How Marks & Spencer Hires and Retains Experienced Staff at their Manchester Shared Services Center
Established in 1884, Marks & Spencer has since grown into a significant UK business with a strong international brand. Fifteen million people visit one of 399 UK stores each week. The growing international business includes wholly owned stores in the Republic of Ireland and Hong Kong, franchises in 30 territories and Kings Supermarkets in the U.S.. The company has 65,000 employees in the UK of which approximately 61,000 work in a store-based role. In 2004/05 Marks & Spencer made operating profits of GBP709m on turnover of GBP7.9 bn.
One way that Marks & Spencer has sought to deliver both cost savings and greater operational efficiency is through their shared services initiative. The business case for the establishment of Marks & Spencer Shared Services Limited (MSSSL) was put to the board in June 2002. The first part of the financial shared services center (SSC) opened in Greater Manchester in January 2003, followed by the HR service center in September 2003. These offices had initial responsibility for coordinating finance and HR across the company, with retail HR administration also being covered by June 2004. The operation has now grown to employ 230 staff, with the flexibility to cover the peak Christmas trading period.
Marks & Spencer initially chose Manchester because the city was already a well-established UK shared services location. Manchester's geographical travel-to-work catchment area ensures that the labor market remains buoyant and has sustainable capacity for future growth. As a result, Marks & Spencer were able to employ qualified and capable employees from within the local economy. Marks & Spencer continues to ensure that it achieves maximum benefit from the MSSSL operation by paying special attention to four main areas of activity:
1. Getting the recruitment brief right
2. Clear development paths & opportunities for multi-skilling
3. Learning & development
4. Keeping pace with the market
Getting the Recruitment Brief Right
All first-phase recruitment for Marks & Spencer Shared Services Limited was undertaken in advance of the SSC going live. Appropriate periods of time were allowed for knowledge transfer from the original operation to the new site in Manchester. Good recruitment processes have been key to attracting and retaining employees to MSSSL. There are a number of areas within the recruitment arena to be aware of:
- Identification of selection processes: it is crucial to identify the skills and competencies that are required. Marks & Spencer's experience has identified that an assessment approach, involving interview and selection exercises, is the most effective method to recruit new employees.
- Outsource/in-house recruitment: MSSSL used an established recruitment agency with experience in managing large campaigns, who acted as an extension of the business. This proved to be an extremely successful method for the original recruitment of the 80 positions available.
- Ongoing recruitment process: MSSSL originally established relationships with a small number of recruitment agencies, but since the Manchester center opened there has been a move towards in-house recruitment. Marks & Spencer has, therefore, established a recruitment brand that fits the corporate image and which aims to attract potential employees to the kind of work available at MSSSL.
Potential candidates are still quite unaware of exactly what the shared services sector can offer, as the industry is in its infancy, compared to many other business sectors. It is important, therefore, to educate the labor pool about the sector, the nature of the work that's available and career opportunities. This, of course, serves to raise the profile for all shared services within Manchester. MSSSL now has established professionallymeasured selection processes, which line managers are wholly accountable for utilizing, along with the 'Recommend a Friend Scheme', to ensure the future development of the recruitment function.
Marks & Spencer also identified the need for the induction process to be relevant to the shared services function whilst putting it into context in the wider business activities of the company. The MSSSL induction therefore incorporates sessions on the following:
- The importance of maintaining a customer focus
- An emphasis on promoting a 'One Team' culture
- Brand awareness
- Ensuring that the induction process is tailored to the role of the shared services employee
Clear Development Paths & Opportunities for Multi-Skilling
The shared services sector traditionally experiences a high level of employee turnover, largely due to the transactional nature of the work involved. There is a risk that employees will move from one SSC to another to 'rotate' the activity undertaken in this kind of role.
Recognizing this issue, MSSSL have put a number of measures in place to maximize the skills of employees, which in turn lessens their desire to move on.
Several key measures have been implemented to ensure that staff members are made aware of, and encouraged to take advantage of, the full range of opportunities available:
- Succession Planning: a system has been established which, although relatively flat, allows for a clear career progression route. Five levels of roles provide a structured career path, whether the employee chooses to focus on one business area or move between functions (i.e. from HR Senior Administrator to Recruitment Team Leader). In addition, for each individual, a structured development program is devised in order to encourage the development of the skills required to pursue a more senior role. There is also the scope, particularly in a center of MSSSL's complexity, to encourage plenty of variety in an individual's career path by promoting the practice of working across teams.
- Business Awareness program: teams hold regular awareness events at which key business issues and performance results are discussed, with the aim of helping employees to identify the ways in which their own contribution fits into the wider business context. Regular attachments to the core retail business are encouraged and all employees are required to work in stores for at least one day over the busy Christmas period.
