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THE NATIONAL MINIMUM WAGE AND TRAINING Research report commissioned by the Low Pay Commission >>Back to main index 4. The Impact of the National Minimum Wage on the Case Study Organisations: Thematic Analysis The impact of the NMW has varied according to sector and to local labour market conditions. This obviously affects the types of adjustments, if any, that businesses have made. In this section we explore how employers have adjusted their strategies towards the management of labour and, in particular, their training and development strategies. The analysis starts with an overview of adjustments to the NMW and then examines issues specific to training and business strategies in each sector. 4.1 Adjustments to the NMW in the two labour markets Overall, the companies in Resort Town have had to adjust to a greater extent to the NMW than in County Town and in this section, these coping strategies are discussed in relation to their training strategies. A summary of these adjustment strategies in Resort Town is provided in Table 5. In the care sector in Resort Town, all the companies were affected either directly by the NMW or indirectly by the need to maintain differentials or up-rate pay at the same time as the NMW. Coping strategies included use of part-time hours, attempting to reduce hours in non-care areas, cutting down on premium payments (e.g. for bank holiday working) and deferring promotions and training. Other strategies involved finding mechanisms for overcoming staff shortages in the summer months, when competition with the holiday trade is at its height. There was evidence of owner/managers taking cuts in earning and pay themselves. Other strategies aimed at increasing income were to seek premium funding for specialist care and continuity of funding through the block-booking of beds. Nevertheless, there were limitations to what could be achieved through the latter since local authority pay rates for beds determine income and do not cover full costs. Although there has been considerable recent change to training strategies, this has been driven by the Care Standards requirements, rather than pressures on staffing created by the NMW. The most direct influence has been the use of the Youth Development Rate, but we only found one example of this for a full-time worker. Otherwise it was used for students on placement. In the hospitality sector this town, the NMW has had a similar direct and indirect impact on staff wages. Here its impact has been mainly on the pay of non-core staff who are recruited on a casual or seasonal basis. There is extensive use of part-time hours and there is scope for employing young people in serving and chamber-maiding who are under 18 and not covered by the NMW, as well as 18 to 21 year olds on the Development Rate. All the companies were adjusting to the decline in the tourist trade, a feature of the local industry which was in evidence prior to the introduction of the NMW. In the hotel most affected by the NMW, cuts were made, the owners worked longer hours and reduced their income. Although two hotels used the Youth Development Rate and free training provided at a local college for young chefs, this was an established apprenticeship model of training and the owners felt a social responsibility for the training of skilled staff. The possibility of paying young staff on the Youth Development Rate may have contributed to their maintaining this pattern of investment, rather than shifting to the recruitment of students who had completed college courses. The third hotel preferred to recruit ready trained workers and in this instance the Development Rate served mainly as a lower pay rate for young people. In the retail sector in Resort Town, only one company was directly affected by the NMW and had attempted to cut costs by recruiting younger workers when older staff left. This was not accompanied by NVQ training and many staff were part-time, including under 18s. The owner was paying for the deputy manager to study for an NVQ level 3 in Management and the NMW may have been a contributory factor in this decision. Although one of the other stores paid above the NMW, the manager liked to maintain differentials and raised pay rates at the same time as the NMW. In this store training focussed on product knowledge and customer service skills and this was well-established when the NMW was introduced. There has been a shift here away from the employment of young people, though two were taking NVQ level 2 and were also taking additional college courses in general education. In this instance, training strategy towards young people combined a traditional approach with support for their general development. This reflected how the store positioned itself in the local market and was not related to the NMW. The third store paid above the NMW and had a small workforce, all of whom were long-serving. Its training policy focussed on product knowledge and had not been influenced by the NMW. In County Town, all the organisations paid above the NMW though in some cases it had had an indirect influence on the organisations, even if they had not had to increase their wage rates. These are summarised in Table 6. There were variations in the extent to which owner/managers were aware of the Development Rate and the exemptions for Modern Apprentices. None of them felt that these were an incentive to recruit and train staff since they had to pay the going rate. As in Resort Town, the Care Standards requirements were the main driver in the care sector and in hospitality and retail, training strategies were linked to business strategies and the local training and business support infrastructure. Although they had to adjust their training strategies to labour costs and the problems of staff retention in the local area, the NMW has not been a factor in this. We now explore in more detail the case study organisations’ training and business strategies in each sector. This includes an assessment of the influence of the NMW on their training strategies in general and their use of the Development Rate, in particular. 4.2 The NMW in the context of wider regulatory changes in the social care sector The conditions affecting social care are distinctive insofar as the sector is affected by a whole range of new statutory requirements. The ability of the homes to meet these requirements will ultimately affect their ability to continue to operate. Although the organisations in this sector are businesses, the environment they operate in is not a market in the same sense as in the retail and hospitality sectors. Their major customers are local authority social services departments which pay a fixed rate per week per resident. These rates have not increased in line with costs, at a time when there has been pressure on wages, requirements to train and assess competence and to upgrade the quality of the physical environment. There is now an extra payment for special needs clients which should have been operative since April 2002, though one home owner reported that uprated payments had not been received. Rates of payment were a source of discontent, commented on by many of the owners and managers interviewed. Although residential homes may also accept private clients, there is reluctance to charge differential rates for the same service in order to subsidise the public sector clients. Therefore, adjustments can not be made to increases in the wages bill by increasing the rates charged for the service provided. A consequence of this is that there is little slack in budgets to take account of short-term problems. Examples of this are reductions in occupancy rates which affect income; resources for staff sickness cover; the need to employ relatively expensive agency staff to ensure standards are met. Another characteristic specific to this sector is that these organisations are in competition for skills which are used not just by other independent businesses of the same size. The skills are in demand in local authority homes, in the NHS and in the voluntary and agency sectors. The organisation’s ability to recruit and retain staff is therefore influenced by national pay and conditions of service in the public sector although this is mitigated, to some extent, by the fact that labour is often recruited from the immediate local area. On the positive side, this may mean that it is possible to recruit staff who have had the benefit of training in relatively well-resourced public sector organisations who are willing to work for the pay and conditions on offer. This may also mean that they expect training and development opportunities to be part of the employment package. Equally, the convenience of working close to home and the fact that long-term relationships are built up with staff and clients may encourage staff not to seek alternative employment. A further distinctive characteristic of the sector is that the homes are providing a public service even if they are businesses and need to make a profit for their owners. Amongst a number of the interviewees, including the staff, there was a strong sense of vocation, often derived from a background in nursing, although this is not the case everywhere. The Care Standards regulations are reinforcing the ethos of care in the sector, along with the increasing professionalisation of the workforce. This marks a significant shift for some private homes which were set up in the 1980s and were seen by their owners as an investment in an unregulated sector. 