Thursday, 9 October 2008

Getting it Right: Beaverbrooks the Jewellers

Perhaps surprisingly, the next employee engagement guru to have the spot light shone in his general direction is Phil Jepson, HR Director at Beaverbrooks the Jewellers. I say it’s a surprise; it won’t be to any of you that keep up with the UK and European best employer lists. You’ll know that Beaverbrooks have been in the top ten of both the FT and the Times lists for the past 4 years now. However I know there are some of you who are thinking, “Who?” and still others who agree with the description of Beaverbrooks as “faintly unglamourous” and can’t imagine them as an employer of choice. That’s where you’d be wrong.

The fact that not everyone knows Beaverbrooks, despite them being a high street name in Britain, is not very surprising once you’ve spent some time talking to the people that run the business. Beaverbrooks might well be Britain’s most modest company. Not because they don’t think their product is worth anything, far from it, it’s just that the focus of this family business is inside – not out.

Their decision to put themselves forward for the best workplace lists was not driven by a wish for self promotion. Actually it was the idea of an assessor who came to renew their Investor in People status. He found everything in great shape but suggested that Beaverbrooks had become too insular. They needed to look outside and see what other companies were doing; to be sure they were fulfilling their own potential. So as a benchmarking exercise they entered the best employer lists and, rather gratifyingly, came 2nd on their first try.

Much as I found with Pret a Manger before them, the recruitment process is given due respect at Beaverbrooks, as a vehicle for creating a sustainable, strong brand. However, while both employers realise the importance of representing their companies well and honestly, they go about it slightly differently. Interestingly, much of Beaverbrooks’ recruitment is done through word of mouth. Occasionally they still use newspaper adverts, but never agencies or search websites. Phil admits that they tried recruiting through agencies for a while, but without very much success. It seems that with a few exceptions, most agency hires moved on very quickly one way or another.

"The people who reply to every job advert going will never be right for Beaverbrooks. It works much better when people hear about us through friends and family and think “that sounds great! Could I work there too?"

This approach provides its own first stage filtering system. Staff come to have an instinct of their own about who is right for the company and who isn’t. Phil told me that, as a rule, employees don’t introduce friends and family unless they feel sure they’re a good fit. So he knows when he meets a potential employee through the recommendation of someone already working there, it’s a recommendation he can trust.

Beaverbrooks is a family business in every sense, with plenty of examples of mums, dads, brothers and sisters all working for the company at some point or other. Set up by the Addlestone brothers in 1919, grandson Mark Addlestone still runs the business today. He’s very much hands on, visits every store over the course of a year and knows everyone by their first name. He runs the business with the goal that people will work for Beaverbrooks because they want to make a positive difference to the world. That’s a pretty ambitious goal for a company who on the surface of things exist just to decorate people, and yet...

Beaverbrooks donate 20% of their post tax profits to charity. The number used to be 10%, but when Mark asked his staff how they felt about doubling that number (given that it could go on wages), they were overwhelmingly in favour. In the retail sector where pay is poor (although it’s above average at Beaverbrooks) this is an impressively altruistic attitude. Add to that the fact that 28% of Beaverbrooks staff also donate to charity through pay roll giving and it starts to look like a reasonable goal after all. Incidentally, Mark won the Best Leadership award from Sunday Times Best Companies Awards in 2004, 2005, 2006 and again this year with 89% of employees saying they ‘had great faith in him’. Where he leads, it seems, they will follow.

This culture of trust is not something that springs up overnight. Phil talks about this business of 800 employees as warmly as if it has no more than 50 people in it. He seems to have a story about every store, but then he, like the rest of the executive team, has been at Beaverbrooks for over 30 years. That’s 30 years of getting to know the business, the people, what works and what doesn’t. And it’s not a happy accident that things have worked out that way. Beaverbrooks simply don’t recruit from outside when it comes to management positions. Only people already with the company can apply.

There are arguments for and against this kind of policy. On the negative side, one could argue that this can only lead to more of the insularity that Beaverbrooks work hard to avoid and leaves less scope for fresh ideas. On the other hand managers who have grown through the business and understand the way the company works from day one are hugely valuable. When it comes to operational efficiency, internal communications and creating trust based relationships; promoting from within is a massive plus.

Clearly, it hasn’t done Beaverbrooks much harm. It seems that taking care of their employees and empowering their employees to take care of their customers has worked pretty well so far. Customer loyalty is a key factor in the Beaverbrooks success story, and is particularly strong in the North of England where the company is based. Phil says it’s not uncommon there for customers to knock on the window and wave as they go past or to pop in for a chat.

“Obviously the staff know they’re there to sell jewellery and not stand around gossiping with everyone who comes in. But they do have relationships with their customers, and that brings great loyalty. When the time comes for one of our customers to buy the sort of emotional purchase that you come to a jewellers for, an engagement ring for example, where are they going to go? The place where they feel at home”

Putting your staff and your customers in joint 1st position on your priority list is a difficult balancing act. Phil told me that sometimes in exec team meetings they put a carrier bag on a chair and designate that the customer’s seat at the meeting. If they don’t they have a tendency to drift towards insularity again. It seems to be Beaverbrooks' greatest strength and greatest challenge that they have set themselves such high standards of staff welfare.

Following their foray into the outside world and inclusion on the best employer lists, Phil found himself approached by lots of companies offering different benefits packages for employees. After consideration Phil turned all of these offers down, and instead surveyed the staff to see what they actually wanted. Then he tailored Beaverbrooks’ package to fit.

If all this makes the Beaverbrooks exec team sound soft, think again. They’re ethical, but not soft. For example they live the Beaverbrooks ethos “enriching lives” partly by investing heavily in their staff, but they insist that staff invest something of their own too. They believe that for someone to be truly engaged in something, they have to have something of their own invested in it. Be that cold hard cash, or time, or emotion. So as a company Beaverbrooks invest in pensions, healthcare, training… but to get that stuff, employees have to invest too. Pay to get to level one of the healthcare scheme, and Beaverbrooks will pay to put you on level 2. Pay 4% of your salary into a pension scheme, Beaverbrooks will put in 8 %.

In terms of training, there’s a jewellery education diploma course that staff can ask to be enrolled on to further their careers. Beaverbrooks will enrol them and pay for the course if they believe that person is going to put the hard work into the course, however if they fail to finish the first year, they have to pay all the money back themselves. On the other hand if they go on and finish the second year, they get a lovely fuss made of them! Whatever store they’re from, both Mark and Phil travel to London with the successful employee and are there to see them pick up their diploma certificate. They also invite them to bring someone with them, husband, friend, mum – whoever.

"It’s the loved ones who suffer most when our employees are studying hard. They have to be patient and supportive, so we ask them to come down too and then when the ceremony is done we take everyone out to dinner."

This kind of gesture is not soon forgotten by those who experience it – nor by those back in the store who hear all about it when the triumphant student returns.

For many, these kinds of measures could be considered a wise way to do business. For Beaverbrooks, it’s the only way. Phil tells me that he firmly believes, that over the next ten years the companies who don’t run their businesses this way are going to get left behind – starting now. Every year, Beaverbrooks try to mentor 4 or 5 other companies, who approach them for help in this area. Phil and his team work with the leadership teams of various charities, to help them increase their effectiveness through employee engagement.

Given how strongly he feels on the subject, I asked Phil want he thought the number one contributing factor to employee engagement was. Having cursed me for making him choose just one, he settled on,

“Knowing that you have the opportunity to make a difference; knowing you will be listened to, knowing you can make change happen.”



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