- Links into corporate and core business areas: cross-employment between MSSSL, other corporate areas and the retail element of the business are actively encouraged. Approximately 5% of staff turnover experienced by MSSSL is internal to Marks & Spencer, with candidates either moving into the MSSSL from another area of the business, or moving out to either a retail or a corporate function.
Learning & Development
Many of the roles undertaken by employees of the MSSSL require a degree of specialist knowledge, which in turn requires the provision of ongoing training and development.
Both individuals and organizations benefit from offering employees the opportunity to gain relevant qualifications. This helps to ensure that skills and capabilities are maximized across the organization. Other advantages include efficiency and cost effectiveness improvements as well as increased personal development which also helps to combat retention issues.
MSSSL faces the same challenges as many other shared services operations. Some traditional qualifications, such as CPP and CIPD, are expensive and not necessarily appropriate to the roles undertaken by MSSSL employees. MSSSL realized that a new approach was needed in order to ensure that appropriate training was made available. MSSSL therefore began to work with MIDAS (Manchester's Investment Agency) and other partners to establish a specific qualification that was both appropriate and cost-effective, and could be used alongside the more traditional qualifications, or as a pre-qualification if further study was required.
MSSSL worked in partnership with three other key North West shared services centers (AstraZeneca, The Royal Bank of Scotland and Tetrapak) to lobby for vocational training in this specialist field, most importantly through the development of a tailored Shared Services Center Qualification. The resulting BTEC qualification was designed by the MIDAS HR Forum's subworking group, and became the first in the country to meet the specific needs of SSCs and their employees. Accreditation is currently being sought through Edexcel and Skills Solutions, both Manchester-based training providers. The new BTEC qualification will also create a minimum standard within the sector for the longer term. At the time of writing, Marks & Spencer has six people undertaking the first stage qualification. MSSSL, in conjunction with MIDAS and other partners, is developing the next level of the qualification to provide a subsequent challenge for successful candidates.
MSSSL is also looking at the opportunity to work with a provider to create an in-house department which will support employees in obtaining external qualifications such as CIPD, AAT and CIMA and Payroll NVQ, whilst retaining a focus which is intrinsic to the job requirements.
The Importance of Keeping Pace with the Market
Training and Development: as discussed earlier, establishing a framework for training and development has been essential to retaining and attracting employees to MSSSL. Graduates make up a high proportion of shared services employees, and their motivation for joining MSSSL often centers on opportunities for continuous learning. Non-graduate employees have also actively committed to training and development. The nature of the shared services sector means that operations have to maintain development at a fast pace and keep one step ahead of competitors. The ongoing need to develop employees to the highest skill-levels possible in order to meet technological, administrative and customer requirements is paramount.
Network: Manchester benefits from the existence of an excellent support network in the form of the MIDAS-supported shared services community in the region. MIDAS has established several forums which offer a range of structured support and networking opportunities: the tri-annual North West Shared Services Forum for heads of SSCs; and quarterly networking meetings for HR Managers. There is also an active networking and best-practice sharing process, which occurs on a more informal basis, between the SSCs in the region.
Benchmarking Rewards: every year a number of North West SSOs participate in a benchmarking survey of salaries and benefits, organized by the MIDAS-led HR Forum. This activity has proven extremely useful in helping operations to keep up-to-date with trends and patterns. MSSSL has been able to monitor salaries and benefits and implement changes where necessary, ensuring that remuneration remains competitive and that the appropriate budget is made available for training and development.
Key Performance Indicators: one of the functions of the MIDAS quarterly HR forum is to allow shared services center HR Managers the opportunity to discuss common KPI's – such as staff turnover and absence – in order to benchmark and share best-practice methodology. As a result, MSSSL is able to implement necessary changes to HR policy.
Recruitment Initiatives: with the support of shared services operations across the North West, MIDAS has established a number of good practices for the benefit of all, such as actively promoting networking links with universities and colleges within the region, and regular attendance at graduate events, in order to publicize the careers available within the shared services sector.
MSSSL's success in retaining experienced staff is routed in both best-practice and staff development. The system is based on encouraging the principle of working as 'One Team', offering support for a structured and clear career path, and working innovatively with local partners such as MIDAS to introduce improvements – for example the world-leading BTEC qualification – for the benefit of their staff.
About the Authors
Group Head of Learning, Resourcing & HR Services
Marks and Spencer plc
Helen has worked predominantly in the food retailing sector starting her career with Morrisons Supermarkets where she worked in operations and HR for seven years. Helen spent six years with ASDA stores working in a number of senior head office and retail HR roles, including being the HR representative on the Wal-Mart integration team. Helen moved into financial services working for Norwich Union Life in 2001 where she headed up the Employee Relations, Recruitment and Learning & development functions. Helen then moved to Marks and Spencer plc in 2003. Her current role as Group Head of HR Services includes accountability for the HR Shared Service, Recruitment, Occupational Health, Learning & Development and Information Technology for HR.
HR Manager of Shared Services
Marks & Spencer plc