HR initiatives
practiced by
H&M
Harshita Khurana | Shreya Taneja | Varshita Bhadauria
About the brand
H&M was established in Vasteras, Sweden in 1947 by Erling Persson. H&M sell
clothes and cosmetics in around 2,000 stores around the world which operates in
37 countries and has 76,000 employees all working to the same philosophy: to
bring you fashion and quality at the best price. H&M is a hugely successful
multinational company. The success of the brand is primarily based on the
business model of entire design being done internally and centrally. The
manufacturing is totally outsourced, but quality is ensured and local retailing is
done with hired places, local staff and local shop managers are empowered to
take decisions. The success, business growth and expansion plans were possible
because H&M has formatted their HR strategy in line with the corporate strategy.
As evident from their Annual Report (2018), when they expanded into new
markets. they did not lose sight of their core values. They have succeeded to
manage all components of HRM effectively to ensure that core values are upheld
in all parts, regardless of country and cultural differences. Their strategic and
coherent approach in recognizing that the organization’s most valued assets are
the people working there.
H&M’s corporate strategy is to expand
on a continuing basis, and as a
consequence, employee strength also
increases continuously. The growth
target is 10-15 percent new stores
Human each year, which means 6,000 -7,000
Resources new jobs each year. Their staff is
spread across approximately 37
In H&M countries and come from different
cultural backgrounds. Their strategy
is to recruit locally whenever a new
store opens as stated in the annual
report (2018).
Overall Policy and Values:
01 H&M’s website indicates that their objective is to be a good employer,
including in those countries whose laws and regulations fall short of
their own requirements.
02 To quote the Head of HR “In order to meet people’s expectations of H&M
as an attractive employer, the company develops global guide lines on
diversity, equal rights and against discrimination” .
03
At H&M, HR activities are guided by a fundamental respect for the
individual. This applies to every aspect from fair wages, working hours
and freedom of association to the opportunity for growth and
development within the company.
04
The company has specific policies for areas such as Equal opportunity,
Managing diversity, and Employee development, Health and Safety,
among others.
H&M has an open door policy granting
all employees the right and the
opportunity to discuss any work-related
issue directly with management (AR1
2008). They also support their
Employee employees’ right and ability to organize
Relations and to decide who should represent
them in the workplace (AR1 2008).
And Voice Examples of collaboration on staffing
issues include their agreement with UNI
(Union Network International) and the
work they do with the EWC (European
Works Council).
Promotion: In the annual report of H&M (2008:34) the Head of HR quoted
“Internal recruitment and job rotation enable the company to grow
quickly”. This statement indicates that H&M has policies related to
promotion.
Employee Development: To quote Mr. Par Darj, Head of HR at H&M “I tell
employees, if you do not grow neither will H&M” (AR1 2008:34). This
indicates that policies exist for this area.
Rewards: According to the annual report (2008) H&M focuses on rewarding
people by providing more opportunities and responsibilities, and not
through promotions and job titles. This indicates that H&M has policies for
this area.
Recruitment and selection
H&M looks for people with personality who can perform well within the
culture, growth and motivational framework provided at H&M.
Par Darj, Head of HR stated, At H&M, great grades and all the university
credits in the world are no guarantee of a job or a fast-track career.
What they are really looking for, more than anything, is people with the
right personality.
One of the most important things they look for is drive. H&M values
personal qualities much more than formal qualifications. Since H&M is
a fast company and the tempo is always high, they need employees
who are self-driven and capable of well direct communication.
Recruitment and selection
H&M recruits people who like responsibility and decision-making. Also
it indicates that a love of fashion combined with a focus on sales is
perceived as an advantage. These appear to form the basis for H&Ms
recruitment requirements (and person specifications), programmes
and drive its selection processes.
At H&M selection interview approach is usually face to face and mostly
“structured situational based” According to Armstrong (2006) In a
situational based interview the focus is on a number of situations or
incidents in which behaviour can be regarded as being particularly
suggestive of succeeding performance. This is followed by panel
interviews and aptitude/work sample tests. It appears that candidates
are filtered at each stage of the process in H&M.
01 Internal Recruitment:
This is their first choice for a new
job opening. External recruitment
is considered only if no internal
options are available.
Sources of
candidates 02 Potential recruits (minimum age is
External Recruitment:
16 years) are encouraged to apply
directly to the local store, from the
careers website. H&M does not
offer summer jobs or work
experience placements. Buying is
centralized in Stockholm, and so is
the recruitment for the same.
Training and development
Each employee in H&M has to undergo a training process. The training
period depends on staff to staff. In 2009, for new staff the average
number of days was 10, for existing sales staff it was 1 and for existing
management positions the training period was 5.
All the training in H&M is mainly in-house (classroom, stores and one
to one) which is written and produced by the H&M staff. For some areas
like 'buying" external training is provided. The E-learning concept is
also initiated as a new subject.