4.2.1 Resort Town The impact of the NMW in social care Care is a labour-intensive sector and relatively large proportion of income goes on wages and salaries. Nevertheless, there was a perception amongst the owner/managers in both case study areas that care workers’ skills were undervalued and that it was often their commitment to their job which prevented them from taking better paid jobs elsewhere. Even in Resort Town, owner managers were uncomfortable having to pay the NMW or just above it to their staff. The owner of the Grange Home reported, ‘It’s an embarrassment to me as an employer to pay some of our staff what I pay them because they work very hard and they should have more….but I have to balance the books at the end of the day’. Here, although some of the older women workers were on the NMW, others with more responsibility were just above it and nursing staff were on a higher salary scale. Although some of the younger workers were eligible for the Development Rate, the owner felt that she needed to pay them just above it. ‘Because they work so hard and are obviously dedicated to what they are doing, It’s a small acknowledgement, just a very small acknowledgement of what they are doing’. She was also aware that low wages, in combination with recruitment difficulties made her reliant on the goodwill and dedication to the job of her staff to provide the levels of staffing required to meet the regulations. This involved staff working extra hours and not taking days off. Reductions in staffing: not an option There was some evidence of the care homes trying to reduce staffing, but this was extremely difficult given the Care Standards stipulations on staffing levels. One care home owner/manager tried reducing the hours of domestic staff but found it difficult to maintain standards of cleanliness. Another home which provided nursing care (the Home for the Elderly Mentally Infirm) had found that with new Care Standards requirements which were effective from April 2002, the home had to employ two night staff, which had doubled the night wages. As a consequence, they had to cut back on the wages bill in other ways. Examples of this were: abolishing additional payments for bank holiday working; by not promoting a well-qualified, motivated member of staff to a more senior position; and by delaying the training and assessment of a member of staff who was about to take maternity leave. Two of the Resort Town owner/managers reported taking cuts in takings. In one case the joint owners had decided that the home could no longer be run by two full-time partners. The second partner is a carpenter/joiner and was working part-time away from the home to boost his earnings. Proactive and reactive responses to a number of statutory drivers There were variations in the extent to which the homes were adopting proactive or reactive responses to the NMW and Care Standards. One nursing home manager reported that she had responded to the NMW by raising wage rates to the legal minimum. She had then raised the nurses’ and manager’s salaries to maintain differentials. The home had also been affected by the Working Time Directive and the care workers’ annual leave entitlement was raised from three to four weeks. To maintain differentials, the nurses’ entitlement was also raised from four to five weeks. Rather than anticipating the implications of the Care Standards Act for the home she was waiting to receive the instructions from the inspector, who had recently carried out an inspection. This contrasted with the Home for the Elderly Mentally Infirm and the Care Home where the owner/managers had more proactive approaches to the management of staff and training. Both paid above the NMW (thought the differential was very small at the former). In the EMI home the manager commented that the range of pressures on the business had made her aware of ‘ways around things’. She knew that free training and NVQ assessment are available for under 25s and also for older workers who are on tax credits. NVQ assessment in college normally costs £330 per person. By putting more women who were on tax credits through the course, she was able to compensate for the cost of the ones she had to pay for. It was also evident that these pressures facing the home had made her think more proactively about training and development across the board. She commented, ‘I enjoy the training. I enjoy thinking that we’re doing this for them. I enjoy putting it on and finding out what they want and we’ve always done training even twenty years ago…..but it was far more ad hoc….Nowadays they have to do so many courses and we run a training programme here anyway, so they slip in and out of it when they want, but it’s not accredited.’. This commitment to training and development was becoming infectious: ‘it just spreads….the door never closes’ she commented. She had recently brought a social worker in to run a course to prepare a care worker for a management role. The manager realised ‘it worked so well, she got so much that I couldn’t give her’ and had resolved to bring the social worker in on a fortnightly basis so all the staff could benefit. There is a training budget which was reported to have gone ‘up and up and up and up’. They were in the process of applying for the Investors in People award and had identified the need for more effective evaluation of their training. In the Care Home, there was also evidence of a more proactive approach to the management of labour and training. Here the manager was from a nursing background. She recognised that the quality of care was dependent on the quality of the staff and this was manifested in what could be called traditional nursing values combined with a developmental approach to management. She commented, ‘You can not give the quality of care if you have got two staff, bless their hearts, running ragged and a manager who’s sitting in their office and wondering why the staff are leaving’. She had a distinctive approach to staff management, preferring older married women who were more settled, reliable and compassionate. In this type of work, she felt it was important to recruit people who genuinely cared about the elderly and claimed ‘you can spot a carer a mile off’. In contrast, younger workers needed nurturing and to understand that it was not just doing the task, but the way they did it which had a bearing on the quality of care. She had used methods that she had experienced in her own training and a more developmental approach to training. Amongst the former, she reported blindfolding staff and setting them tasks so that they understood what it was like to be without sight and making them wear a wet incontinence pad so that they understood the discomfort. She said she was ‘absolutely, absolutely 100 per cent’ committed to having a trained workforce and recognised that whilst the initial layout might be costly, it meant having competent staff who could deal with a range of situations, including emergencies. Valuing staff, their skills and commitment and planning ahead In the Care Home, staff were valued for their skills and commitment to achieving high quality care of the residents. Indeed, the manager had foregone a pay rise herself because she felt it was important to reward staff. She pays above the NMW but feels that the staff are not paid sufficient to ask them to give up their free time to go to college to train. She does not use the Development Rate for adults or young people, but takes college students on placement. She uses free training for her own staff where it is available but has been doing a management certificate, an assessor’s award and business coaching herself, so she can provide training and assessment in-house. She felt that colleges and private companies could do more to offer their services to businesses in this way, which would not take the workforce away from their placement. As part of this process, she had developed a system of staff training portfolios and her own induction handbook, ‘their bible which covers everything’. However it is not just the approach to training and development which is significant here. It is the fact that training is linked to the forward planning of the business. When she knew that the Care Standards were being introduced, she familiarised herself with them and extended the building in anticipation of the new requirements. When interviewed, she was trying to anticipate the ones which will be introduced in 2007. She believed that the reason some homes were going out of business was because some proprietors did not think the standards would be introduced and were then surprised to find that they were legally obliged to adapt to them. Recruitment and retention in a seasonal labour market Some owners were finding that low wages in combination with the demands made on staff to undertake training in their own time, were making it increasingly difficult to recruit. In Resort Town, these problems were exacerbated in the summer months by the availability of employment in the holiday industry. Some home-owners took it for granted that they would lose staff during this period. Others made a point of not attempting to recruit in the summer months. They were more selective about the staff they recruited, seeking those who had a disposition for care work and would fit in with the team ethos and care values of the home. Interviews with staff in the homes