Sports Direct – Time for HR to step up

Published: 13 September 2016

Sports Direct needs to make good on its seismic HR promises.

Sports Direct’s recent rather public naming and shaming – and unusually open AGM yesterday – has caught the media’s attention. The wholesale shift in its HR policy shows a strong voice is starting to come from the HR team there, but is it too little too late?

When the dust settles the company must follow through on its promises or risk creating an even more toxic business, from the warehouse aisles to the boardroom table.

Strong HR leaders are becoming an indispensable asset to the C-suite. Being able to show a chief executive, chair and board that your engaged workforce is making the business more profitable, and therefore creating a chunkier dividend at the end of the year, gets their undivided attention. Good leaders recognise that employees affect overall business performance.

In the case of Sports Direct the share price temporarily rose on the news that they were improving working conditions, much to the market’s surprise. This should give some comfort to the board and encourage it to be consistent and follow through on its promises.

It is hard to imagine a more challenging environment to work in at the moment, following Sports Direct founder and majority shareholder Mike Ashley’s appearance in front of the Business, Innovation and Skills (BIS) select committee of MPs earlier this year to answer questions on the business’ internal working practices and culture. Allegations and undercover investigations highlighted truly unacceptable conditions – and it prompted the company to take action and launch a review with some sizable recommendations.

The abolition of zero-hours contracts, changing penalties on employees losing 15 minutes' pay for being just one minute late, and the bolstering of the HR team at the Shirebrook depot with a full-time nurse and a welfare officer, are all to be welcomed. The addition of an elected employee representative on the board, while positive, may be tokenistic without a strong HR leader and supportive board making them feel they can make a worthwhile contribution.

Now more than ever, strong leadership from the HR team at board level will need to be demonstrated if Sports Direct is to put past shameful practices behind it. HR leaders that have commercial acumen, combined with a passion to attract, develop and retain a workforce fit for the future can be the difference between a high growth business and one that never fulfils its potential. Ignoring this is fatal in any business, but particularly in retail, which is extremely competitive and undergoing a huge period of change.

People are a business’ greatest commodity – a fact that can often be missed in shareholder meetings and annual results – but one that a strong HR leader can ensure stays at the top of the C-suite’s agenda by being strong and ensuring they demonstrate how workforce engagement translates into a healthy bottom line.

It’s widely accepted that a CEO who communicates directly and regularly with staff creates a more engaged workforce, which leads to improved customer service that then contributes to an increased bottom line or share value. Encouraging Mike Ashley to do this small thing could have a huge impact on Sports Direct’s fortunes.

Debbie Sutton is Head of the HR Practice at Berwick Partners

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