Costa Coffee navigates COVID-19 whilst brewing a fresh HCM platform for its workforce
A change of ownership and a global health crisis really put Costa Coffee’s new HCM system from Ceridian to the test.
Early last year, UK coffee chain Costa Coffee found itself in the unenviable position of having to navigate a series of complex organizational changes, made worse by the COVID-19 pandemic and the closure of high-street stores across the nation.
In late 2019, just before the novel Coronavirus officially hit UK shores, Costa owners Whitbread sold the brand and its assets to The Coca-Cola Company for £3.9 billion. However, as a result of the deal, the food and drinks retailer needed to implement a new HCM platform to manage the company's workforce, as it would no longer have access to its previous owner's systems.
A challenging project in normal times, but one made worse by the fact that swathes of Costa's workforce were no longer able to work in-store for months on end and new furlough regulations were brought into support employees.
Andy Ratcliffe, Global Head of People Shared Services at Costa, explains how the company migrated to Dayforce, a HCM platform provided by Ceridian, and managed to find success for the company's people and teams during the trying time. Commenting on the early days of the crisis, Ratcliffe says:
I was looking for everything - from payroll, HR recruitment, core HR insights and reporting and self-service mobility - everything. It's almost as though we were a start-up company of 20,000 people with no way to manage their data or pay them. If we didn't get it live on time, we wouldn't have been paying people. Quite a big problem.
A large, hourly-paid global workforce
The scale of Ratcliffe's challenge: his company operates in 32 countries, with over 4,000 coffee shops (4,000), 12,000 vending machines, a network of 1,200 ‘proud to serve' franchise partners, as well as its ‘ready to drink' range for home delivery.
Costa's workforce is made up of full-time staff and a significant number that work on an hourly-pay basis. Often Costa's employees are students and what Ratcliffe terms "people with a passion to make great coffee". He adds that this mix of workers is very typical for the sector and requires a system that is capable of delivering a variety of pay processes. Ratcliffe says:
Some people would say our payroll is complex. Of course, we have our own nuances, but if you've got people working hourly in retail, this is a standard retail payroll problem.
The system also required ways to handle people administration, back-end processing of HR functions, as well as dealing with compliance and governance across a range of jurisdictions.
Efficient workforce management by app
Ratcliffe and his team went live with the Ceridian system in March 2020. Some of the reasons Dayforce was chosen, he says, are that the platform is cloud based, stores all necessary data in a single database that doesn't require any manual input, and has time, talent and pay functionality all in one place. The SaaS element was particularly crucial, as it means team members could be served whatever their location. Ratcliffe says:
Having one single database, from timesheet, right the way through to pay, means there's no manual intervention needed. We can now also calculate pay whenever we want to, so we can see at any point in time the cost of salaries to the business.
Ratcliffe also estimates that the new system has saved the business at least £625,000 thus far. This is largely down to the platform's workforce management capabilities, which Ratcliffe says are excellent at predicting specific labor requirements across the estate. This means that Costa stores always have the right number of employees, in the right place, at the right time.
Another aspect of this new cloud-based flexible resourcing model is a mobile app that Costa baristas can use to swap shifts using voice recognition on their own devices, which he sees as a "big win for the gig economy" and which millennials love.
Yet no sooner had Costa teams started to get used to their new HCM system, when the global health crisis reached its first peak. While some Costa stores stayed open throughout the pandemic - on hospital sites, for example - all other staff were furloughed, including some office-based employees.
For those still working, the new system became the only way HR could communicate with people in stores, as hires don't have company laptops or email addresses issued to them. More importantly, he adds, Costa was able to configure the system to pay furlough as seamlessly as possible, removing the need for any manual paper form-filling. Ratcliffe says:
We didn't want anyone to worry about where their paycheque is coming from; there's stuff going on in their lives, so we wanted them to focus on that and not have to worry about money.
Boosting talent retention
The original challenges of the divestiture and the first year COVID have thankfully eased. Now Ratcliffe and his team are focusing on how the new system can be used for bettering the company's recruitment processes. He says:
We're looking to recruit another 2000 people by Christmas, which we can start easily, as we're able to link to places like LinkedIn. In terms of growing talent, we've got performance and succession management functionality here. We've also got the ability to put people on secondment, so they can have multiple work assignments.
Our people can now also look at the job advert in the system and see the target store or the office location on a map and get a nice visual so they can picture where they would wind up working: that really helps us with retention.
In the immediate future, Costa plans further global expansion in Poland and potentially China and intends to use the platform to support such moves. Further out, system functionality around automation, AI-enhanced employee support and process optimization will also be investigated.