On the other side of the counter, the contrast is in the way the workers serving you are perceived. In the fast food organisations these roles have been labelled McJobs low pay, low prestige, low benefits and low future. Across the high street, coffee chains such as Starbucks are calling their staff partners and pitching themselves as new wave employers, dispensing benefits and wellbeing programmes to workers alongside customers mochaccinos and skinny lattes. But does the HR thinking behind the scenes at these outlets differ as widely as the menus?
When it comes to their choice of job titles, their strategies appear to be similar. At McDonalds, for example, the person serving your fries is known as a crew member, while sandwich chain Pret A Manger (a third of which is owned by McDonalds) refers to its front-line staff as team members. But all these terms are attempts to talk up the jobs from being seen as bog-standard, entry-level ones, believes Andy Westwood, head of policy research at The Work Foundation, citing the example of barista for someone who swizzles the taps in a coffee bar. That said, such titles can have a real impact on an individuals sense of worth and that must surely be the firms intention. It also helps to convince an employee that the global corporation that pays their wages does care about its staff.
These organisations place a lot of emphasis on teaching staff how to function as part of a shift team or a crew. What will motivate people to get up in the morning is the feeling that they must not let the other team members down, says Westwood. Theres a good rationale for the employers to develop that team ethos.
At Pret A Manger, the team member title is put into practice. Our recruitment strategy very much concentrates on the person, rather than the skills, because we can train people afterwards, says Esther OHalloran, Prets head of retail recruitment. A job applicant will work in a shop for a day and, in true Big Brother style, its the team that votes on whether the applicant gets the job or not.
The recruitment strategy is focused very much on the fact that its not one person making the decision its the whole team. From day one, that person feels they belong to the team, OHalloran explains.
We do emphasise, however, that you can be yourself, adds group HR director Sue Cheetham. Customers dont want to see little Pret clones, they want to see real people.
The hospitality and leisure sector is well known for employing young people, traditionally a cheap option, and this presents its own challenges. We recognise that we have a number of young employees and they need additional training to understand about customers, what their needs are and how they differ, says Lynn Phillips, McDonalds head of human resources and customer services. She points specifically to a customer service improvement scheme at McDonalds called Out to make you smile. It increases peoples feeling of involvement and participation, and helps to give them the skills and knowledge that also makes them feel better about doing the job, she says.
Around two-thirds of McDonalds staff is under 21 years old. We do recognise how much of a responsibility that is. For many it is their first job, adds Phillips. As well as giving them the skills for their current jobs, she argues that the firm provides transferable skills. These are things like teamworking, work standards and communication which is particularly important in building up the confidence of kids coming out of school.
Alongside the issue of young workers runs staff retention. This is a sector where turnover is high and people tend to vote with their feet. If workers can get a better hourly rate at another chain and there are new outlets opening regularly as the UK launch of doughnut brand Krispy Kreme illustrates (see box) they will chop and change.
The average stay of McDonalds hourly paid staff is 22 months, with staff turnover falling by 30% in the past four years. Management turn-over has also dropped by 15%. Long-term opportunities include becoming franchisees and achieving management status 70% of restaurant managers are promoted from within.
Pret believes retention depends on development, training and support. Its staff turnover has dropped from 127% in 2000 to 62% in 2002. As a benchmark for the sector, OHalloran quotes an industry average that can peak at 200%, but generally hovers around 150%. If you can imagine working in a business where for every person you hire, youre taking them on two or three times a year, its a nightmare from a recruitment and cost point of view, she admits.
In the past, the majority of people quitting rival Costa Coffee did so in the first 90 days. Were aiming to get to 80% retention on our permanent key players. Were not quite there yet but its our target, admits Rob Gower, director of HR and change at Costa Coffee. We have looked at how we lost staff in the past. You must give them a proper induction and good training at the start thats when you can sway people to stay with you or not.
Because perceptions of entry-level jobs arent particularly positive, the better employers have had to be clever at recruiting and retaining staff.
Where you can stick an ad in a paper and get five or six decent applicants, there is no pressure to be
innovative, argues Westwood. But when youre in a sector where that isnt true, you really have to think about it.