However, H&M mainly focuses on "just-in time", on-the-job and hands-
on learning. For instance, when the company opened its first store in
Japan, the employees who were locally recruited were sent to Norway
and Germany.
Training and development
This is done basically to gain experience and to learn the existing
operations. H&M claims that they provide structured opportunities for
hands-on, workplace and on-the-job based training. (career site).
To summarize, it appears that today H&M focuses mainly on Self-
directed learning, though the company is moving towards e-learning
and latest technology.
The HR practice of giving responsibility to the employees early on in
their career, treating them as entrepreneurs rather than just employees
is a definite and positive step towards their development. Considering
the employees as capable of shaping its results and improving it in big
and small ways is key to H&M’s approach to learning and development.
Reward management
The company offers many benefits like incentive bonuses, staff
discounts, company sick pay, pension scheme and private health
care schemes.
The HR head of the company indicates that they do not consider pay
structure and titles as motivational tools. Though more and more
opportunities for the fulfillment of employee's aspirations are
provided.
Apart from these employees satisfaction is the main reward as
derived from the career website and the annual report of the
company.
Reward management
Thus H&M gives more emphasis on relational work along with
transactional reward.
H&M reward management strategy is linked with HR strategy of job
rotation', 'open doors' etc in consistent with other HR areas which
includes recruitment/selection, organizational culture etc. this
becomes essential for the fulfillment of H&M strategy of fast growth.
H&M has implemented the concept of Total Reward Management very
successfully. Apart from the financial compensation, job satisfaction
as a reward has motivated the employees to perform and contribute
their maximum to ensure customer satisfaction and business success
through increased sales.
Performance management
H&M has adopted a strategic and integrated approach to achieve
organizational success through improved performance of its
employees.
H&M employees have been told that the growth of the employees and
the organization are closely linked.
The practice of Shop Managers going through a process of reviewing
that day’s business with their subordinates on a daily basis is part of
the performance management activity.
Performance management
This underlines the fact that H&M has recognized the importance of
such a practice, and built in that process by which managers and their
subordinates work together, agree on what needs to be done and how
it is done.
They are able to plan, prioritize and develop their sales team in a
customer-focused environment.
At H&M a shop manager is in charge of the daily running of the store
like running their own business. The HR strategy of delegating authority
for managing the shop’s activities is a key factor contributing to the
success of the organization.
Managing Diversity in
teams and groups
H&M is expanding its business to open new shops in countries where
they are currently not present. By their HR policy and procedures, when a
new shop is opened the staff recruited locally. They also have the
practice of job rotation and movement of employees from one location
to another based on internal recruitment (promotions). This brings
together people of different cultural backgrounds together in the same
team, and successfully managing such a team is crucial to the success
of the organization. The HR strategy is, not to have very rigid procedures,
and the corporate culture of respect to the individual. As stated in their
Annual Report (AR1 2008), the HR strategy ensure the following:
01
In order to meet people’s expectations of H&M as an attractive employer,
company develops global guide lines on diversity, equal rights and
against discrimination.
02
H&M’s objective is to be a good employer, including in those countries
whose laws and regulations fall short of their own requirements. The
whole of their activity is shaped by a fundamental respect for the
individual. This applies to every aspect from fair wages, working hours
and freedom of association to the opportunity for growth and
development within the company.
03
H&M has positive experience of open and constructive dialogue with
the trade unions and they welcome such relations wherever they
operate. They consider that cooperation is essential if they are to
become even better. Examples of collaboration on staffing issues
include their agreement with UNI (Union Network International) and the
work they do with the EWC (European Works Council).
04
The fashion brand is strengthening its women workforce. Currently, 45
percent of employees in H&M are women even though it’s a male-
dominated industry. The organization is working continuously to ensure
that the workplace should be safer for women. When asked if H&M is
planning to increase the women employees percentage, Einola replied,
“Percentage doesn’t matter, if our customers are happy with the service
that we provide then it doesn’t matter if it’s coming from a male or
female.”
H&Ms success in executing their strategy of continuous international
growth and expansion, while maintaining its Swedish organizational
culture, indicates that its HR practices have contributed to the
successful management of diversity in teams and groups.
The main success of H&M basically lies in
the business model of the company. All
the designing procedure is being done
internally and centrally. The whole
manufacturing is being outsourced with
Role of no compromise on the quality of the
product.
HRM in the The company has their local retailing with
hired places, and that too with local staff
success of and local shop managers with full power
to take the decisions.
H&M The key lies behind H&M's formatted
strategy in line with corporate strategy.
While entering into the new market the
company does not lose their core values
which can be seen evaluated from their
annual report.
The company is successful in managing
all the core values in respect of country
Role of and cultural differences.
HRM in the
The elements of HR strategy like in house
training, improving performance through
local recruitment, job rotation, increasing
success of commitment and total rewards have been
in HR procedures and strategies and are
H&M practiced by the company. Thus the HR
strategies of the company are one of the
reasons for the success of the business.