confirmed that although pay rates were an issue, it was the quality of care and the work environment, along with the possibilities of development and a future career which attracted them to their employers. Staff views in the care sector It was obvious in some case study organisations that the owner/managers greatly value the work and commitment of their staff and felt they should be rewarded more highly than they are. Indeed, they made efforts to ensure that they were paid above the NMW, even if the differential was small. This was reflected in the views of the staff. A member of staff in the Care Home pointed to the intrinsic interest of the work and claimed he had been attracted to the home because of the physical and work environment and the quality of care provided, arguing: ‘it’s not the money that bothers me, it’s the care’. The Youth Development Rate: not widely used As outlined earlier, there is little evidence nationally of the use of the Development Rate in the care sector. We were only able to interview one member of staff on the Youth Development Rate and this was at the Home for the Elderly Mentally Infirm in Resort Town. She was doing five day shifts and had worked as a hairdresser and in a bar, before starting her care job. She had only been working at the home for a few months and was doing her NVQ level 2. Despite the short length of time she had been working there, she was highly committed to care as a career and wanted to gain an NVQ as the first step to becoming a social worker. Although she was aware she could get better wages elsewhere and had considered going back to bar work to supplement her income, she had found it difficult to fit in around her shifts. She felt the job allowed her to combine rewarding work with a career ladder. She pointed out, ‘this just seemed more interesting than just standing behind a shop and stacking shelves and things plus you get to know a lot from all the things they can’t do for themselves and I suppose you get a joy from helping them as well’. She was enjoying not just the intrinsic interest of the work, but the work environment in general. She commented, ‘If I keep doing the NVQ and doing well, I could be here for a long time. They’ll be trying to get me out of the door!’ Indeed, it was more common to find college students on Social Care courses on placement at homes in the care sector than young people employed on the Development Rate. Effects of the NMW where wages rates were already above it The Grange was not affected by the NMW insofar as they already paid above it when it was introduced. One indirect effect of it has been that they now up-rate their own wage rates at the same time as the NMW. They do not use the Adult Development Rate because the owner believes it would not be worth the employee’s while to go out to work. They do not use the young person’s Development Rate either although they do take students on placement from the local further education college. The role of external agencies and support services There are a number of ways in which external agencies have tried to help care homes respond to the range of pressures facing them. In Resort Town the local authority was block booking residential beds in the care homes, so that they could maintain the number of beds available and owners could plan their business more effectively. Although this was appreciated, it did not help some home-owners make major decisions about upgrading their facilities and building new blocks. There are associations for private care home-owners where they can get advice on training and the changing legislation. The area manager at the local authority has run some joint training initiatives on issues such as elder abuse. For other kinds of training private care home-owners have to find their own trainers and assessors. The local further education college runs courses in social care and supports the NVQ initiatives. 4.2.2 County Town Low wages but above the NMW In County Town all the organisations in the care sector paid above the NMW and reported that it had not been a factor either in establishing their pay rates or in their training and development strategies. Effectively they were paying above the NMW when it was introduced and appeared to pay a local ‘going rate’ for the care sector. One owner/manager spoke of ‘keeping wages in line with other homes’. Although none claimed to have been affected by the NMW, in practice the lowest rate paid by a case study organisation was only just above it, at £4.40 per hour. Others reported their lowest wage rates as £4.50 per hour and £5.50 per hour. The local labour market does not experience the same seasonal fluctuations as in Resort Town, though one care home owner reported that the boom in the retail sector, combined with longer opening hours, had affected the numbers of women seeking work in the home in the evenings and at weekends. In other respects, home owners in this area are confronted by the same constraints as those in Resort Town. One reported being ‘constantly out of pocket’ because a £20 per week increase in local authority rates for residents had not materialised. They could not compromise on the quality of care and also had to meet the NVQ standards for care staff. This was reflected in staff perceptions: care workers reported that they could earn considerably more if they wished. One member of staff at The Rest Home, who was being paid £5.45 an hour as a deputy manager, worked 46 hours and 53 hours on alternate weeks. She said she knew she could earn more but was happy where she was. Her sixteen year old son was earning £8.00 per hour doing a Saturday job in a local supermarket. A worker at The Residential Home (Learning Difficulties) was earning £5.00 per hour. She thought she could probably get £6.50 an hour elsewhere but had not moved because she liked her job and wanted to take NVQ level 4. The Development Rate: not an incentive for recruitment None of the organisations in the care sector in County Town used the Development Rate either for young people or for adults. There seemed little evidence of age-related pay in this sector and this was seen as an issue of equity. One owner reported ‘we treat everyone – eighteen or not – the same as they do the same work’. Given local labour market conditions, they felt they would be unable to recruit adults at the Development Rate. One manager reported anecdotal evidence of homes in the area paying the Development Rate and below to ‘immigrants and people who have no skills, or language or learning difficulties’ but we have no data from our research to confirm this. Equally, there was little evidence of reduced pay rates acting as an incentive to the employer to train staff or for staff to expect pay increases on completion of qualifications. Workers reported that ‘training is part of the job’ and that the possibility of increased pay linked to training had not been discussed their employer. Pay rises had been related to promotion rather than to the achievement of qualifications, such as NVQs. Sources of advice and support on training In County Town, as in Resort Town, the main drivers for training were statutory requirements affecting the care sector. Organisations had a range of sources of expertise and support on which they drew. In the Rest Home, the owner/manager was responsible for training. Blue Cross, a nursing home organisation, had provided advice and a training company providing in-house courses had also been used. Although this may be a cost-effective method for providing training and assessment, the member of staff interviewed reported that the assessor had left part-way through the assessment. (Her own preference was for day release at college). All the organisations reported the usefulness of the local authority’s support for training in the care sector, both in terms of resources and as a source of advice. They particularly valued having one person as their ‘first port of call’. To some extent, the organisational specialisation affected the sources of advice which were available. The Day Care Centre is actually in the voluntary rather than the private sector and has the status of a registered charity. It is a small organisation without a specialist training department, but the manager reported drawing on a network of other voluntary organisations for help with training, such as Help the Aged. According to TOPSS, a characteristic of the voluntary sector is the tradition of working co-operatively. An additional source of information had been a UNISON bulletin. The local further education college was also reported to be ‘a great resource’ by the Day Care Centre. Size also contributes to an organisation’s capacity to develop expertise in training. The Residential Home (Learning Disabilities) was the largest of the care organisations in County Town, with a total staff of 41. A relatively high proportion of staff here are full-time and the organisation has a formalised Human Resource Management function. There was a personnel officer and a training officer and two specialist trainers in Non-Abusive Psychological and Physical Intervention (NAPPI). One of the directors, a psychiatrist, conducts training sessions for staff. It was reported that there was no cost restraint on training and resources were allocated on the principle of ‘fair distribution depending on need’. Staff were trained to NVQ level 3, reflecting the higher level of qualifications required where staff work with young people. Some training was undertaken on-the-job by County Town hospital and one of the employees interviewed was training to become an NVQ assessor. Role of external agencies In County Town, a significant development has been the local authority decision to fund a training and development officer for the independent and voluntary sector in social care and health to help local organisations meet the statutory requirements. The officer was preparing to meet the challenges for the future in the sector. This included: the need to collect accurate workforce data on training; to plan training programmes and obtain funding for them; and to work towards the General Social Care Council’s targets for individual registration of care workers by 2005. In order to do this, a sub-group of employers had been created to work together to develop the plans, share resources and make joint bids for resources. He also arranges bi-monthly meetings, workshops and seminars: produced guides and newsletters; and serves as the primary conduit for information about training in the sector. As an example of this integrated approach he was trying to develop, he cited an instance where he had facilitated the joint employment of a full-time member of staff across two homes to help meet standards. 