Inner beauty

By Stacey Sheppard

The advertising catchphrase of L’Oréal Paris is arguably one of the most widely recognised corporate slogans in the world. “Because you’re worth it” is L’Oréal’s way of telling consumers that whatever their age, gender, ethnicity or look, they deserve to use these products. And the slogan, which has been around in its various forms since 1971, seems to have done the job – L’Oréal, which boasts 23 global brands, saw €17.5 billion in consolidated sales in 2009.

“We give them business tools that are very comprehensively prepared and tested, and we know they work. ”
-Geoff Skingsley

However, this philosophy seems to be so much more than just a simple advertising and marketing tool designed to boost sales. "Because you're worth it" is an attitude that extends far beyond the consumer base of the French cosmetics giant's L'Oréal Paris brand and is also engrained in the company culture of the group, particularly when it comes to Human Resources. And it is because of this that L'Oréal is an award winning company that has been consistently recognised for its human capital initiatives.

Geoff Skingsley, Executive Vice President of Human Resources, puts such achievements down to the fact that L'Oréal has always had a long-term approach to managing its people and this is reflected in the numerous policies that have been in place for some years now. The global profit sharing policy for example, which has been running for over 10 years, is a long-term commitment that means that every employee of the group gets access to a share of the company's profits, depending on its performance in each part of the world.  

L'Oréal is also very committed to ethics. Their original ethics charter was launched in 2000, but was reviewed in 2007 and made more comprehensive. There is also an annual ethics day in October on which every one of the group's 64,000 employees are able to chat online with L'Oréal's Chief Executive Officer about the Code of Business Ethics. This, says Skingsley, is a pretty enterprising initiative.

Attraction

And it is initiatives like these that make L'Oréal such an attractive place to work. The company is highly ranked by students and graduates as one of the most appealing employers and it frequently appears in the many lists of top employers published by the likes of Fortune, Business Week, the UK's Times newspaper and Universum, the employer branding company.

The draw of L'Oréal, according to Skingsley, can be broken down into two main components. "The first is the nature of our business because we have some very attractive brands and a very good corporate reputation as a business because we've been successful for decades. But then, on the other hand, we have a human resource philosophy that has been very powerful in attracting young people because we make a lot of investments around graduates, and we have this long-term HR philosophy which means that when we talk to young people about the prospects in our company, we really talk about the potential for their long-term career," explains Skingsley.

However, a further aspect that Skingsley believes may add to the appeal of L'Oréal for many young people is the fact that it is a global company, present in more than 60 countries, with 23 international brands. "We're able to offer a very global opportunity because what we offer is not specific to just one country. Our message is the same around the world, and the opportunity is the same whether you're in Taiwan, Argentina or London. This is also one of the reasons why our universal ranking is consistently high in a large number of countries," he says.

For graduates who do take up the opportunity to work at L'Oréal, Skingsley says they can be sure of a rapid job progression in which they are given a fair amount of responsibility quite early on. "The other thing that I think is a key component of our attractiveness is early responsibility, and we deliver on it," he says.

"There are many managers inside the company who can and do testify to what happened to them in terms of being able to get responsibility - either for a brand or for P&L or R&D or for a factory or whatever it is - at a relatively tender age. We have countless examples of people who, before the age of 30, had their first key management responsibility, and that's part of our promise to young people, and we deliver on it" says Skingsley, clearly proud of the company's achievements in this respect.

Recruitment

It is easy to see that the initiatives and policies that L'Oréal has in place go a long way in ensuring that it meets the expectations of the younger generations that are now hitting the job market. But in the midst of a raging talent war, simply putting such initiative in place and hoping the top talent comes to you just isn't enough. Companies today have to be much more proactive in the hunt for the very best talent on offer. And as one might expect, L'Oréal is also pulling out all the stops as far as recruitment is concerned.

"Recruitment has always been an investment priority in our job strategy," says Skingsley. "Unlike many other companies, we put a large amount of money and very good talent into the teams that run recruitment for us. Recruitment is a strategic job in the HR organisation, and we like to ensure that we are maintaining a continuous pipeline of very high calibre graduates moving into the organisation, and all the investments that we make are basically driven from that strategic imperative."

However, the strategy that L'Oréal pursues is unlike that of other companies in more ways than one. Whilst most businesses seek out experienced, highly accomplished, industry experts to form their recruitment teams, L'Oréal takes a different approach completely. "We have an international recruitment department which is staffed, by and large, by people in their 20s and early thirtes," says Skingsley, and he is quick to stress that the young people he employs are more than capable of doing a good job.

