that 25% of B&Q's staff is now under 24 and most of these apply for new store openings. "You want the right mix of people in-store and you want young people who want to build a career at B&Q," she says.
With more youth has come a commitment to spend a lot more on training. While it is something of a cliche for HRDs that a recession is exactly the time to invest in people, after moving to her current role at the end of 2008, last year Bell introduced a series of staff initiatives with real teeth. In early 2009 three major training commitments were launched, plus a headline-grabbing monthly bonus scheme.
The training is based on externallyrecognised qualifications: NVQs, City & Guilds qualifications and apprenticeships. And early results are impressive: "By the end of 2009, we had 10,000 staff at NVQ Level 2," Bell says. The NVQs are divided between retail skills and product knowledge and practical training has been further supported with the launch of its City & Guilds scheme. All staff are eligible and there is no limit on the amount of training they can do. "We are planning to have 5,000 people on City & Guilds courses within a year," she says. On the apprenticeship front, 300 employees took part in 2009.
The bonus change was B&Q's other major staff initiative for 2009 - called Store Team Bonus. This is paid monthly based on performance against KPIs such as sales, profit and cost savings. "We've turned the traditional annual bonus on its head, which has been a real risk," Bell states. This "risk" is currently on track to cost B&Q a cool £1 million per month because "on average those receiving the bonus earn up to 10% extra, but this can go up to around 14%," she says. In theory, though, the bonus is self-funding, or if it is not, it pays for itself in a month. On the upside, though, this has contributed to how B&Q has managed to buck the downward sales trends many of its rivals have suffered. The business's most recent trading statement, for the 13 weeks to 31 October 2009, showed B&Q sales had increased by 6.3%.
"Like most retailers, we started 2009 pessimistic, but we are delivering better results than expected," she says. "We have to get on top of this now, though, because 2010 has got scope to be quite difficult again and like-for-like sales will be tougher," she adds.
With commentators still split on whether a 'double-dip recession' will become a reality this year, this admission is an acceptance she still has her work cut out this year. The hard work started in the winter of 2008 when a headcount freeze was introduced, which is still on. By not replacing leavers at head office, 10% of positions have been cut, including 12 roles vacated and not replaced in HR. Although it still leaves her with more than 100 HR staff (the retail HR team numbers 72; the store support office HR team is 20, with 45 in organisational development and three in the senior HR team), Bell admits she would like to have more.
"If I had an unlimited budget, there would be other roles I'd like to bring in," she says. "But what we have tried to do is also challenge ourselves on budget rather than just headcount. We have assessed everything and asked ourselves whether what we are doing is properly focused and whether they are adding value."
Fortunately, attrition rates dropped dramatically in 2009, from 30% to about 20%. But even maintaining this, she concedes, will be difficult: "We have seen a 10% reduction year-on-year, but a lot of this was due to the economic climate. If we can keep attrition rates at no higher than, say, 20%, that would be a great success."
On her side have been some popular recent changes to B&Q's flexible working and benefits programme, which now enables 60% of staff (47% of them are men) to enjoy some form of flexible working. Since term-time contracts were re-launched in 2007/8, uptake has increased by 50%. B&Q has also been ranked one of the Top 50 places Women Want to Work for three years, and a quarter of its managers are female.
These targets are arguably secondary to the broader director-level ambitions. "Our HR strategy is tied to the three-year business plan," Bell says. "We have been targeted with helping deliver £300 million profit and a £3 Kingfisher (its parent company) share price by 2012." At time of writing, its shares sit at the £2.38 mark, up 20p following the Q3 trading update.
So does Bell fight a good corner in the boardroom? "I'd love to say I'm a very feisty person, but Euan (Sutherland, CEO) is very committed to the people agenda. Corny as it sounds, we are a people business. It's the people who give customers their store experience and even if we are innovative in terms of product, other people copy us quickly, so a real differentiator is people."
Bell's relationship with Sutherland is clearly a close one, and in more ways than one: "Our desks are next to each other," she explains, "which is great as issues come up in general conversation. He's a great retailer, and is very keen to impress on me that HR needs to continue to innovate - this is not just about turning the handle."
'Innovation' regarding staffing decisions has got the retailer its fair share of bad PR in the past. On a day-to-day level, B&Q has been criticised in the past year for not paying staff unable to make it to work because of the severe snow in 2009 and there were also shop-floor grumblings about how its new uniforms were impractical.
More weighty criticisms - and, to be fair to Bell, ones that date from some years before she joined B&Q - have come in the form of payouts for senior staff relocation and for an employee walk-out when staff were asked to sing the Muppets theme song.
The former relates to reports that a former finance director received £500,000 to move 11 miles closer to head office. While this was before her time, Bell makes it clear it won't happen again: "People have to be at least 50 miles from head office and relocation budgets are linked to salaries," she clarifies. "We follow the Inland Revenue guidelines and generally people have to be moving significant distances to get the tax break."
The Muppets incident harks back to a time when US-style razzmatazz and team songs were quite the thing at B&Q. The now infamous initiative, at the launch of the East Kilbride store in Scotland, caused the retailer - as well as staff - a lot of embarrassment. Bell explains it was a case of an idea that should never have become customer-facing. And while 'Muppetgate' also happened before she joined, she is keen to impress that today's tactics are firmly focused on performance and inclusivity.
"I make it clear to all managers that the onus is on respecting their staff. People should never be put in a situation where they are embarrassed at work and so our focus is much more clearly on results."
So what next for Bell and her staff at Britain's biggest home improvement retailer? Well, it will be about retention rather than recruitment, as "there won't be a lot of new stores opening", she says. The emphasis will be on "maximising the value" at existing stores.
In practice this will see B&Q re-examine the KPIs it has in place for its bonus scheme. Bell does not see drastic changes but measurement of customer service levels will be one major addition. "We'll be looking at how we can get a better measure on customer service in a fair way," she sums up.
Striking this balance between customer service and staff satisfaction is always going to be a tricky one, especially in a still-hostile retail landscape. The Gallup results have set the bar high and 2010's results will be compiled soon. However, it is a challenge Liz Bell clearly relishes.
1965: Educated at Manchester High School for Girls; sociology & social
administration degree, University of Birmingham
1975: Personnel manager, Marks & Spencer
1989: Personnel controller, Duty Free Shoppers
1995: HR manager, head office and distribution, Wickes
1996: HR manager, Waterstones
1998: Retail operations and HR director, Jaeger and Viyella
2004: Divisional director of HR, B&Q; promoted to HR director in 2008
Outside interests: Travel, cinema, ballet and reading