The credit crunch has put pressure on the housing market and knocked consumer confidence and shoppers are now feeling the added squeeze from increased energy and commodity prices.
In tough times, staffing levels are often one of the first areas to be targeted to cut costs. However, the short-term cost benefit can be outweighed by the resultant poor customer service and loss of long-term brand loyalty. I believe that there should be an even sharper focus on enabling employees to fulfil their potential in an uncertain economic climate.
Retailers need to maintain investment in the key points of difference that sustain their brands and service offering: their existing and future employees. The 69,000 partners at John Lewis and Waitrose are the key driver of our success. They have the power to earn customer loyalty through the decisions they make and the interaction they have with customers.
Skills development is about investing in the long-term success of the business. Those retailers with a solid commitment to the future development of their employees will be best placed to trade through a downturn.
The John Lewis Partnership is absolutely committed to investing in our partners. We will maintain the staffing level required to deliver the high level of service that customers expect of us, because we want their long-term loyalty even if it costs us short-term profit. Investment in skills also ensures that we are flexible and responsive to consumer demand; by enabling partners to work across the business in the areas of greatest need, we can maintain service levels and control costs.
At John Lewis, our in-house development programme Horizons has been running for a year and is already helping more than 9,000 partners to develop their technical, professional and leadership skills. Partners will soon be able to access Horizons 24/7 and in the next 12 months 10,000 will have the opportunity to be accredited with an NVQ. Each of our branches has its own learning centre and we’ve invested more than£500,000 to upgrade them.
However, retailers cannot act in isolation. The UK Commission for Employment and Skills (UKCES) has been established to bring the Government and employers together to embed the skills agenda and to put the recommendations outlined in the Leitch Review into practice.
Sector Skills Councils (SSCs) such as Skillsmart Retail have the potential to drive the agenda by promoting investment in learning and development and supporting employers. I hope the UKCES committee looking into the re-licensing of SSCs, which I am chairing, can be a catalyst for raising the bar.
However, the talent agenda encompasses much more than workplace training. We need a holistic approach, investing in talent from pre-school through to career transition in later life.
Since 2000, Waitrose has sponsored the retail management degree at Loughborough University Business School. Waitrose managers give lectures, run workshops, host site visits, and offer student placements and graduate positions.
We also run a range of literacy, numeracy and mentoring programmes, with partners from John Lewis and Waitrose volunteering in local schools. Partners value the opportunity to support their community and the business benefits as we help the future workforce develop the skills and behaviours we want to see as employers.
The Leitch Review called for the UK to become a world leader in skills by 2020. We must take the long-term view if we are to achieve this ambitious goal.