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IGD Skills Summit Speech by Lucy Neville-Rolfe

Tesco

10 March 2010




Introduction
Good morning. Education is very important for Tesco, for the industry and the country. You can’t open a newspaper without reading about education. It’s set to be an important point of debate at the General Election. So I’d like to congratulate IGD on organising this very timely skills summit.
Companies like ours have a strong commercial reason to become involved: a well-trained workforce is a more productive workforce. But there is also a moral reason to help – businesses have a responsibility to the wider society in which we operate.
So I hope that we can use the time today to help the IGD come up with some practical recommendations that they can take forward on behalf of the industry. Our aim should be to work up an industry manifesto for education and skills which we can give to whoever wins the General Election.
As I said, this issue is very important to Tesco. As the UK’s biggest private sector employer, we employ 450,000 people around the world, 280,000 in the UK alone. Each year we recruit, train and promote huge numbers of people. 1 in 10 of our employees is in formal training at any one time.
In some ways, we are a society in miniature. We need:
- general assistants to stack the shelves and serve at checkouts - team leaders and managers within store - the store manager – our equivalent of a Headteacher in a school - operational management - buyers and distribution staff - technicians in everything from food hygiene to refrigeration and carbon saving - professionals in law, HR, pensions, communications etc - senior executives and a world class Board. - And also within our supply chain
We also know that to get the best out of people you need to have a good rewards and benefits package – in my view, that is as true for people working in education as it is in retail. And we also know that as employers we can help make a positive contribution to the community by helping people onto the jobs ladder and by giving them opportunities to learn and grow as members of staff and also as individuals.
In short, our ideal at Tesco and across the economy is that everyone contributes at a level as close as possible to their potential. And this need for us all to fulfil our potential applies just as much at the bottom of an organisation as it does at the top. But it is at the bottom unfortunately that we are seeing more of a problem.
We are seeing basic problems with literacy and numeracy. And I would say that many school leavers have what you might call an attitude problem. They don’t seem to understand the importance of a tidy appearance and have problems with time-keeping. Often they haven’t learnt to work in a team. Some seem to think that the world owes them a living. But the truth is that a certain humility and an ability to work hard are important for success in our business. More broadly, a society where people don’t feel the need to work to gain material possessions will not be a stable or successful society.
There are growing questions over various aspects of our exam system and there are worries about our international competitiveness in skills and education.
Let’s be clear. These problems have not just arisen over the last 10 years – they go back a long way. They reflect changing attitudes in society – for example towards authority or the family – as much as individual decisions taken by politicians of all parties. I’m not interested in attributing blame but in understanding the problem and working out what we can do to help put things right.
The challenges
Let’s look at some of these challenges in more detail, starting with the 3Rs.
As I have said, we need people at all skills levels at Tesco, but we are seeing more people applying without some of the basic skills they need to get on, not just in their job but in life.
When you look at the statistics, you can see the problem.
Despite the efforts successive governments have made to focus on the 3Rs, some 40% of 11 year olds still do not reach the basic level expected in English and Maths at KS2. Further up the educational ladder, it perhaps isn’t a surprise that in a very high proportion of secondary schools – nearly 6 in 10 – under half the pupils manage a C in English Language and Maths at GCSE.
And, when you look to the future, the challenges for teachers, especially in inner city schools, are only going to increase. In 2003, 10.5% of pupils at primary school did not have English as their first language. This doesn’t mean that they can’t go on to be a great success and there are many fantastic examples of children who have come to the UK with no English who have risen right to the top. But it must make it harder for the teachers. By 2009 – only six years later – the percentage without English as a first language had risen to 15.2%: an astonishing increase in such a short period of time.
Next, attitudes to work. Forgive me for sounding like an old fogey, but I find that attitudes towards basic things to do with going to work have changed. More school leavers seem to have a problem with things like turning up on time and coming to an interview properly dressed. Working as a team is very important in a business like ours, but team-working also seems to come harder for some.
But again, perhaps not a surprise when you read about the well-publicised problems in some schools. 380,000 suspensions a year. Nearly a quarter of a million persistent truants.
If children aren’t learning the importance of discipline at school – or, dare I say it, in the family – how can we expect them magically to have learned it by the time they turn up looking for work?
