How to create a great talent pipeline

08 August 2014
How to create a great talent pipeline

Staff turnover is a regrettable yet unavoidable cost for many companies, but there are new, creative ways to manage your talent. Emily Perry examines how three hospitality companies are leading the way when it comes to recruitment and retention

If you were asked how much your business spent on the costs of employee attrition and new hires each year, would you know?

Recruitment charity People 1st has suggested that the average hospitality business experiences a labour turnover of 20% and that the average cost of recruitment is £5,433 per post. Based on the two million jobs the industry currently offers, we spend a whopping minimum of £2.2b a year on replacing our people. And that's without counting the hidden costs, such as knock-on leavers, training, productivity loss and so on.

It's no surprise then that the topic of debate at this year's British Hospitality Association Summit was talent management. During a panel discussion on investment in the hospitality industry, Eric Bellquist of private equity group Hutton Collins (which bought burger restaurant chain Byron for £100m last year) said: "We believe the issue is not financing the company, but finding the right people and having the right HR support in place. The people issue is a big issue. It is expensive to hire people, and it is also expensive to have a high turnover in staff."

In general, that high turnover looks set to continue. Based on Purple Cubed's latest Talent Toolbox Review: 2014 People Engagement Trends report, it appears the industry has another frantic year in the ‘people transfer market' ahead. Despite employee happiness being up, the report found the number of those at high or medium risk of leaving the business had increased by 6%.

Delve into the findings and this relates to two key aspects. First, younger generations are more confident about their value and therefore have no qualms about leaving a business if they feel unable to reach their full potential, learn new skills or have new experiences. The buzzphrase for them is ‘portfolio career'. Second, and reflecting HR consultant Towers Watson's recent research, which highlighted that countries with higher GDP growth experience higher employee attrition, the UK economy's encouraging growth looks set to kick-start a period of employees leaving their current place of work.

While some labour turnover is good for a business, the high level the hospitality industry experiences is detrimental for sustainable growth and a booming bottom line. Organisations, therefore, must invest in talent management. After all, creating an internal talent pipeline at every level is far more cost-effective than constantly recruiting externally.

The positive news is that this can be done in a simple way and many within the industry already recognise this. Here we share just three examples of businesses who are taking the lead by adopting new approaches and implementing creative initiatives.

Lexington Catering: an apprenticeship-led approach

Adding to a now well-established graduate programme, chief executive Mike Sunley and chef director Rob Kirby (in conjunction with the University of West London and Springboard UK) designed a two-year programme, which enables 16-year-olds to gain valuable experience of working within the business and industry environment and guarantees employment at Lexington on completion of the apprenticeship.

Through this paid placement (with a joining salary of £16,000) they have access to the skills, knowledge and experience of top chefs. They can qualify in NVQ levels one, two and three, as well as receiving the benefits of a full-time role in Lexington. The apprentices have blossomed; starting in 2011, 16 have been placed on the programme with four so far offered full-time positions in the company.

This scheme will continue for the foreseeable future and, combined with the adopted schools programme (where the company nurtures the apprentices of the future with initiatives including a vegetable garden), Lexington is creating the hospitality leaders of the future and a strong talent pipeline for its business.

De Vere Hotels and Village Urban Resorts: identifying talent at every level

When Mike Williams joined De Vere Hotels and Village Urban Resorts as its people development director, he set about changing the approach to talent identification. His aim was to support the organisation's growth objectives and enable employees to drive their own career progress - found to be one of the core employee motivators.

He worked with Purple Cubed to design and implement an online talent system, Talent Toolbox, which allowed him to automate the induction, performance and exit review processes, drive company-wide communication and collaboration through the communications dashboard and obtain the thoughts, feelings and feedback of his people in a safe environment.

By adopting this approach, Williams is able to produce robust reporting around aspirations, employee happiness, risk of leav- ing and succession planning. He can quickly identify high performers and his future leaders, and create a robust internal talent pipeline allowing him to predominately recruit for new/available positions from within.

In the past 12 months, 24 rising stars have been identified. Eight are now general managers, three are deputy general managers and one is a sales manager.

The direct results of changing the business's view of talent management are evident, with a 15% increase in employee engagement and an 80% decrease in recruitment spend, saving De Vere £400,000 in year one and a 57% reduction in labour turnover. Indirectly, the company has seen a £15 increase in customer expenditure per room because of more motivated employees, and it also won this year's inaugural Best Employer Catey.

Babylon: promoting the industry within schools and colleges

Babylon restaurant manager Peter Avis has infectious positivity for the hospitality industry, reflected in his drive to encourage young talent to view the sector as a place where it's possible to forge a great career.

Several times a year Avis returns to his home city of Liverpool to share his story with school and college students. He advanced from humble beginnings as a potwasher to become a Manager of the Year Catey winner via Richard Branson's Necker Island (a reward for winning the UK Restaurant Manager of the Year, an award he now champions).

In addition, Babylon offers work experience for those of school-leaver age, demonstrating the varied roles available in hospitality.

This love of promoting the industry runs through his team, with his own employees fully committed to supporting the work experience opportunities available. Avis explains: "I always find it so positive how much young people get out of hearing what we do here at Babylon and in the sector. It's even more rewarding when a few of them do work experience with us and you find some great talent who become part of the team.

"We've hired several people who I've met and seen many more speculative CVs following the talks I do. While I can't hire them all, my team and I do all I can to support and mentor them so they become the future talent of our industry."

Emily Perry is marketing director at Purple Cubed, which specialises in helping aspirational growth businesses attract, develop and retain talented peopleemilyperry@purplecubed.com

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