The fashion and retail industry has evolved its consumer journey in recent years, transforming the relationship with its customers into a fully integrated, personalised experience, informed by digitalisation and an ever-changing economic environment. The same evolution has been taking place concurrently within the workplace, with candidates and employees requiring a personalised experience and benefits package that caters to their needs.
From the pandemic and remote working boom to the increased focus on the climate crisis and vigour behind diversity, equity and inclusion efforts, “human resources” is a core function that has had to reorient to better predict, reflect and meet the needs of employees today. After all, in 2021, marketing consultancy firm Edelman found employees are now seen as the most important stakeholders to an employer’s long-term success, overtaking consumers for the first time.
Neiman Marcus Group (NMG), parent company to luxury retailers Neiman Marcus and Bergdorf Goodman, is one such company evolving its approach to people services. With a 115-year legacy, NMG today seeks to revolutionise its operating model to reflect the changing expectations of today’s workforce, led by Eric Severson, chief people and belonging officer.
NMG’s People team has used advanced analytics to drive a renewed focus on four key pillars of the associate experience: total rewards, flexibility, career development, and environmental social governance (ESG). These focuses have a notable impact on recruitment and retention, with Bloomberg recently reporting that workers are now willing to trade 5 percent of their compensation for more flexibility.
The People team at NMG has also reframed many of the company’s benefit offerings, which includes enhanced, fully inclusive paid parental leave and paid family leave. The business’s remote working culture, known internally as the NMG Way of Working, or NMG WOW, also encourages associates to integrate life and work to accommodate their professional and personal commitments in a way that prioritises health and well-being.
Now, BoF sits down with Severson and members of the people team — Jonathan Hall, director of belonging, and Maria Cabezas, market manager of the northeast — to better understand how the group embraces the future of work and utilises technology to drive its continual evolution as a people-first company.
How has NMG modernised its people strategy with the future in mind?
As millennials and Gen-Z make up more of the consumer base, it’s important to consider how these cohorts have experienced personalisation for much of their lives. Now, when they come to work, they expect that same level of personalisation.
As a result, we have explored the expression of customer value proposition in relation to employee value proposition. Essentially, the customer experience and employee experience are coming together more synchronously. A lot of the same tactics, processes and practices that have been used in marketing and consumer engagement are now used in associate engagement.
What key learnings have you found from this strategy so far?
At the end of 2019, we conducted a survey of our associates using two analytical tools that are typically used in marketing. We found four elements of our value proposition to be top priority for these employees — total rewards (benefits, recognition), career development, flexibility and ESG. People want fulfilment and a sense of purpose at work, but also to be able to support their families. Compensation, fairness, the ability to advance in your career, and an environment where there’s equity and flexibility to do your best work, is key.
Since January 2020, when we stepped back and assessed all of our policies against the four priorities identified by our associates, we have been strategically investing in those priorities. Since then, we have seen our time to hire rate improve as we have rolled out new programmes.
Similarly, we have seen a 34 percentage point increase in our employee net promoter score (eNPS) over that time period. We conducted a survey at the end of 2019, repeated it 18 months later, and we saw an increase in 14 out of 18 of the effectiveness scores of our value proposition, including all top four associate priorities.
Why is NMG committed to a remote-first workplace?
In our quarterly pulse surveys, we consistently include one open-ended item that asks our workforce, “what’s one thing about Neiman Marcus Group you would never want to change because it differentiates us?” And then, “What’s one thing you would change?” The number one response since we implemented this has always been to not change our NMG Way of Working.
Compensation, fairness, the ability to advance in your career, and an environment where there’s equity and flexibility to do your best work, is key.
So, we have also made significant investments in flexibility. For instance, we have implemented paid parental and paid family leave in the last few months, including 16 weeks of paid leave for all parents welcoming a new child (up to 24 weeks for birthing mothers). We also have two additional weeks of family leave, which our competitors don’t offer. We made that choice specifically because our workforce is 69 percent female.
What is the advantage of decentralising your workforce across locations?
It’s enabled us to get the best people possible because we are not constrained to Dallas or New York City, where our corporate workforce has traditionally been located. We now operate with a “hub” network model, whereby stores are hubs, as well as distribution centres. We have service centre hubs, corporate hubs and we even deem people’s houses, or their local Starbucks, to be hubs if that is where they are working from.
Despite opening up our talent market, we do have larger corporate hubs — for instance, Bangalore — where we have a higher concentration of associates who live in that market. One of these is Dallas. Our previous corporate office in Dallas was over 400,000 square feet. Because of the flexibility offered by NMG Way of Working, the new Dallas hub has been consolidated to 85,000, but it’s going to be state of the art; designed to enable incredible collaboration and with cutting edge technology investments (like collaboration software) that will benefit everyone in the hub network.
