The HR tech that saved Costa £625k

Andrew Ratcliffe, global head of people shared services at Costa.

While under Whitbread’s ownership “we had been working under a transitional service agreement (TSA)”, but “that TSA had a shelf life”, Costa’s global head of people shared services Andrew Ratcliffe tells UNLEASH.  “By the end of March 2020, we had to get off the TSA” in order to be able to pay its 35,000 employees.

So at this point, Ratcliffe and his team went looking for a new human capital management (HCM) system that would allow Costa to not only pay its people, but also act as a core HR technology platform.

They looked at the big players – examples include Zellis, SAP SuccessFactors, and WorkDay – and Ceridian also pitched its Dayforce product.

Ratcliffe candidly admits that he hadn’t seen Ceridian as a payroll provider. But he asked the company to come and pitch anyway because Costa was already using Dayforce’s workforce management capability; and he was pleasantly surprised.

“I was like ‘this is absolutely the right one’”. Choosing Ceridian’s Dayforce was a “no brainer”, primarily because of its mobile functionality, according to Ratcliffe. While Costa has full-time staff in its corporate offices, a large cadre of its workforce are hourly workers.

Dayforce and the pandemic

Costa went live with Ceridian’s Dayforce in March 2020, just before Europe went into lockdown. This was only nine months after Ratcliffe chose Dayforce; the main challenges came from underestimating the resources needed for the data transformation and payroll simulation pieces. 

Dayforce then became essential to Costa’s ability to furlough 11,500 staff as a result of COVID-19 restrictions.

It allowed Costa to manage the complicated payroll situation of furlough, but also helped it to continue to forge and cultivate a company culture with all its workers.

The fact that Dayforce was on hand to keep Costa in touch with its employees was serendipitous.

It wasn’t part of why Costa chose Ceridian, but “in hindsight, it was a great thing to have implemented”, noted Ratcliffe in a keynote at Ceridian’s World Tour conference in London back in November.

Employees may not have been legally able to work while on furlough, but Costa still needed to be able to communicate with them.

Costa shared information like messages from the CEO, informative guides about working at Costa, as well as practical information about when stories were going to re-open and when workers would be called back to work.

Dayforce enabled Costa to target different pockets of its 35,000-strong workforce. “With email [alerts] you just blast everybody”, but Dayforce meant Costa could “go to the store managers and say you’ve got to go into the store and the rest of your team will be called back in two days”.

Ratcliffe adds that Costa was simultaneously able to reassure employees about safety protocols in place to protect them in going back to work.

Benefits of Dayforce for Costa

Beyond furlough, Ceridian’s Dayforce is really useful for automating manual processes for Costa’s HR team.

“HR, payroll, and timesheets are all in one connected environment. It makes it so much easier for us on the backend – if staff work a shift, they get paid”, explains Ratcliffe. “We don’t have to touch it or worry about it, it just flows”. This is a real time-saver compared to Costa’s old HR systems.

Another related benefit is around compliance; Ceridian deals with that side, so “we don’t have to worry about it” and can avoid any fines.

The fact that employee data is all in one place is also useful for Costa workers. It enables them to swap shifts easily, book holiday, ask when payday is, as well as have visibility of their paychecks – previously Costa relied on paper payslips.

The fact that all this functionality is available on mobile – which was central to Costa’s decision to choose Ceridian over other vendors – has been “game-changing” for Costa’s employees, according to their feedback. Ratcliffe notes that another major benefit is “it is intuitive to use”.

Because Dayforce is mobile-enabled, HR teams and managers “can approve stuff on the move”.

Costa further uses Dayforce to support its recruitment. Candidates can see all vacancies in one place, and store managers can see great candidates and call them for interview all with Dayforce.

“We’ve been able to be quite flexible [with recruitment]”, notes Ratcliffe. He adds that Dayforce has sped up the hiring process, while also ensuring it is compliant. “This is important in the environment we work in [where] people can walk in the door in the morning [for an interview] and get a shift in the afternoon”.

