Labour’s new challenge to business

Labour is going to be a major headache in 2020. No, not the political party, but something potentially just as damaging to business if it doesn’t get it right.

Staff shortages continue to blight the hospitality sector, and how to attract, retain, engage and motivate the best people is not going to get any easier. Even investors are now putting people at the top of board agendas ahead of property.

There’s no quick political fix either. It’s a long-term problem that’s going to require plenty of ingenuity and a shift in mind-set for many operators in the out-of-home market. Hoping for an influx of cheap overseas workers some time down-the-line is not going to be enough.

Even if the sector is able to attract more talent, and that’s a big ‘if’, people are going to cost more. Politicians are all hues are committed to upping national living wage levels. Political lobbying might be able to slow the process, but not the direction of travel.

With some companies willing to jump ahead and set their own higher entry-level pay above the legal minimum, rewarding staff may soon become more about business competitiveness than a legislative necessity. How long before £10 an hour becomes the industry norm for the hourly paid, driven my market forces?

The notional London Living Wage, calculated by the Living Wage Foundation to reflect the cost of living and working in the capital, is already £10.75. While no employer is obliged to adopt it or the UK Living Wage calculated for the rest of the country, increasing numbers are – even when that hits margin.

The market is getting used to competing for customers. It is going to have to have the same mind-set when it comes to its front-line teams too – and have the same commitment to communication, measuring and acting on feed-back, and creating great environments and experiences as you would for your paying guests.

To use the old Jim Sullivan adage: “Look after your staff, and they’ll look after the guests.”

A lot of this isn’t new, it’s there in the Jim Sullivan and Disney handbooks, but it does need to be put into the current workplace context and reflect the needs, aspirations and habits of today’s young workforce. Yes, that means digital. It also means that, just like consumers, expectations are going to keep on growing.

There’s help, in the form of automated recruitment, payroll and scheduling tools, of course. And where would we be without WhatsApp groups? But, the welfare of your people needs to be on a par with the well-being of your customers, in other words front of mind for everyone in the organization.

Yes, that leads into the areas of mental health at work, diversity and equality – all live issues coming to the fore across all of business, not just hospitality. Company policies on these issues really do matter. These days, it’s not just about pay, or even perks. It’s about purpose too.

It was telling when Wendy Bartlett MBE, the executive chair and co-founder of Bartlett Mitchell, the specialist contract caterer, spoke at last month’s Peach 2020 conference on the expectations when she and her team pitch for a new contract with a corporate client.

Increasingly, she said, businesses big and small are asking about Bartlett Mitchell’s social responsibility credentials. They want to be reassured that her company’s approach to a whole range of issues from sustainability and provenance to diversity and local community engagement are in tune with their own values, and their employees whom Bartlett Mitchell are going to feed.

That aspect is now critical to winning a deal, she said, and what’s why she believes her business is now ahead of many high street operators on environmental and social issues. She also made the point that being engaged in those areas also helped recruit her own staff – as, she pointed out, Bartlett Mitchell is competing in the same talent pool as the rest of hospitality.

How your staff see you and the values you have are increasingly important to the younger generations coming into employment.

The purpose of business and corporations is now at the heart of much academic debate on the very future of capitalism, with purposefulness also being taken up by some more progressive investor groups. Last November, the British Academy, the UK’s national academy for humanities and social sciences, produced a report “Reforming business for the 21^st century” arguing for the replacement of profit-focused shareholder capitalism with a system in which corporations embrace social purpose.

It was a catalyst for debate across large parts of the corporate world about the role of business in society, and how it can profitably tackle global challenges like climate change. A follow-up report this year on how to go about being purposeful has had a more lukewarm welcome, reflecting perhaps the difficulties of changing things. However, the ball is rolling.

Perhaps a more digestible tome, and one closer to home, is Winning without Fighting, co-authored by John Vincent the CEO and co-founder of Leon, the UK-based healthy fast-food brand now starting on international expansion.

The book picks up on many of the same themes around purpose and people and how they are relevant to business and have been applied to the Leon operation. At its heart is the hypothesis that business is not well-suited to militaristic metaphors about war and conflict and that fighting is fundamentally bad and absolutely not good for a positive culture or stress levels.

The point is that John Vincent is one person already bringing a new perspective to the challenges of business and in particular the issue of his company’s people. It’s about his approach to leadership and why Leon is a business with a defined purpose. Go buy a copy, it’s on Amazon.

So for some, labour may be less of a headache this coming year than for others – but it’s going to need work.