4.3 The hospitality sector: differentiated markets and customer service as drivers Unlike the care sector where organisations have little scope to vary their charges and are constrained by the need to meet statutory requirements on care standards, there has been greater scope for businesses in the hospitality sector to adjust to the NMW either by increasing sales, raising prices or by decreasing costs. Nevertheless, the state of the local labour market has a significant impact on the extent to which the NMW has been a factor influencing business and staffing decisions. As might be expected, it has had a greater impact in Resort Town where some hotels had been paying near or below the NMW when it was introduced. Even where hotels were paying above it, they had to increase their wage rates to maintain differentials. In Resort Town we also found examples of case study organisations using the Youth Development Rate. In County Town, in contrast, none of the owner/managers interviewed reported the NMW having an impact on their wages bill since they were already paying above it. Nevertheless, there have been some less direct impacts of the NMW and other new regulations such as the Working Time Directive which have resulted in managers reassessing some of their HRM strategies. In both localities, organisations were developing strategies to meet business challenges, in which staffing and training and development played a more or less significant role. We explore the extent to which wage differentials based on age and the achievement of qualifications had a role to play in this and, in particular, their impact on the recruitment of young people. 4.3.1 Resort Town Business challenges: the changing nature of the hospitality industry Resort Town is a town full of hotels and guest-houses but many have gone out of business since the 1990s. The reasons for this are related to the changing nature of the holiday market. After the war the British tourist industry boomed and Resort Town catered to the domestic market. However foreign holidays at affordable prices have taken away the town’s traditional customers and many holiday makers who continue to come increasingly stay in holiday camps rather than hotels and guest houses. The holiday season is now shorter and runs from May until the end of September, rather than from Easter until October. Hotel and guest-house owners have had a variety of responses to the decline in the tourist trade. Many hotels have been converted for other uses (such as care homes) and those that have stayed in business have had to diversify. Catering for the offshore oil and gas trade has been one response and this clientele has to be housed and fed to a reasonably high standard. Coach holidays, disabled holidays, specialised holidays have all been strategies for survival whilst other hotels, particularly those away from the sea front, cater for business customers. There are few chain hotels and only one hotel has a swimming pool and gym facilities. The three case study hotels had adopted different business strategies in response to the decline in the holiday trade. The Southern Hotel, a family owned hotel, identified its main business challenge as remaining viable throughout the year and had expanded into a range of markets including coach tours, speciality tours, clubs and conferences. It is adapted to the needs of wheelchair users and this brings in additional trade. They also offer a budget Sunday luncheon which is aimed at local trade. One consequence of these developments was the need for family members to work longer hours. The Seafront Hotel is also family owned and run and had originally opened just from April until October. In the 1960s it began to open year round in response to the market in the offshore oil and gas industry and had established itself as a three star commercial and tourist hotel. The owner/manager reported that business strategy had evolved over the years on a trial and error basis in response to the market and this had resulted in a significant investment in refurbishment. They were now also providing for the conference trade and events such as dinner dances. Both hotels consider that the quality of their cuisine is significant to their market position and prepare all their food on site. As a consequence they both put considerable resources into the training of cooks and chefs. In contrast, the Quay Hotel is the only three star hotel not on the seafront, which is run by a manager on a contract. The hotel had had a chequered history in the 1990s. It had been part of a national chain which had been taken into receivership and had then been owned by a series of private buyers who wanted a short-term return on their investment. As a consequence there had been no medium term business strategy and investment in the premises. The new manager had been recruited because of a perceived need to refocus the market strategy and to refurbish the hotel to improve its standard. The manager is repositioning the hotel in relation to the year round business and conference trade, rather than to the holiday market. He felt that targeting this market required focussing on consistency in the quality of service. He commented, ‘you never remember the hotel for the clean sheets and the housekeeping, but you do remember the hotel if you’ve had a duff steak’. Although he recognises the significance of the restaurant to the quality of the customer’s experience, he relies on buying in good quality prepared food rather than preparing the food on-site. Although in-house training is significant, particularly since a number of new staff have been recruited since the manager started early in 2002, relatively little use is made of externally provided training. A seasonal industry and demand for labour The variability of client demand affects the companies’ demand for labour and short lead times can make workload planning difficult. The traditional response has been to have a core of staff employed permanently and to supplement this with temporary and casual labour. The Southern Hotel reported having 40 permanent staff and recruiting more in the holiday season, particularly students and younger people who are employed as domestic staff and waiters and leave at the end of the season. The Seafront Hotel sought to retain staff in key positions, but expected high levels of turnover at the margins, especially part-time food service staff and temporary workers recruited for peak periods in the summer and at Christmas. Given its orientation to year round business trade, the Quay Hotel has less seasonal fluctuation in its demand for labour. The core and periphery workforce model used by the hotels was reflected in training strategies. Much of the training for temporary and seasonal workers is informal and on the job, except in areas where there are statutory requirements such as Health and Safety and in food handling. Although there is craft training for staff in the kitchen areas, the extent to which hotels invest in this is dependent whether they prepare their own food or use pre-prepared food in their kitchens. Since there can also be high levels of turnover in this area due to the pattern of working hours, owners see this as a cost rather than an investment. This also applies to training in other areas such as administration and reception. The impact of the NMW Hotels and hospitality have traditionally been low wage sectors of the labour market. The minimum wage has had an effect in this sector, although this varied between the hotels. At the Southern Hotel, the NMW was introduced at a time of fluctuating income and the family took a cut in takings to keep the business going. They paid qualified staff above the NMW to retain them, but used it for part-time, casual and seasonal staff. They had responded in a pragmatic way, making cuts in expenditure where possible. Here, the Youth Development Rate was used for young people undertaking chef training. Business had improved in 2001 since, unlike other regions of the UK, this county had not been affected by the outbreak of foot and mouth disease. At the Seafront Hotel, both core and peripheral staff were already paid above the NMW when it was introduced. For this company, its