Phillips stresses that while the image of McDonalds as an employer has improved, its also trying improve the image of its hourly paid staff to counter the McJob tag. We do recognise that it has a knock-on effect on how our employees feel about working for the company, she says. This year the chain is embarking on a new initiative. Its about the people behind the jobs, she explains. We are going to have employee case study posters in our restaurants to illustrate to customers and employees that there are real people behind the jobs. It will list their other achievements, what they are studying and how McDonalds helps them with that. Its to show that a staff member isnt just the person serving their burgers.
In contrast, both Costa Coffee and Pret A Manger are now concentrating on management. We work from the belief that if you have good quality management in every store and you measure that, then the other issues like turnover, performance and retention start to disappear, says Gower.
As these companies and the market have matured, HR strategies have altered significantly evolving with peoples changing priorities. The HR department at Pret was only formed in 1999, a clue in itself as to how strategy has changed. When we first started, our people tended to be single or moving through London, so they were not necessarily interested in things like pensions or maternity leave, explains Prets Cheetham. Now, on the compensations and benefits side, there are things that we didnt really need when we first started. As Pret has grown in size, we have had to think about organisational structures and what jobs are there to deliver.
At Costa Coffee Gower is focusing on the leadership of area managers. You have to allow people to make decisions. Give them the basic framework of the business and the brand values, and then work on coaching as opposed to directive management, he says. An area manager running 20 or more stores cant be telling staff what to do every five minutes.
McDonalds has found itself under increasing global scrutiny over the past few months, following the announcement in November that it was closing 175 outlets and reducing staff numbers by up to 600, a move that it expects will cost $390 million after tax. The UK arm is not aware of any related financial implications
in this country, although a handful of central London outlets have been reviewed.
With so many speculating about a potentially less golden future for those golden arches, what has HRs role been? What people really want to know is how this news affects them, says Phillips. For the most part its about reassuring people. There are things said on a company-wide level that wont have specific implications for the UK. Yet people naturally ask the question, What is this about?
The importance for HR is to show that the company understands issues to do with people and employees, she continues, to make it clear what employees contribution to the business is, how HR is contributing to the companys performance and improving skills and motivation, which ultimately all leads to the other business indicators improving. Its important that we help the company face the challenge of increasing competition.
Whatever their differing strategies, there is a solid link between McDonalds and Pret the McDonalds Corporation bought a 33% stake in the sandwich chain in 2001. Both companies play down any great HR significance to the deal, yet OHalloran believes the larger company watches what the smaller one does.
McDonalds is very curious about what we do, how we do it and they are learning from us, rather than us learning from them, insists OHalloran, although she admits that access to information on McDonalds global infrastructure has been useful. When youre moving into new markets Hong Kong and New York, for instance legislation and local employment laws are different and McDonalds has been a real help initially when going into these markets.
Pret staff had a lot of questions when the management team made the announcement about the McDonalds link-up, she says. They asked why we were doing it, what it meant for us and some thought, Oh my god, theres going to be Ronald McDonalds running through our shops. But management explained it and told us first, so there was a huge communication link. It gave people an opportunity to voice their views and talk about what it would mean to them and to be reassured.
Costa Coffee was bought by Whitbread in 1997, which also includes Pizza Hut in its stable of brands. Gower admits that he has found learning opportunities between the two. Ive worked very closely with Pizza Huts HR director in terms of really getting to grips with how to run a high street business, says Gower. Its been about getting the right people, and the recruitment process of identifying those right people. To a certain extent, in the old days within the catering sector there was a feeling that employers were not too fussy about the people they took on. I think its about changing that attitude.
There are probably more similarities between these companies than many people involved would care to admit. Outside Pret you will see ads for good jobs available here its quite a bold statement, and certainly something I dont think they would even put tongue-in-cheek on the doors of McDonalds, even though in principle the pay structures are not that different. It goes to show how much of this is rooted in perception, muses Westwood. Because a customer can buy decent coffee and sandwiches with exotic fillings in one, working there is perceived as a better job, when in reality theres probably little to choose between the two.
