High staff turnover is a problem for the trade, but one agency is hoping to reverse that trend. Phil Mellows meets Jane Sunley of learnpurple.
Jane Sunley took a call from the boss of a big company the other day. He wanted to know where to find new recruits.
Jane asked him what his staff turnover was and politely suggested that he could go a long way to solving his recruitment problem if he did something about keeping the people who already work for him. The man hung up.
British industry tends to go deaf when you start talking about staff retention. There are dozens of agencies working around the recruitment of people of one sort or another but do you know how many specialise in advising companies on retention? One.
It's called learnpurple and it was set up by Jane and trainer Tim Browne only a year ago. Jane has scoured the internet to find a competitor but could find only one similar company - in the States. The two are in fact now sharing knowledge. It's a lonely life in staff retention.
Learnpurple also has close links with the hospitality recruitment business. Jane was managing director of Mayday for 15 years and it was while she was there she realised how neglected the retention end of the equation was.
"A lot of time, effort and money is spent on recruitment but it's a different story when it comes to retaining people," she said. "Surprisingly, we've found that, if anything, the hospitality industry is rather better at that than other sectors, probably because staff turnover is so high that it has to be an issue."
Quite simply, whatever the size of your business, losing good people costs you money. In fact, it costs industry so much money that Jane deliberately plays down the results of some of the research for fear of not being taken seriously. The impact of losing someone goes far beyond having to find someone to replace them. The shockwaves ripple right through the business. It is estimated, for instance, that hospitality managers spend half their time recruiting staff rather than running the operation.
A recent investigation by a research firm called EP First, for instance, came up with a replacement figure for a manager of between two and five times their annual salary.
Even on a low turnover of 15 per cent of managers a year, that means a medium-sized managed pubco is losing nearly £3m.
In fact, the manager turnover figure in hospitality, according to government statistics, is probably twice that.
Across all hospitality staff, Jane quotes a total cost to the sector of £432m a year - but that's based on a conservative replacement cost of £500 a time.
Learnpurple's first year has demonstrated that it has tapped into a real demand for help.
Its own workforce at its Covent Garden office has doubled from two to four with the team taking on a range of work from management consultancy to training managers to supplying the practical tools that can help firms keep people a bit longer.
So why do people leave a job? It isn't usually money. Top answer in a Mori poll in the USA this year was "my boss is a jerk". Breaking that down, Jane identifies communication as the problem.
"Companies need to develop a consultation culture," she said. "Once a year appraisals are not enough. People want more."
That puts a lot of pressure on busy managers, so what learnpurple developed over its first six months was a "talent toolbox" that electronically enables companies to carry out reviews, appraisals, staff surveys, inductions, training evaluation and exit interviews without lots of meetings.
It's done by email and the system will automatically highlight things to focus on and collate the information so you know who your happiest workers are.
An important part of this is finding out what skills and knowledge individuals can bring to an organisation beyond their job description. If you can make use of those hidden talents, people feel more valued.
Training is a crucial factor in staff retention, but what kind of training?
"People want personal learning, transferable skills, and that is a big draw in recruitment," said Jane.
Learnpurple runs a series of one-day workshops for hospitality managers that deal with such general skills as time management, problem solving, financial awareness and assertiveness plus, for smaller organisations, some popular 90-minute masterclasses with titles like Teaching Others, Service That Sells and Beating Stress.
Some will tell you that even when you get everything right, you won't rid hospitality of high labour turnover. Somehow, it's in the sector's genes. But you won't get that from Jane.
"I know a hospitality business which has brought its management turnover down from 50 per cent to four per cent," she said. "Essentially I believe that people like to go to work, but they want it to be on their own terms. Most of hospitality can't give them that, so we've got to give them other things.
Jane anticipates "a lot of boardroom battles" before the argument for staff retention can be won.
"It is seen as a hefty investment and it needs a leap of faith. But there is a business case that needs to be heeded."
- Jane will be speaking at The Publican Conference on November 7. For details contact Emma Gaultier on 020 8565 4451.
Staff retention - the facts
- Labour turnover in the UK is running at record levels. Across all industries one in five people will change their job this year. In hospitality the figure is one in two
- Pubs replace 94 per cent of their workforce each year
- A quarter of all job leavers have only been in the post for six months
- The cost of replacing a manager is between two and five times their salary
- Hospitality managers spend half their time on recruitment
- A pub company with 160 managed pubs could be losing £3m a year as a result of pub managers leaving their outlets
- Learnpurple research suggests that 70 per cent of leavers would have stayed if they had been better managed.
The hidden costs
Losing a valued member of staff costs more than just the price of recruiting a replacement. Hidden costs lie in:
- training the new person
- hiring temporary cover
- management time
- disruption to the business
- lost revenue
- lost knowledge
- customer relations
- the impact on the motivation and morale of other staff
- the impact on quality of service
- loss of continuity
- increased threat from competitors
- other people leaving.
Since this article was posted thePublican.com has come across another UK organisation offering a similar service to learnpurple. Leicester-based Corcoran Management Services was launched in July by Andy Corcoran, a former McDonalds executive and lecturer in operations management.