impact had been in formalising a pay review each year at the same time as the up-rating of the NMW. In other words, its main impact had been in raising awareness of basic rates of pay and in providing the company with an incentive to maintain differentials. In this way, indirectly, it had increased wage costs. There were trainees at the hotel who were undertaking their NVQ level 2 in catering, but they were not employed by the company whilst they were aged 16 and 17. At age 18 they went on to the Youth Development Rate and started their NVQ level 3. At the Quay Hotel, the owner claimed that the NMW had not affected the company’s approach to employment although he thought that every organisation would be affected by it. Age-related wages appeared to reflect a small differential over the NMW: 16 to 18 year olds were paid £3.50 per hour, 18 to 21 year olds were on £4.10 and the lowest rate for over 21s was £4.25. The owner said that he was paying the Development Rate and the NMW for adults, although the rates quoted were slightly higher. He took the view that if he could recruit good staff on the rates he paid, there was no need to reconsider wages unless he was faced with retention problems. Kitchen staff were paid more than other staff and heads of departments were on incentive schemes (linked to profit or sales), as a retention measure. The relationship of wages to benefit levels One of the characteristics of the local labour market in Resort Town is the high level of unemployment, which fluctuates on a seasonal basis. As a consequence, the extent to which people shift between temporary employment linked to the holiday industry and claiming unemployment and other benefits is significant. Although the owner of the Southern Hotel said that all her employees were on the payroll, she implied that employment is available in the town for cash in hand payments. The owner/manager at the Seafront Hotel also believed unemployment had an influence on local wage rates, insofar as people would not work unless they were paid more than benefits. He argued that the level of unemployment benefit effectively served as a minimum wage prior to the introduction of the NMW. A need for ‘personable staff’ Although all the hotels could potentially employ local unemployed people in their hotels, they were not seen as a suitable source of labour. The owner of The Quay argued, ‘they wouldn’t be able to do what we want them to do so they are not part of the equation’. At this hotel a commis chef had been taking an NVQ as part of the New Deal, but the manager felt he had found it difficult to meet the standards. There was a distinct preference for people who had a pleasant manner and were well-presented. This was expressed in a number of ways. For example, the owner/manager of the Southern Hotel suggested that some 16-18 year olds were not suitable because ‘they can’t keep up with the washing and keep themselves in a suitable condition to work’. This was not just a question of appearance, but also accepting anti-social hours and the requirement to work flexibly. The owner of the Seafront argued, ‘you can always get bodies, but finding good staff who are prepared to work however we want them to work and when we want them to work is almost impossible’. Similarly, the manager of the Quay explained that he looked at job applicants as a customer would, considering their initial approach, how they dressed at interview and presented themselves. This was especially important in areas such as reception, but even with waiting staff, interactions with customers are important. A receptionist confirmed that these were the qualities that were needed for the job. She enjoyed working with people and felt that she had a good telephone manner. Apart from learning to use the computer, she felt that communicating with people was something that was not easily taught. She enjoyed the responsibility of the job, including handling cash, and the administrative side of it as well, and hoped to move into management eventually. Nevertheless, although managers say they value these skills, they are not well-rewarded. She was being paid just above the NMW and it was the lowest paid job she had held. She felt that reception work was more interesting and could take her further in a career than the clerical and administrative jobs she had held previously, which had been better paid. A traditional apprenticeship model for food preparation There was evidence in this sector of the operation of a traditional apprenticeship model for skilled trades, particularly in food preparation. This was the case in the two hotels which prepared all their food on-site. At the Southern Hotel there were two trainee chefs, both on the Youth Development Rate, who were taking their NVQs at the local further education college on a day release basis. They combined this with their shifts in the kitchen under the supervision of the owner’s husband who was the chef director. In this way, the young chefs received considerable support for the development of their skills in the kitchen, whilst the college courses were free of charge to the owner. The Development Rate was seen as off-setting the cost of the organisation’s investment in time and effort in the young people and their days spent at college. At the Seafront Hotel, the owner felt that staff in key positions needed ‘broad skills’ rather than the capacity to perform a limited range of tasks. As a consequence the hotel trained two or three cooks every year because that was the only way they could assure a sufficient number of cooks with the appropriate skills. They worked on the assumption that not all the trainees would complete their course, because many do not fully appreciate the long and anti-social hours they will have to work. In this hotel, there was a sense of social obligation to train above the organisation’s own needs. The owner maintained ‘I almost feel it’s a responsibility ….if everyone just keeps going to the labour market and saying “we want chefs, we want chefs” and nobody’s training them, then you have a problem’. He saw this as a cost to the hotel because initially they need a considerable amount of supervision. He also felt that the funding mechanisms for further and higher education were encouraging young people to go into full-time study. As a consequence, too few are gaining a trade which combines supervised practical experience with study. At this hotel the trainees were not employees for their first two years. They were doing their NVQs at the further education college and worked at the hotel on their job placement. They then moved on to the Development Rate as employees at 18 in their third year. A male trainee chef employed on this basis had originally come to the hotel through a work experience placement on food technology course at school. He enjoyed the placement and was pleased to be offered the chance to return when he finished school. He had his NVQ level 2 and was starting level 3, and explained that he was getting the best of both worlds. ‘I’m getting paid for something I like doing, whilst getting my education’. He enjoyed the varied job environment, the interactions with customers and the need to plan ahead for the next day. He felt he was continually learning. He was not attracted by other, better paid jobs in the locality and felt he was being given a very good start in life. He wanted to stay with his employer and recognised that even if this was not possible, his training gave him transferable skills which would allow him to travel and ‘do my catering’. A targeted approach to training for other core staff Other staff are trained on a day release basis but usually only after they have built up a period of service with the company. At the Southern Hotel, the owner encourages staff to train to NVQ standards if they are good workers who seem likely to remain. This could be considered as a modified form of apprenticeship. The other hotels focussed their investment in off-the-job training on staff with service or by recruiting them direct from college courses. At the Seafront Hotel, a maintenance worker had done an NVQ at college in painting and decorating to increase his range of skills. A woman in the reception area had started working part-time whilst doing a reception course at college and had then been recruited full-time. At the Quay Hotel virtually all the training was in-house, although the manager sent a couple of staff on Welcome Host training organised by the council and a further two were taking NVQs. His view was that staff should ask for training opportunities themselves and should find out about courses as a means of testing their commitment. Relying on the labour market for skills The Quay was not training any chefs on day release, since the kitchen staff had been recruited with skills. The manager preferred having more mature staff who are ‘of the old school and remember how it should be’. He said he was ‘not a fan’ of Modern Apprenticeship, the New Deal or having school children on work experience. Although the quality of food was recognised as being important to repeat business, he argued that there had been a lot of deskilling in the industry through advances in prepared food products. The Adult Development Rate None of the case study organisations used the Adult Development Rate. The owner of the Southern Hotel was not aware of it but said she would not have used it anyway. The patterns of investment in training in the case study organisations suggest that in a sector with high levels of turnover, significant investment in staff training only takes place after staff have worked for the organisation for some time. The possibility of employing new adult recruits on the Development Rate does not appear to serve as an incentive for investment in their training, since owner/managers prefer to invest in staff with longer service. This can be seen as a feature related to the extensive use of seasonal and casual staff and high levels of staff turnover amongst non-core staff, which employers find acceptable given their need for labour flexibility. 