Resourceful thinking: The Volvo approach to retention

Retention of talented workers is a perennial issue for HR professionals. Nadia Williams finds out how car manufacturer Volvo is keeping its staff engaged in the highly competitive UK market

The automotive sector employs around 850,000 people worldwide and is worth approximately $97 billion. But Amicus, the UK’s largest manufacturing union, predicts the death of UK manufacturing in 25 years if it continues to haemorrhage jobs at its current rate – 155,000 were lost in 2002 alone, an average of 13,000 a month. And meanwhile, the automotive industry as a whole is suffering from a massive shortfall in technical and engineering skills at all levels. But has the industry really had its heyday?

“Yes, if it can’t become more innovative and resourceful,” says Tom Russell, operational HR manager for sales and marketing at Volvo Car UK. “The sector is competitive. And in a tough sector, you need to become more creative with the resources you have.”

His four-person department has helped to streamline Volvo’s operations by working closely with managers on opportunities to do things differently and, as a result, has identified areas where the company can be more efficient in terms of resources and costs. Russell believes the UK manufacturing industry can overcome its own challenges too, as long as it becomes more competitive and thinks more laterally than it did before.

“There are a lot of comparisons with the past – a ‘those were the days’ attitude. But making comparisons with the past won’t always help you move with the times,” he says. “The practices of 1994 are not necessarily still around now. It’s about learning lessons from the past, not necessarily trying to preserve the past.”

Volvo’s evolution

Volvo itself has come a long way since humble beginnings as a small, local Swedish factory. More than 70 years after Assar Gabrielsson and Gustaf Larson pledged to put its people first and drew up plans for the ÖV4 – Volvo’s first car – their company has flourished into a successful global brand. It has more than 70,000 staff worldwide operating in more than 125 countries, and is now an independently managed division of global market-leading car giant Ford.

But the founders’ promise is still upheld – a fact exemplified in Volvo’s people strategies. These include high-performer development schemes, where staff ready for promotion are identified and put on a fast-track development program, and a dealer awareness scheme, where workers are encouraged to go out to Volvo dealerships to help both sides understand each other, to work together more as partners.

“We’re strong on development, both in terms of the technical skills our employees need for the job and also in personal effectiveness and the softer areas,” says Russell. “But one thing we feel we do well is monitor career development, using a personnel development committee, where a group of departmental managers discuss people’s career development, where they could move to and what training and experience they would require.”

Volvo’s corporate responsibility

The company is also strong on corporate responsibility. For example, its Driving Safely documentation, which provides safety guidelines for all employees was launched in July 2003. This pre-empted December’s official ban on the use of hand-held mobiles while behind the wheel in the UK.

Guidelines are also distributed to Volvo customers. Alongside the standard vehicle manual, buyers get booklets emphasising the importance of using Volvo products responsibly, such as the Road to Safe Driving, and Children In Cars.

“We knew the mobile phone legislation was coming in, and we knew we didn’t have very in-depth guidelines about the safe use of our vehicles, so we wanted to be proactive rather than reactive,” says Russell.

“We wanted to be a lot more responsible in terms of telling our staff, ‘You are using our vehicles, and these are the standards we’d like you to adhere to when you are out there driving.’ I don’t think this is something just for the automotive industry – it is something for every employer. They should be encouraged to take a responsible line.”

Volvo has also provided driver training sessions for 80 high-mileage employees who are continuously on the road, as they are more at risk. “Say you do about 12,000 miles a year, and you just commute to and from work. The odds of you having a serious accident are about one in 8,000,” Russell explains. “If you’re on the road all the time – a field salesperson, for example, driving for business reasons – those odds go right down to one in 40. We have a duty towards those employees to make sure they understand risk avoidance and hazard perception.”

The evolution of HR

During his three-year tenure, Russell has witnessed big changes in the way the HR department has become more integrated within the business structure and has gained a lot more credibility. Previously viewed as an administrative add-on, it is now regarded as a business partner and is brought in from the very start on projects and initiatives. Russell believes this has been of great benefit to both the business and the department.