Without discipline, teachers can’t teach and pupils can’t learn. So, good discipline is the building block for higher standards. Linked with that is the need for rigour in our exam system.
Some people might argue that there is a contradiction between complaining that some people can’t pass exams and then arguing that they should get harder.
I don’t accept that. There seems to be a fair amount of evidence now that they are getting easier and failing to stretch people. I know that each year there is a ritual whereby some people assert that there has been grade inflation and others equally vehemently deny it. I am not an expert, but I am very struck by what fellow employers say about their experience when recruiting.
And I do find these figures drawn from a variety of different sources quite striking.
A grades at A level up from 16% to 24% in 9 years: a 50% increase.
A grades at GCSE up from 8.6% to 20.7% since 1988 – admittedly over a longer period, but that is a 150% increase.
5 or more A*-C grades up from 35% to 58%.
And the same thing seems to be happening at Universities. When I was there, a 2:2 was a respectable degree and what most people got. Today the proportion of Firsts and 2:1s has risen enormously so it’s much rarer to get a 2:2 than a First.
People who are clever today are achieving the grades of the very clever a couple of decades ago.
Does this matter? Well, yes because as an employer it is much harder to differentiate between tons of candidates all with the same impressive array of As and A*s.
The competitive position
That leads naturally to looking at our competition. I travel around the world for Tesco. I am just back from China, Japan and Korea where they are very serious about education. Pupils are very disciplined and hard-working and aspire for a better life. Millions of well-trained graduates are coming out of their universities and Asia is becoming a vibrant competitive force.
Do the facts bear out my impressions that other countries seem to be doing better than us? Well, unfortunately, they do.
A recent report for the World Economic Forum suggested that the UK is now 24th in the world for primary education. The third OECD PISA study showed that compared with 2000, the UK had fallen: - in Maths from 8th to 24th - in reading from 7th to 17th - and in Science from 4th to 14th.
Any of us whose businesses were performing like that would be seriously worried.
It is interesting to see which countries have been improving their performance over the same period. South Korea and Poland, where Tesco has two of its biggest businesses, have moved up strongly in reading. Mexico and Greece have powered ahead in Maths. Overall, South Korea and Finland are the most successful countries in reading and Taiwan and Finland in Maths.
Looking at how well Korean and Taiwan do, I come back to my discipline point. Without discipline, we cannot expect schools to achieve high standards. Without discipline and respect for others, we cannot expect schools to achieve high standards.
Some lessons from Tesco
So much for some of the background and the challenges we face. Are there any lessons we might be able to apply from our own experiences? I’m not pretending education and retail are the same for one moment. I have been lucky enough to work in both the public and the private sectors so I understand the difference. But I think there are some principles which can apply to both. Here are five possible lessons. Lesson 1: encourage aspiration: At Tesco, we have our Ladder of Success, where at any one time 10% of our staff are working for promotion to the next level. Giving people something to aim at and having high expectations of them helps them to progress in their career. Is there a similar attitude and support systems to help those working in our education system?
Lesson 2: keep it simple (by which I mean the administration of teaching, not what is taught). Tesco has hundreds of thousands of people doing millions of different actions every day. Therefore we work very hard to keep things as simple as possible. Our education system seems very complicated to me. I would guess that the paperwork mountain with which teachers have to struggle is even worse than the red tape we face in business. There are lots of agencies and bodies, often issuing reams of instructions to teachers. It isn’t surprising if teachers sometimes get distracted from the most important task at hand: teaching children well in the classroom.
Lesson 3: push accountability down. One of the most important lessons we have learned is to trust people to run or manage the business. We try to treat the managers of our stores – our Heads if you like – as the most important leaders in our organisation with values that put customers and the stores they serve first. Why don’t we give Heads and teachers more freedom to take responsibility and use their professional judgement?
It’s no surprise that the best schools are all those with the most inspirational Heads – and some of the greatest school turnaround stories are in those schools where Heads have been given more freedom to make their own decisions.
Lesson 4: reward people properly. We need teachers to be respected and accountable. In my view, this might mean rewarding good teachers better for good performance. But rewarding people is about more than pay. In our businesses we know the importance of good career planning and management. Given the importance of teachers to developing our talent pool of the future, investment in their personal development and training feels on the light side.