4.3.2 County Town Business challenges: seeking niche markets In contrast to Resort Town, the hospitality sector in County Town has not been reliant on the holiday trade and nor does it experience such a seasonal demand for its services. All three hotels have distinctive niche markets and this has affected their approach to the management of the workforce. All the companies have to recruit staff in competition with a range of other employers in a local labour market where there is a low level of unemployment. All of them pay above the NMW. The two larger hotels had both opted for business strategies which established them in the business market as well as in providing quality services to local customers. The Country Hotel, an independent hotel just outside County Town, was geared towards the conference and training market, providing facilities for corporate clients to do their training. These included lecture and seminar rooms, bedrooms, food, hospitality and leisure facilities. They were in the process of shifting from a five day a week to a seven day a week operation to accommodate weddings and social events. The Town Hotel, a family-run hotel, had a market strategy to deliver ‘the best service we can to sustain our niched business aimed at the cream of the commercial sector’ during the week and family functions at the weekend. It is audited by the AA, the tourist board and Best Western. The owner put the success of the business down to advice received 18 years previously from a business counsellor, a successful hotelier himself, which had been arranged and paid for through the government’s Small Firm Service. The counsellor had helped the owner assess his business needs and strengths and provided guidance, a process which he described as ‘a totally and utterly remarkable experience’. The Central Hotel, though much smaller, was also in a niche market and appeared to cater for corporate as well as private clients. Its clients were doctors, solicitors and other professionals on secondments and training courses but they also provided accommodation for emergency homeless families, presumably referred to them by the Social Services Department (for example, following a fire). The owner was in the process of selling it at the time of interviewing. Wages in the hospitality sector None of the hotels paid the NMW and none felt that it had had an impact on their business strategy. At the Country Hotel, the lowest rate was £4.00 per hour for a 17 year old and this rose to £5.15 at 18. The organisation is in the process of shifting towards monthly rather than weekly payments. At the Town Hotel, an employee reported being paid £3.60 per hour when she joined the organisation in as a part-time cleaner in 1997 and, having obtained an NVQ in food preparation, was now being paid £6.00 per hour. At the Central Hotel, the lowest rate was £4.75 for a Saturday girl. Although this suggests age-related wage rates do operate, wages also appeared to be related to qualifications. A number of staff reported receiving increased wages on obtaining a qualification, although they were not aware of the wage-fixing mechanism. One member of staff commented that it had had been ‘a nice surprise’ to receive an increase on obtaining her NVQ. Factors contributing to training strategies Since all three hotels aimed their business strategies at niche markets, training and development strategies were of significance to the skills needed to provide the quality of service sought. The most highly formalised strategy was at the Country Hotel which, with 50 full-time and 80 part-time staff, was by far the largest organisation. Here there was a Group Training and Development Manager and the organisation had achieved the Investors in People (IIP) award. All new members of staff undergo a systematic three month, in-house, induction training into the organisation and into their own department, which is run in parallel. A range of management tools were used to identify and record staff training needs and drew on job descriptions, performance reviews, a training handbook and a range of printed and audio-visual material. Although there was not a training budget, as such, training needs were identified through a consideration of business needs, individual needs and statutory requirements. The company used external standards where necessary but also had its own internal standards in each department. Although there was an emphasis on the training of managers, all staff, including part-timers, are also offered the company’s standard training. They encourage full-timers who are under 24 to take NVQ training and also offer opportunities to older staff. Examples of younger staff undertaking off-the-job training were an NVQ in catering at a further education college and a number of staff who were taking NVQs in hospitality, sales and administration with training and recruitment agencies (Hospitality Plus, Starting Off and INTEC). These agencies recruit and train people using government funding and so the hotel is also able to recruit trained staff through them. At the Town Hotel, training was less formalised and the owner and his business partner take responsibility for training. The owner felt that his experience in the industry meant that he was well-placed to identify who would benefit most from training. He uses the local further education college as a source of off-the-job training. The Head Chef was studying for his Hotel and Catering International Management Association (HCIMA) qualification and the company had agreed to pay for another manager to do a degree in Business Management. The manager was not enthusiastic about providing work experience for young people, claiming they just got in the way. However, if they found the right person who wanted a full-time job and to learn about the industry, they would fast-track them into management. He gave the example of a junior chef, a woman, who was being trained for NVQ level 3 in kitchen larder, and a morning washer-up who gone to college and was now a qualified breakfast chef. At the Central Hotel, the small size of the organisation (six full-time and four part-time staff) meant that the owner took responsibility for decisions relating to training. The main focus was on induction, training on-the-job and statutory requirements in basic hygiene, health and safety, food handling and control of substances hazardous to health (COSHH). Students: a source of ‘personable young people’ Relatively few young people were employed by the hotels and the traditional apprenticeship model which operates for the young chefs in Resort Town did not appear to be present in County Town. The Youth Development Rate was not used in any of the case study organisations. Indeed, one owner commented on the difficulties of recruiting committed young people. He complained that a high proportion of people who answered advertisements were ‘ill-educated, have no social skills, do not come across as clean and sensible, or are just plain ordinary, in the old-fashioned sense’. In contrast, the pattern seemed to be one of employing young people (both under 18s and 18-21 year olds) on a part-time basis, rather than as full-timers. Some of these were students taking ‘A’ levels and university degrees, whilst others were studying hospitality at the further education college. As far as the former are concerned, it could be argued that they conform to the model of ‘aesthetic labour’ identified by Thompson and Warhurst (2001) as being significant in many sales and customer service occupations. As relatively well-educated young people, they possess the self-confidence, communication skills and qualities of personal appearance and dress that the organisations seek in providing a quality service to their customers. The second category, the students on hospitality and catering courses, are more likely to be orientated towards a career in the industry. Insofar as they are full-time students, they represent less of a cost to the employer than a full-time member of staff on a day release course. In both cases, their availability for evening and weekend work provides a degree of flexibility to the employer at peak periods of labour demand. In County Town, it appears that young people are employed primarily as part-time, peripheral staff, rather than as young people with a future career in the industry. This may partly reflect increasing participation rates in further and higher education and the reduction in the cohort of young people entering the labour market at 16. In recruiting young people after they have achieved their qualifications, rather than at age 16, the industry is shifting some of the costs of training onto the education system. The hotels all invest in staff training and used recognised qualifications through day release at college. The emphasis of this investment is in slightly older workers who have already shown some commitment to the industry. Recruitment and retention All the organisations reported difficulties in recruiting staff of all age groups. This was particularly the case for people with qualifications and the training manager at the Country Hotel mentioned the image of the industry and the absence of a career structure as issues. In this environment employers had to pay above the NMW to recruit and retain staff. The option of paying young people and adults at the Development Rate did not enter their calculations. Local authority support for the conference trade The hospitality sector in County Town combines business with leisure tourism and this affects where individual companies situate themselves in the market. The town‘s central location and good communications network makes it an attractive site for the business conference trade and this is supported by a county-wide conference service which provides a free venue search for conference organisers. 