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Interview with David Fairhurst
Article Type: Interview with David Fairhurst From: Human Resource Management International Digest, Volume 16, Issue 5
Interview by Rachel Brown
Since joining Lucas Industries as a Graduate Trainee David Fairhurst has built an HR department from scratch for Transport Development Group, was the youngest group manager at HJ Heinz, and was European Director of Recruitment and Leadership Planning for SmithKline Beecham. David moved to Tesco Stores in November 2000 as Group Resourcing Director and was quickly given the additional accountability of Corporate HR Director. In May 2005 David joined McDonald’s Restaurants Ltd as Vice President of People, and in January 2007 was promoted to Senior Vice President, Chief People Officer – Northern Europe with responsibility for HR, Training, Education and Customer Services.
In 2007 McDonald’s started a petition to get the Oxford English Dictionary (OED) to change its definition of the word “McJob”. Why did you feel this action was necessary?
The OED define a “McJob” as “an unstimulating, low-paid job with few prospects, esp. one created by the expansion of the service sector”. This concerns me for two reasons. First, because it is insulting to those talented, committed, hard working people who serve the public every day. And second, because it fails to acknowledge either the opportunities for career advancement that exist within the sector, or the workplace skills it teaches to people as they progress from education into employment.
The OED justify their definition with the assertion that their role is to reflect the current usage of words. As the “Mc” in “McJob” we felt that it was our responsibility to demonstrate that given the facts about working in the sector the public would reassess their perceptions and support our proposition that the OED definition should be changed. And the facts are compelling.
The service sector (i.e. the retail and hospitality industries) employ more than one in five of the UK workforce, a proportion which has been growing rapidly in recent years. This is also the sector where many people gain their early employment experience working part-time as students or getting their first job after school or college. Indeed it has been estimated that around 85 percent of the current UK workforce have been employed in the service sector at some point in their lives.
In 2006 McDonald’s gave Adrian Furnham, Professor of Psychology at University College the opportunity to interview 100 of our restaurant staff to assess the impact that working in the sector has upon young people. He concluded the following:
Overall, McDonald’s Staff felt good about themselves, experienced strong job satisfaction, and had exceptionally high engagement levels. Indeed, nearly every staff member interviewed could be counted as engaged, whereas the typical figure is substantially lower.
Hardly “unstimulating” work then. So what about the “low-paid” element of the OED’s definition? Well, all of the staff in our restaurants are paid at levels above the minimum wage from day one. Furthermore they enjoy regular pay reviews, the opportunity to earn bonuses based on the performance of their restaurant, and discounts on everything from iPods to driving lessons via our employee discount scheme.
The average salary for one of our restaurant managers is £45,000 per year and 80 percent of them started with us as crew members. And when you add to that the fact that half of our executive team and one-in-five of our franchisees (effectively CEO’s of their own multi-million pound businesses) started their careers with us in our restaurants, the “few prospects” clause of the OED definition looks questionable too. Indeed, in 2006 The Work Foundation conducted a study into the impact of McDonald’s on the UK enterprise agenda. In the area of skills development they concluded:
If you wanted to design a vocational skills provider – for graduates and low achievers alike – to provide good work experience and wider employability skills with transferability across all sectors of the economy, and to get paid and to learn formal qualifications at the same time, then it would be hard to match a McDonald’s for its offer to staff.
In May 2007 we launched our petition to change the definition of “McJob” to reflect a job that is stimulating, rewarding and offers genuine opportunities for career progression and skills that last a lifetime – and 105,000 people signed to say that they agreed with us.
Following on, how important do you think the employer brand is in relation to employee engagement levels?
At McDonald’s we focus on three key drives of engagement: commitment, competence, and confidence. Our hiring processes mean that we recruit people that are committed to delivering great customer service. Historically, three out of four people that apply fail to achieve the required standard and are not appointed.
Our training is of the highest standards – indeed it was recently announced that McDonald’s will be awarding nationally recognized qualifications accredited by the Qualifications and Curriculum Authority – and currently our annual training budget is around £14 million. This ensures the highest levels of competence amongst our employees.
The final element is confidence, and it is here where initiatives such as the OED petition play an important role. Nothing saps an individual’s confidence more than the feeling that customers, friends and family are looking down on them. By publically standing up to those that deride them we believe that we can help to boost their confidence and, thereby, their levels of engagement.
McDonald’s recently launched the innovative family “shift-swapping” contract where close family members can swap shifts without prior notice. How successful has this initiative been, and do you have any more flexible working policies in place/planned for the near future?
The “Family Contract” has proved to be very popular with eligible employees and received recognition from both the Equal Opportunities Commission and an award for innovation from the Working Families organization. Indeed, it was so successful that in 2007 we extended the scheme to become the “Friends and Family Contract” which is now open to employees in all of our company-owned restaurants.
Workplace flexibility is something we know McDonald’s employees value highly. Our policies are continually under review and we will announce any further innovations once they have been successfully piloted in our stores.
What do you think the trends in HR will be over the next couple of years?
If you look at the history of the workplace since the Industrial Revolution – and in particular if you look at how organizations have sought to gain competitive advantage and performance improvement – you see a number of phases.
Through the eighteenth and nineteenth centuries competitive advantage came from machines – machines that did new things, faster machines, more powerful machines. By the early twentieth century the machines were working at optimal capacity and competitive advantage came from smarter, more efficient processes. But by the second half twentieth century the processes were all pretty slick and competitive advantage came from the manipulation of information and data.
The evidence is growing that we are now coming to the end of the “information age” – at least as a source of significant competitive advantage. And this raises a simple question: what major workplace resource is left to be optimized? I believe the answer is People. In 2006 CIPD research in 2006 found that just 35 percent of UK employees are “actively engaged” in their jobs – a worryingly low figure, but even more worrying is that this is the highest ever found. Most other studies put the figure at around 20 percent.
In other words, there is massive advantage to be gained by fully engaging the workforce and enabling them to reach their full potential – and in the years ahead HR should be at the forefront of helping business achieve this. It could be HR’s finest hour – but if we the discipline cannot shape up to this new challenge quickly enough the opportunity may well be snatched away from us. I think that’s probably enough to be getting on with – don’t you?