Lesson 5: get involved. There are many ways retail and the supply chain can play a part in local education. Local managers could be school governors. Employees can be involved in reading schemes or teaching pupils how to grow fresh vegetables as our 120 community champions did last year. Others are involved with Academies. Business can set an example and at Tesco we play our part in 7 specific training programmes.
Let me say a few words about some practical examples of where we try to help.
We run Bronze, silver and gold training schemes - which provide a route to learning in every department of the store.
We have a 13 week internship programme run by our individual stores which gives young people practical experience of working in retail. At a more advanced level, we have an NVQ programme, a retail diploma and a foundation retail degree.
We offer level 2 to 5 NVQs in areas such as team leading or management. The Foundation Retail Degree is a two year full time degree level qualification, awarded by Manchester Metropolitan University and The University of the Arts, London. It is fully funded by Tesco and employees are supported with paid study leave and tutorial time to complete the qualification.
We offer Apprenticeships - 1565 Tesco employees have successfully been awarded an Apprenticeship. We are committed to more than doubling the number of apprentices this year.
We have a School leavers’ development programme which offers an ‘earn while you learn’ alternative to the mainstream education system. It incorporates the Duke of Edinburgh Award and offers a fast-track management scheme with the potential to progress to Store Manager level by the age of 23 – on a then expected salary of £50,000+. And we have 26 Regeneration Partnership stores, where a certain number of jobs are ring-fenced for those who have been unemployed for over six months. Through these partnerships thousands of people have had their lives transformed. Our most recent scheme is in Birmingham, Hodge Hill with 90 recruits who were long term unemployed.
I can also announce today a new partnership with Teach First where we will be supporting the placement of graduates in particularly deprived schools in Hertfordshire to help improve school management and attainment. We also provide Support for individual staff with learning difficulties, working closely with both the Shaw Trust and Remploy who are experts in providing employment for people with disabilities and learning difficulties. All these are good practical examples of how industry can help and many of us here will be running similar programmes. They have an important part to play and all of us need to ask ourselves whether we can do more.
The skills we need
I want to end by posing some questions which I hope we can think about in the group sessions, but first let me run through quickly some of the key skills that we are looking for.
The basic building block for everything else is numeracy and literacy – so that is our number one requirement.
The importance of team-working would be next on my list. We need employees who can listen to other people, work with them, and understand the basic rules of the work-place.
Then I would emphasise IT and other specialist skills. Here, of course, today’s youngsters are often way ahead of their bosses.
Fourth, for an international business like ours, language skills are extremely important. Of course we have a huge competitive advantage with English, but there is no substitute when you are doing business overseas to being able to speak the language.
I would also add global awareness, where again I think in many respects, today’s youngsters are ahead of where my generation was at the same age.
This musn’t be a doom and gloom session, despite what I’ve said. At its best our education system is still very good – we attract thousands of good recruits a year. British universities are still up there with the best of them.
But our schools are not universally good and some children are clearly missing out. What is also clear is that competitive pressures are growing – the evidence seems to suggest that we are not standing still, but slipping back.
Therefore, we need to act – we need to act to make sure that we can find well-qualified applicants for the whole range of jobs we need to fill and so that fewer young people end up being NEETs.
I hope that in the break-out groups we can come up with some positive contributions to the important debate that IGD is kicking off today. To help give those discussions some focus, let’s try to answer the following questions: - how important is education to the industry? - what do we do well as a country? - what changes would make the most difference? - where are the specific skills gaps? - what positive contribution can the industry make? As I started by saying, there are both economic and moral reasons why we need to contribute to the debate. It is in our interests to help address the skills gap, but rather than approaching it piece-meal as we sometimes seem to do, we need to look at the root causes.
Those root causes lie in society as much as they do in our education system, and it is there that I believe we have to look for solutions. Changing attitudes towards discipline and respect for others is not something that can be achieved by the stroke of a pen. It is not something that can be changed overnight. These are difficult long-term issues.
If we as an industry want to play our part in identifying the problems and contributing to some of the solutions, it is therefore all the more important that we get off to a good start today.
Thank you.

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Tesco is the UK's largest retailer and one of the world's leading international retailers. Tesco has around 5,000 stores worldwide, employing over 500,000 people in the 14 countries in which it operates. Our core purpose is to create value for customers to earn their lifetime loyalty. Our success depends on people: the people who shop with us and the people who work with us.