4.4 Retail: differentiated markets, staff recruitment and retention as issues Like hospitality, retail is a sector where businesses can adjust to the NMW either by increasing sales, raising prices or decreasing costs. As in all three sectors, the state of the local labour market has a significant bearing on the extent to which the NMW has affected business and staffing decisions. It has had an impact in Resort Town, where many businesses were paying near or below it prior to its introduction. Given the significance of the idea that ‘your people are your brand’ in this sector, some retailers have had to adjust their wages to maintain differentials in relation to other retail outlets to maintain their relative status on the high street. In Resort Town the minimum wage has had an impact on retail trade and the trade is in competition with other low wage sectors for staff. We encountered one example of the Youth Development Rate and none of the Adult Development Rate. As might be expected, the NMW has had little impact in County Town where wages in the local labour market are higher. Training has not traditionally had a high profile in retail and there are fewer statutory requirements affecting this sector than in either social care or hospitality. In both localities, organisations have been using training to meet their business strategies but in this sector there is much greater reliance on in-house training and product knowledge than use of external providers and qualifications, such as NVQs. 4.4.1. Retail in Resort Town Seasonal fluctuations in the retail trade As far as the retail trade is concerned, Resort Town has two sets of customers for retail goods. Holiday-makers used to provide a solid market but in recent years this has declined, with an overall reduction in numbers and those that do come stay in holiday camps and self-catering accommodation. The camps are very well equipped to keep patrons on site. Local customers are less likely to be attracted to the tourist end of the market but buy staples. Consequently national supermarket chains have good market prospects whilst other smaller, local shops have suffered. The NMW and business challenges in the retail sector Until the 1970`s Resort Town was a town of small retailers. Now the city centre in Resort Town is dominated by chain stores. One or two local stores remain including the Department Store. In the town centre itself the Market Gate shopping centre was built in the 1970`s. This had become rather shabby over the years and recently a refurbishment has taken place but retail spaces remain empty. The retail sector was in decline in the 1990s and some large retailers, such as Debenhams, moved away from the town. There are also a number of charity shops occupying retail space. More recently, retail has become an area of employment growth with the opening of new national chain stores. The Job Centre reported that a new Tesco store was advertising jobs at £5.10 per hour and this may affect pay and staff retention in other retail areas. Although retail is typically characterised as a sector of high volume sales, low profit margins and high levels of staff turnover, the three case study organisations did not conform to this stereotype. Despite extensive use of part-time staff on low pay, levels of staff turnover were reported to be very low. This may in part reflect the family-owned nature of the businesses, particularistic management styles and the market niches in which they have located themselves. The Department Store is a long-established (since 1850) family-owned firm which aims to provide the best customer service on the high street and was described by the owner as ‘not old-fashioned but perhaps a little paternal’ in its style of management. The NMW influences pay levels in the sense that the owner aims to maintain differentials and has up-rated wages at the same time as the NMW. He explained that you can not maintain the image of being ‘the best on the high street’ if you are paying the NMW. Despite the decline in the retail trade in the town, this store benefited from the closure of Debenhams, which effectively eliminated their main local competitor. As a result the store is now the main supplier for a range of branded goods and has experienced a period of growth in sales. The store stresses the quality of the branded products its sells and the interpersonal skills of the staff, requiring high levels of literacy and numeracy. It has a smart dress code and staff can buy their navy suits at half price in the store. The workforce is made up of approximately 75 staff, though about one quarter work for concessions, such as Windsmoor and are not directly employed. Of those directly employed, thirteen are full-time and the remainder are mature women on part-time contracts. There are also a number of casual staff who constitute a pool for recruitment. The organisation is a member of the Association of Independent Stores, which provides it with a number of benefits, which contribute to its business strategy. These included shared information on customers and growth, advice and the provision of training, and monthly ‘mystery shopper’ reports on the quality of customer service. In contrast, the Newsagents is located in a residential area and is also a convenience store. It opens from 8.00 am until 8.00 pm, but work on the paper rounds starts at 6.00 am. The owner felt under threat from local authority policies as well as the opening of the new national chain stores, both for trade and potentially staff as well. He complained that CCT cameras placed in the town centre to deter shop lifting has had the effect of driving crime out to the outskirts and reported catching five or six shoplifters a day in his shop. The NMW has had a significant impact on his wages bill. Profit margins are small in the shop and the owner pays the NMW or just above it to all staff eligible for it, the one exception being the deputy manager. As a consequence, wages had increased whilst income had remained the same. There are only two full-time staff and between twelve and fourteen part-time staff. In order to reduce costs, he had attempted to employ under 21s on the Development Rate when older staff had left. He had found the younger staff to be less reliable and more inclined to move to more trendy shops in the town centre. All his staff were on the wages bill, although he suggested that other outlets paid cash in hand. In contrast to both of these retail outlets, the owner manager of the Sports Shop claimed he had not really been affected by the NMW and expressed his support for the idea that retail staff should be properly paid. All his staff – three full-time and three part-time – were long-serving and were already paid above the NMW when it was introduced. Like the Department Store, he was located in the quality end of the market, aimed at the tourist trade as well as the local population. The shop was located centrally and was opposite another sports shop. The owner identified his business as an independent, ‘proper’ sports shop as opposed to a ‘fashion sports shop’ selling inferior products as part of a chain. As a consequence, product knowledge, usually provided by company representatives, was seen as essential to keeping staff up-to-date and as ‘leaders in sports retail’. Training and business strategies In both the Department Store and the Sports Shop training in product knowledge was considered to be significant to business strategies. In the former the store has an ethos of providing excellent customer service and training is carried out locally, often on an in-house basis. Mystery shopper reports, provided by the AIS, and staff appraisals are used to identify training needs particularly in the customer service area. The store also has its own in-company trainer. Some statutory training takes place in health and safety, and lifting and handling. There is some training of managers and buyers but not necessarily locally. In the Department Store there has been a shift from recruiting young workers and training them for the shop floor to recruiting more mature, part-time staff. Nevertheless, some young people continue to be recruited and the store was training two young people in the NVQ level 2 in retail, bringing an assessor in from the local college. They attended college courses in key skills (Maths and English) one afternoon a week and had also taken a British Shops and Stores Association course. They earned above the Development