What is your next focus for the People team at NMG?
We are continuing to invest in key areas that deepen NMG’s differentiation and personalisation. Next month, we are launching a new associate recognition platform that’s personalised and digitally driven, meaning anyone can recognise or commend anyone, anywhere.
We are also working toward the launch of our inaugural People Report, which will aggregate our people investments, commitments and results in one place. We’ll be making several important disclosures on ESG and belonging, which includes our pay equity analysis.
Regarding career development, we are also launching a digital goal tracking platform, which will allow managers and employees to have regular conversations around priorities, provide feedback and development on a cadence that is personalised to them.
What initiatives does NMG offer its employees to cultivate a culture of belonging?
In the spring of 2022, we rolled out our associate community networks (ACNs), what other companies may call employee resource groups. When you think about the overall makeup of our organisation, every single person has an element in which they can participate. And so, we launched with nine — API network, Black Network, Caregivers, Health and Wellbeing, Hispanic, LGBTQ+, People with Disabilities, Women’s, and Young Professionals.
In addition, McKinsey and Company develops our Black, Hispanic and Asian identifying leaders through their “Connected Leaders” programme, which enhances their leadership and general management skills.
This is one of many programmes we support that equips our racially diverse leaders with executive leadership development capabilities specific to challenges that they might face as a minority in the workplace, as those are very different lived experiences.
How are data and analytics integrated into your day-to-day working?
When you approach people problems or initiatives with data, you can find ways to inject evidence-based interrupters into the process. In the beginning of February, we said, “we know our workforce is majority female and outpaces the US population in racial and ethnic diversity. However, we have an opportunity to increase racial and ethnic diversity in leadership roles.” We saw that and did some benchmarking externally.
It’s important to think about where the best talent is going to be and anticipating their needs.
One of the best evidence-based tactics is to ensure that everyone has an equitable opportunity to interview in the process. We are rolling out our inclusive hiring best practices toolkit which creates an environment where everyone can be clear about the expectations, and we can interrupt implicit bias. It’s about increasing the likelihood that a diverse individual will have a fair opportunity to interview and demonstrate their capabilities to do the job.
How does NMG plan its belonging initiatives with the future in mind?
It’s important to think about where the best talent is going to be and anticipating their needs. At NMG, we recognise the importance of ensuring that the make-up of both the people making the decisions and those getting the work done is diverse.
In allowing individuals to work from wherever they are — and whenever they need. We can recruit the best in data technology, and foster innovative new fashion buyers and marketing executives, communications and senior leaders in the organisation, because they no longer have to think about uprooting their family to join this organisation.
We also invest thoughtfully in community initiatives through our Foundation by developing partnerships with groups like Fashion Scholarship Fund that empower the next generation. By creating a diverse talent pipeline and supporting the avenues of development that will help them be successful, we are formulating a future for our industry that is rooted in belonging.
How have you experienced a sense of belonging during your time at NMG?
I’ve been at Neiman Marcus for 17 years, but in my current role since January of this year. I currently oversee five stores for Neiman Marcus in Boston, New York and New Jersey. We identify opportunities where we can impact the leaders in store and I work with partners to develop a plan on what needs to happen.
I feel that today, Neiman Marcus Group is fully accepting of all backgrounds and diverse experiences where, in the past, I feel like that was not a predominant focus. Today, we are so diverse. I’m a Spanish female — and so it’s comforting to feel that the company looks at your skillset rather than solely your background.
How has NMG modernised its people strategy with the future in mind?
As a company, I am proud that we are transitioning with the times, adapting where we need to — we make changes to stay on par with our associates’ evolving needs. We look to hire people from all different backgrounds and, in doing so, we have reduced our time to hire, achieved our highest-ever net promoter score, and are seeing strong retention rates across the business. And as our retention has gone up, it means our associates are staying longer and progressing within the business.
I think one of the drivers of this is the open channel of communication we seek between associates and leaders. For example, I visit stores about twice a month, during which time I try to speak to as many people as I can. On my most recent visit, an associate shared that she was unhappy with a particular process, and I directed her feedback to our next quarterly survey, because Eric listens to and reads them all, and that’s how we are able to decide as a team where we can make changes.
As our retention has gone up, our associates are staying longer and progressing within the business.
I believe our senior leaders in the people services team are listening and our employees can have confidence that if you share a concern with them, it will be heard and actioned.
What excites you about the future of working at NMG?
In the past, I believed my career options were more limited because of the nature of having our headquarters in the physical location of Dallas. While that is still the central base, NMG has opened up many new avenues of growth for its employees, especially people services, as it allows for our roles to be remote. The flexibility means that growth is not limited or restricted by physical location. It makes me want to grow and strive for more, and I believe it will inspire a lot of other associates to want to stay longer and progress within the business.