A few years ago a senior personnel person at Tesco made a presentation to the board which demonstrated how much the company could save if it reduced staff turnover from the industry average of around 100% to just 10% or 15%.
The board was sceptical, having been brought up to believe that checkout girls were all pretty much replaceable, and if you were paying someone £7,000 a year it hardly mattered if they disappeared after a few months. However, they gave the woman making the presentation a green light to introduce the initiatives she proposed to help retain staff.
The solutions worked, staff turnover plunged, costs dropped, and the bottom line benefited. If Tesco is a £1bn profit a year operation today, at least a small part of the reason is that it spotted the hidden costs of staff turnover, and did something about it.
As competition increases, as the drive to run professional, committed operations grows (and it is the most professional operation that will be the most successful) the costs of recruitment, training and staffing become more and more important. More and more pub operating companies are going to have to face the need to professionalise their recruitment, at barstaff level, at manager level and, equally importantly, at tenant/lessee level.
The suspicion is that too many companies regard the would-be tenant or lessee as a sucker who should never be given an even break. As long as they have the money to buy into the tenancy, they don't have a record that will prevent them getting a licence and, in the words of the BII/Leeds Metropolitan University survey into recruitment, there was "breath on the mirror" they could have a pub.
The Leeds Metropolitan University survey on tenancy/lessee recruitment needs to be a wake-up call to those pubcos who regard their tenants as a resource to be exploited. The study estimated that the cost to a pub operator of replacing a tenant or lessee averaged £10,000 a time, suggesting that recruitment costs the pub industry tens of millions of pounds. That is tens of millions coming straight off profits.
The board was sceptical, having been brought up to believe that checkout girls were all pretty much replaceable, and if you were paying someone £7,000 a year it hardly mattered if they disappeared after a few months. However, they gave the woman making the presentation a green light to introduce the initiatives she proposed to help retain staff.
The solutions worked, staff turnover plunged, costs dropped, and the bottom line benefited. If Tesco is a £1bn profit a year operation today, at least a small part of the reason is that it spotted the hidden costs of staff turnover, and did something about it.
As competition increases, as the drive to run professional, committed operations grows (and it is the most professional operation that will be the most successful) the costs of recruitment, training and staffing become more and more important. More and more pub operating companies are going to have to face the need to professionalise their recruitment, at barstaff level, at manager level and, equally importantly, at tenant/lessee level.
The suspicion is that too many companies regard the would-be tenant or lessee as a sucker who should never be given an even break. As long as they have the money to buy into the tenancy, they don't have a record that will prevent them getting a licence and, in the words of the BII/Leeds Metropolitan University survey into recruitment, there was "breath on the mirror" they could have a pub.
The Leeds Metropolitan University survey on tenancy/lessee recruitment needs to be a wake-up call to those pubcos who regard their tenants as a resource to be exploited. The study estimated that the cost to a pub operator of replacing a tenant or lessee averaged £10,000 a time, suggesting that recruitment costs the pub industry tens of millions of pounds. That is tens of millions coming straight off profits.