The final benefit for Ratcliffe is linked to productivity and workforce management. Having more and easier access to real-time data about Costa’s store workers and their shift patterns, as well as the busy times for individual stores, means the company can “flex our staff” and ensure “’we’re not having multiple people twiddling their thumbs” or there are too few, overworked staff.

As a result of these benefits, and particularly the workforce management piece, Costa estimates Ceridian’s Dayforce has saved the business £625,000 so far.

The ‘Great Resignation’ and Costa

It wouldn’t be an UNLEASH interview without discussing the ‘Great Resignation’ and hiring challenges that employers have faced during the 2020s so far. This is particularly pertinent for Costa given labor shortages are severely affecting the food and drink sectors in the UK, the US and across Europe.

Ratcliffe explains that central to Costa’s solution is building trust by listening to individuals and their needs.

Trust is “the backbone of our culture”, and it has helped Costa to not have to make anyone redundant during the pandemic, despite dealing with the restructure with the Coca-Cola acquisition.

Also, in recognition of how hard Costa frontline employees worked in the pandemic, Costa decided to bring forward its April 2022 pay review to October 2021. They offered a 5% pay rise to its 14,500 store workers across the UK – the minimum pay rise will be 45p an hour to £9.36 an hour.

Dayforce enabled Costa to do this seamlessly and quickly. Ratcliffe notes that with Costa’s old TSA it would have taken around six months to do this.

Costa managing director for UKI Neil Lake commented: “Our teams have been through the most challenging year and a half in living memory and have shown incredible passion, resilience, and commitment.”

“We are committed to putting our team members first, investing in their safety and wellbeing and their long-term development, ensuring we remain a great place to work for all our current team members.”

Credit: Costa.

Dayforce also helps Costa to look at the reasons behind any resignations they have had. Having access to this data means Costa can look at whether people left the food and drink sector altogether, or whether their staff went to work for a competitor.

More data and better dashboards mean Costa can figure out what it more it needs to do to retain its top-quality staff.

The future for Costa

While the vast majority of Costa’s employees cannot work from home, there is still a cadre of its workforce based in its HQ and support centers.

For these employees who were able to work from home during the pandemic, Costa has been discussing the future of work.

“Are we going back to the way things were before? Absolutely not,” Ratcliffe told the Ceridian World Tour conference.

As a result, Costa trialed three models – fully remote, fully in-office, and hybrid – as well as surveyed employees about their preferences. Ratcliffe explains that those who were fully remote or fully in-office felt disconnected, “but the ones who were hybrid were more connected, engaged and brand aligned”.

In this model, individuals are free to choose if they want to go into the office or if they want to work elsewhere. Ratcliffe is clear that there are instances where offices are useful, but there is little point employees going to the office to just sit on video calls all day.

This new hybrid model also enables Costa to hire more widely across Europe. “Two years ago, we never would have recruited somebody in Nottingham or Norfolk” because they couldn’t commute to Bedfordshire HQ every day. “But now we can recruit anywhere in the world”.

In terms of its future with Ceridian, Ratcliffe notes that Costa is always trialing new Ceridian and Dayforce features.

Examples include Dayforce Wallet for on-demand pay – “it would probably be good for our stores” and “could be a key attractor” in the war for talent – and Ceridian’s new workforce intelligence and reporting dashboards that are launching later in 2022.

In addition, Costa’s team is going out to tender this year for a new learning management system (LMS).

Its legacy system from its time under Whitbread was called Totara and it was very linked with pay. When Costa first split from Whitbread “we thought we were doing enough just doing HR and payroll” and we would leave the LMS alone for the time being.

But now things have changed. Ratcliffe explains that Ceridian is on its list of potential vendors. He adds that Ceridian’s LMS offering is still in quite early stages, but he is optimistic about it now having spoken to other customers who have been very impressed.

“We’ve got some big business decisions to make”, concludes Ratcliffe, especially since Costa is keen to double its headcount in the next few years. Achieving this will only be possible with the help of HR tech like Ceridian’s Dayforce.