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When two become one

29 September 2005

Walk into a Hotel du Vin today and you'd be hard pushed to notice any difference since property firm MWB spent £66m adding the chain to its Malmaison estate last October. But while the two chains retain stylistic differences, and key functions such as marketing remain separate, other areas are being steadily assimilated - and one of those is human resources.

The company was keen not to embark on a simple homogenisation programme to bring Hotel du Vin (HDV) completely into line with Malmaison, though, and even the "standardised" staff induction programme varies for each company. While the group director of people development, Sean Wheeler, admits that Malmaison was the more established of the two brands, it was important that the merger did not diminish the successes of HDV.

"I recognise the differences between the companies," says Wheeler. "They are at different stages, and you need to work at different paces in different areas. I haven't gone in there with the idea that one size fits all. Hotel du Vin is not going to become Hotel du Mal or Mal du Vin or anything like that."

Communication was crucial to reassure staff that where there would be change it would be change for the better. One positive factor in the early days was that Hotel du Vin founder Robin Hutson, along with some of the other executive staff, stayed on to facilitate the smooth handover of the company. Hutson even did a joint roadshow around the properties with Malmaison CEO Robert Cook to inform staff of future developments and reassure them there would be no radical changes in direction.

Differences
Some differences in practice were obvious. For a start, there was no direct HR role at Hotel du Vin and a lot of the training was external. Wheeler now oversees HR across the two companies, while the responsibility for training now sits in each department with a focus on on-site training. "For me, 95% of training is on the job," explains Wheeler, who also aims to make training provision part of supplier relationships, like getting its spirits supplier Maxxium to come in once or twice a year to train bar staff at each hotel.

There were also performance differences. Hotel du Vin had a better record of internal promotions and staff retention (about 35-40%) and Wheeler is trying to learn lessons to improve succession planning at Malmaison. "I've given myself a year to get our succession planning in place," he says. "If I'm here in a year's time recruiting an external general manager, I will have failed."

A key focus is keeping talent in the two companies by promoting the increased career opportunities for staff on both sides. A combined vacancy list goes out to all hotels, and Wheeler has set up an exchange programme, publicised on staff noticeboards and newsletters, that enables Hotel du Vin staff to work at Malmaison and vice versa. To breed familiarity he has tried to bring staff from the two companies together, starting with the general managers and executive teams, and he is now moving down the chain, like at a recent group workshop on profit and loss management.

Wheeler has set in motion a series of 360 feedback sessions in which staff fill in a questionnaire on the strengths and weaknesses of other staff, who are then confronted with the findings during an informal meeting. "It's all about ownership - getting people to voice their problems and things they aren't happy with and direct their own training more," he explains.

One early discovery was that, while Hotel du Vin was very guest- and service-focused, there was work to do on instilling the leadership and management skills to get the most out of the staff. To help rectify this, Wheeler has just completed a tour of all the hotels, showing all the management teams how they can influence staff and aid their development. "The message is that the company is growing and we need to grow the people too, and that is down to you," he says.

This autumn the company intends to roll out an online appraisal tool called Talent Toolbox from training firm Learnpurple, which will form the basis of biannual staff appraisals. Having this information in one place should enable the firm to track both individual and company-wide training needs and help benchmark performance in areas such as staff turnover. In addition, staff will be able to log on to the system at any time to write supporting notes.

Other initiatives include making a quarterly pot of money available to managers, who can use it to target a business area, such as improving the mystery guest results for housekeeping. Staff bonuses will then be linked to the results. He is also working on "bottom up" initiatives. One such programme sees him working closely with a group of MBA students, who are helping the firm analyse its culture to find out what is important to staff and what they like about the companies. This is helping Wheeler find out what are the "must keep" things in the business.

Recruitment
To help fill its vacancies, Malmaison is creating a national talent bank containing details of current staff and their skills and aspirations as well as information on external candidates interested in working for the two firms. Staff who introduce a friend to the company receive £300. "It's not just HR's role, everyone is responsible for bringing great people on board," says Wheeler.

The combined company is also trying to use its larger size to build better relationships with universities; and having two brands means Wheeler is able to trial ideas in one firm before introducing them into the other, like the current chef placement programme at HDV, Culiniaire du Vin, and Malmaison's graduate recruitment programme.