Rate. A young employee interviewed expressed her appreciation of the college courses and intended to take a further NVQ. She saw this as a means of catching up on what she had missed at school through lack of interest. She was committed to working with the company, liked the smart dress code and the idea of working for a family owned firm where she knew who the boss was. Clearly these factors were contributing to staff retention. Usually in this store, the adult rate was paid at nineteen. Beyond this, differentials are maintained internally, so that longer serving, older staff receive more than new recruits. The objective is to make them feel valued and that they have a career progression route. At the Sports Shop, customer service training was primarily linked to product knowledge and the ability to advise customers on their purchases. The main source of training was either the senior staff or product representatives. Given the small size of the company, there was no formal training function or budget. Rather, it was a case of keeping abreast of new developments in the market and sharing the information amongst staff. The Youth Development Rate was not used in the shop and only one member of staff, an 18 year old employed on Saturdays, could potentially have been eligible for it. The owner’s view was that recruitment of the right calibre of staff was essential and this meant finding someone who was ‘personable, has people skills and is intelligent enough to apply their training information in a range of situations’. In contrast, the Newsagents did use the Development Rate for young people, though this had primarily been as an adaption strategy to the introduction of the NMW and a means of reducing outgoings rather than as a mechanism for supporting training. A young member of staff, a student who lived locally and studied in the local county town, was working 16 hours a week at weekends. She said she was receiving no formal training and had picked everything up on the job. She felt she could ask the owner for any help that she needed and liked the shop, the owner and the fact that it was near her home. She thought she could probably earn more elsewhere but had no intention of seeking another job locally nor of making a career in retail. Convenience and the social relations of the workplace were contributing to staff retention in this instance. Most of the training in the store is learned on the job and although lifting is important, the owner said he did most of it himself. Because many of the employees are part-time or have other jobs as well, the owner believes that they are not interested in training. Nevertheless, where appropriate he does invest in staff training and this was the case with his deputy manager who had completed an NVQ level 2 and was taking her NVQ level 3. Infrastructural support for training Of the three sectors covered in this research, the sources of support for training available to employers in the retail sector seemed to be the weakest. This reflects the relative absence of statutory training requirements in this sector, as in the care sector, and of a craft apprenticeship tradition, as in parts of the hospitality sector. There was evidence of the use of the resources of the Association of Independent Retailers in the case of the Department Store and product training by suppliers in the case of the Sports Shop. They appeared to serve their purpose in supporting the stores’ respective market strategies. Interestingly, both the Department Store and the Newsagents were training staff for NVQs in retail through the local college, despite their differences in market segment and position. In the former, this was used for young people and in the latter for the deputy manager. The local college reported that the courses in retail are not over subscribed. 4.4.2.Retail in County Town Recruitment and retention in a competitive industry None of the case study organisations paid the NMW in County Town and the going rate was cited as £5.00 an hour, although we did come across 18-21 year olds who were paid £4.85 an hour. In all the case study companies, there was an awareness of the going rate of pay in retail in the local area. Two of the organisations, the Leather Shop and The Florist, said that retention could be a problem. They claimed workers often felt that ‘the grass was greener on the other side’ and would move to another employer for a matter of pennies. Although the owner of the Leather Shop was not able to pay more because there was not a lot of work and employees were ‘just hanging about to serve customers’, he felt that this was not just a matter of pay. He expressed an interest in knowing how he could deal with the issue of staff retention. It is interesting to note that retention was cited as an issue in the two smaller shops, but not in the larger, more up-market Clothes Shop. This in part reflected their higher rates of pay: the lowest rates here were £5.70 an hour and not many employees were on this. However, it also reflected their recruitment policies, which were to recruit older workers, mainly mature women, with a smart appearance. One of the perks of the job, mentioned by two employees were the discounts on ‘top of the range’ clothes. The owner felt that staff retention was not a problem so long as staff were treated fairly and paid a reasonable salary. Training in the retail sector in County Town: product knowledge and customer service skills The main form of training used by all the shops was in-house and on-the-job. The Leather Shop and the Florist were both too small (three and seven employees respectively) to have formalised training functions and budgets and the owners took responsibility for the induction and product knowledge training of their staff. At the Leather Shop, one member of staff had received sales, marketing and customer service training in a previous job in the luggage industry before being recruited. The owner believed that he just needed people ‘who are happy at the front line with customers and have a lot of common sense’, a view which may under-estimate the extent of this member of staff’s product and industry knowledge. He attended seminars at the Chamber of Commerce but felt that there was not much advice available for retailers in the local area. In the same way, at the Florists, the owner provided training himself on the products and tills and did not expect all members of staff to develop specialist knowledge of plants and flowers. He used quiet moments to top up staff knowledge of the products and identified their training needs through their interests and willingness to learn. He felt that standards are set by what the customer wants and is willing to pay for and said he would use a local college for any advice he needed. Although the Clothes Shop was considerably larger (11 full-time and 21 part-time staff), there was no formal training function here and no specialist trainers. Training policy focussed on basic on-the-job training, customer satisfaction and product knowledge, particularly of new ranges coming out each season. One member of staff referred to this as involving ‘thinking what you are doing rather than saying it is common sense or obvious’. In this respect, training needs were perceived as being the same for everyone. The owner claimed that these were identified on appointment and reviewed on a ‘need to know’ basis. The main driver for training was to provide a high quality service, rather than reference to external training standards. The owner felt no need for advice on training and said that any decisions on it were made jointly with the member of staff. Although there was little evidence of attendance at formal courses outside the shop, one member of staff said she had discussed the possibility of going to college at a future date with the owner. She felt that she could tell her boss what her needs were and felt that she had faith in her. Young people, training and promotion Only the Florist recruited younger workers in the 18-22 year age bracket and these were all part-timers rather than full-timers. Although they were paid less than the older workers, they were not receiving off-the-job training. In the Clothes Shop, young people were not recruited at all since they were perceived as not being smart enough for the image of the shop. The owner felt they would find the shop environment ‘too stuffy’. There were no young people employed by the Leather Shop. This picture appears to reflect the national picture in this sector of little support for NVQs and government programmes such as Modern Apprenticeship. No relationship between training and pay In general, there appears to be little relationship between formal, externally recognised training and pay. None of the older staff said that they had received a qualification nor a pay rise on completion of training. Wage rates appeared to be related to the going rate in County Town and, within the organisation, seniority and promotion. 4.5 Summary and conclusion In this section we have explored companies adjustment strategies to the NMW and the extent to which they have used the Youth and Adult Development Rates. This has been located in a broader analysis of their training and business strategies. In the conclusion we assess the significance of the NMW as a driver in training strategies and in creating incentives to employers to train specific categories of employees. | |
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