“I think people are a lot more confident talking to us about business issues,” he says. “Instead of talking to us about conventional personnel-type issues, they include us on business discussions.”

He points to work the company has done on improving levels of customer satisfaction within its dealer networks as one example of where the boundaries between HR and business strategy seemingly merge. “Giving our employees the skills to increase customer satisfaction includes elements of developing skills, which I suppose fits into the HR area,” he says. “But staff development is not just an HR issue, it’s a core business activity.”

Russell reports to the regional HR manager (who covers operations in the UK, Belgium and The Netherlands). Together, they oversee sales and customer satisfaction. But despite having headquarters in Sweden and such a vast and widespread workforce, Russell says few difficulties arise from being an international corporation, and most policies are communicated via the company intranet.

“There are going to be certain ways of communicating locally which have to be different in different markets,” says Russell. “For example, you have different legal frameworks in each country. So while there are broad similarities, there are also local differences across the business.”

Retention Volvo style

Russell’s love of cars partly attracted him to the company – working his way through the range, he currently drives an S80. “It’s the biggest saloon car we do, and it’s like driving in your favourite armchair,” he says. But more importantly, he was in search of some team management experience, and the prospect of a new challenge in a new sector finally lured him away from the retail industry.

Staff development is an area the company takes very seriously, and this year the HR department will be focusing on ways to provide fresh opportunities for staff to develop and grow within the business. In practice, opportunities for change are rather static, as staff turnover levels are low – typically around 4 per cent, and only rising to 10 per cent in the past year.

“We have quite a stable pool of people here, but we do try and actively retain and move them within the business to give them a wider knowledge and set of skills,” says Russell. “We need to give them the opportunity to move, and show them there are opportunities to do different things and develop.”

A number of staff have been in their current positions for quite some time and are looking for something a little bit different, and being part of the Ford empire has potential benefits in this area. “Land Rover and Jaguar are also part of the Ford corporation, so we can work with our colleagues there to find new opportunities for our staff too, without them having to leave the organisation as a whole,” he says.

Russell believes Volvo’s core values of safety, environment and quality also attract many potential employees. “We have a solid benefits package, but a lot of people are attracted by the brand in terms of its values,” says Russell. “It’s a very principled brand, and I think people can identify with that. Other organisations are maybe not so value-focused.”

Given the challenges facing the industry, it is perhaps surprising that Volvo Car UK does not have its own dedicated graduate recruitment scheme and, as a result, the company has a relatively low graduate intake. Yet the company has still been placed in the top 50 most desirable places to work in the Universum Graduate Survey for the past three years, and was ranked seventh in 2001.

Russell believes Volvo’s adherence to its values that accounts for such sustained popularity. “If you look at surveys and the reasons why people apply for jobs – particularly young people – they now place more importance on the values of the organisation, on its approach to the environment, for example, and what it does on diversity,” says Russell. “Safety and the environment are particularly strong values for Volvo as a brand, and this has possibly helped our popularity among the graduate community.”

Russell does not rule out the development of a graduate scheme for Volvo Car UK at some point in the future. And perhaps he will be there to oversee its implementation. Her certainly believes he will be with the company for some years to come, and sees a bright future ahead “selling a fabulous product range with an increased market share”.

So what does he predict for the future? “I’d like to see us outselling BMW,” says Russell. “That would be nice.”

Volvo’s values

Corporate values: Quality, safety and environmental care are the corporate values of Volvo Car Corporation, each reflected in how it develops its products, how it acts in society, and how it approaches its customers and employees.

Social responsibility: Open exchange of information and active participation in society are key components of the Volvo Group culture, manifested in both our external and internal activities.

Company culture: ‘The Volvo Way’ is the company’s philosophy, describing Volvo’s values, its corporate culture and the way Volvo works. It includes the history of the Volvo brand and its vision for the future.

Courtesy of Personnel Today