A lot of the work so far has been on the softer side but next year Wheeler will look at enhancing the pensions and benefits packages open to staff. He is also looking at introducing medical benefits and discounts for other companies. Malmaison has also just conducted a study of where it sits as an employer in terms of local pay rates, ahead of the increase in the national minimum wage in October. One discovery was that it needed to increase its basic rate in Scotland. While rates vary locally, the overall aim is to make sure it is 10-20% above the minimum wage.

Investing in staff is a long-term ploy. Malmaison has just secured £108m of investment for 10 more hotels in the next three years, and staffing will be key. The first test will be the Malmaison Oxford, set to open in November, where key positions will be filled by existing staff from both Malmaison and HDV.

"That's our first real integration and that's going very well," says Wheeler. "Slowly, both groups are starting to look over the parapet and see what's going on. My goal is to be an employer of choice for both companies. We have lots to keep them here when they're in, but we could do more to get them through the door."

HR best practice

Training staff, involving them in the decision-making process and keeping them informed of changes that affect them not only increases your skills base, it boosts productivity, staff retention and morale. The Best Practice Forum offers the following tips:

Ongoing development

  • Give people the opportunity to practise new skills and knowledge.

  • Give feedback on what people achieve.

  • Correct mistakes - constructively.

  • Ensure people learn from you.

  • Talk about training during appraisals.

  • Give staff an annual training record.

  • As people get promoted, remember to train the extra responsibilities of the new job.

Staff consultation

  • Be open to ideas and suggestions.

  • Encourage staff to give their opinions and ideas about the job.

  • Discuss new ideas and concepts with staff.

  • Keep people informed of company progress, both financially and sales.

  • Keep people informed of problems that affect them - they may have ideas to overcome them.

  • Give staff appropriate authority.

  • Allow staff to make decisions about their work.

Internal communication

  • Minimise written communication to what is necessary for legal or reference purposes.

  • Keep briefings to 15-20 minutes.

  • Reward ideas that have been successful and resulted in extra business.

  • Keep noticeboards up to date.

  • Don't cancel arranged meetings with staff.

www.bestpracticeforum.org
www.learnpurple.com

Case study: BaxterStorey

Wilson Storey Halliday and BaxterSmith merged in November 2004, although the resulting company, BaxterStorey, didn't start trading until January 2005. Among the many issues to resolve was HR.

BaxterStorey was ostensibly the product of two like-minded independent contract caterers, each run by well-known entrepreneurs in the industry.

Yet there was one key discrepancy: size.

At the time of the merger, Wilson Storey Halliday (WSH) had 1,600 staff and a turnover of £68m, while BaxterSmith had 600 staff and a turnover of £25m. In addition, WSH had an internal HR department, while BaxterSmith employed one part-time HR manager.

It was a clear opportunity for WSH to dominate, but according to one of its directors, HR and training director Linda Halliday, that wasn't ever going to happen. Both companies were particularly keen to ensure that BaxterSmith staff didn't perceive WSH as dominant and understood that it was a merger.

To do this they communicated a strong message to employees, gave them opportunities to mix and pulled people together from both companies to work on projects. Equally, very few day-to-day operational changes were made, so out in the contracts it was business as usual.

Halliday explains: "The easiest thing would have been to follow the structure of WSH, but we didn't want to achieve that. What we did was take the best from both."

So, for instance, because WSH was stronger on benefits, the BaxterSmith staff have now got improved perks in areas such as pensions and life assurance.

The merger was also used as an opportunity to improve what already existed, so Halliday has introduced a new lifestyle discount scheme for holidays, insurance and retail products.

"Behind the scenes there was a lot of activity, but out in the business it has gone smoothly," says Halliday. "Nothing was dropped. More benefits were added."

The new company is obviously significantly bigger and steadily growing - although Halliday won't comment on the number of contracts it now has. "Contract numbers increase year-on-year but our culture is that we can still manage the business and our people on a personal level," she explains.

Pre-merger, in anticipation of the growth, Halliday invested in building up her team so that it could offer the same level of HR and training support to a greater workforce. She employed a full-time head of HR and a part-time training manager.

One unexpected effect of the merger has been an improvement in staff retention. Each management team was at pains to demonstrate to staff that working for a larger company would open up more opportunities for career progression. But they didn't anticipate the decrease in labour turnover: down by 10-12% on last year.

"Those things indicate that we are delivering," says Halliday. She concedes, however, that there is still work to do in bringing salary levels in the two companies in line with each other.

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