"We make sure that the talents we put in there are very good talents for L'Oréal. They are some of the best talents we have in the organisation at that level, and they're also close to student reality because of the age they are - many of them only graduated in the last few years," he says.

"We give them business tools that are very comprehensively prepared and tested, and we know they work. We also devote quite substantial budgets to enabling them to come up with new ideas, and whilst not all of them work, the fact is some of them work spectacularly well," says Skingsley.

Allowing his young recruitment team such freedom to innovate and come up with ways of reaching out to the young generation of workers is indeed a gamble, after all as Skingsley himself says, not all of them work, but when they do L'Oréal benefits in a big way.

Business games

Take Brandstorm for example, one of the business games that make up L'Oréal's innovative recruitment platform. Launched by the group in 1993, the international marketing competition aims to attract the very best marketing students from around world as they battle it out to define a marketing strategy and communication campaign for a new line of products within an existing international L'Oréal brand. So far the competition has attracted more than 37,000 students from 220 schools in 42 different countries.

According to Skingsley, the fact that L'Oréal has been using such business games since the nineties proves that the cosmetics giant has an extremely innovative approach to recruitment. "We were a pioneer back in the early '90s when we invented what was initially called The Marketing Award, which has now become Brandstorm; but we were one of the first organisations to create a really meaningful marketing award," explains Skingsley confidently.

And Brandstorm is not the only example of how well L'Oréal has judged the recruitment market. 2001 saw the launch of the e-Strat Challenge: L'Oréal's first online business game in which business students from around the world play at being the manager of a virtual cosmetics company via a dedicated website. The game has witnessed massive success with 50,000 players in 120 countries taking part each year since its inception. It has also become somewhat of a benchmark in the field and has been used in teaching programmes at leading universities all over the world.

However, L'Oréal recently launched a brand new online business game that looks set to rival the e-Strat challenge as the group's key hiring tool. REVEAL by L'Oréal, which went live earlier this year, is a unique recruitment game that L'Oréal is hoping will revolutionise graduate recruitment. The game invites students and graduates to work on virtual business tasks across different departments in the company. Players will be given feedback on their performance in the game and those who excel will be invited to local recruitment events or interviews.

"It's a very ambitious project," says Skingsley explaining how the company invested several hundreds of thousands of pounds into the game, which had a dedicated team of two people working on it for over a year. He goes on to clarify the two objectives of the game saying that the first objective is to encourage as many students as possible, from all over the world and from different backgrounds, to take part in the game - hence the reason for it being internet based - and to help them discover themselves, by exposing them to a virtual L'Oréal work environment.

The second objective is to help people discover the beauty industry, says Skingsley. "We know that one of our challenges is that not everybody understands just how much potential there is in the beauty industry and just how exciting it is."  Before continuing, Skingsley warns me that he is about to sound like a salesman, something he says he is not ashamed of.  "It's a very exciting industry. It's fast moving and it has this incredible mix between technical performance and aesthetics and emotional values," he says.

"The category of the beauty business is unique in terms of what it takes to be successful, and L'Oreal is the worldwide leader. So, in exposing people to the beauty industry through Reveal we are basically able to attract a certain calibre of students." And it appears to be working as L'Oréal has already made nearly 100 recruitments through REVEAL by L'Oréal since its launch.

And this is one of the main benefits that L'Oréal has been able to capitalise on through its portfolio of business games. "We benefit because it's a competition and the brightest and best tend to win those competitions. We have a very high strike rate in hiring the bright students that end up being either the country winners or the regional winners or even the worldwide winners of these games," says Skinsgsley revealing that many of the marketing managers and marketing directors at L'Oréal today were winners of Brandstorm six or seven years ago.

Integration

"We are able to seamlessly integrate from business game to recruitment to career, and it's a very virtuous circle," says Skingsley. But the efforts don't stop once the top talent has been recruited. In fact, going back to what he said earlier about having a long-term HR philosophy, recruitment is just the beginning of the process. One of the main challenges facing employers today is not necessarily hiring top talent, but holding on to them.

Anecdotal evidence shows that when the Millennial generation - those born after 1980 - don't get what they want from a job - usually a collaborative environment and upward mobility in a short period of time - they tend to jump ship, and surveys have shown that most tend to be looking to move on within two years of being in a job. It is precisely for this reason, Skingsley says, that L'Oréal has introduced an integration programme that lasts exactly this length of time.

Called L'Oréal FIT (Follow-Up & Integration Track), the scheme is a personalised integration and support programme adaptable to the needs of all new employees at L'Oréal. "The whole nature of how you follow an individual when they join the company needs to have a medium-term perspective and not just a short-term perspective," says Skingsley.

"The FIT programme that we introduced is designed to last two years, but I think it is important to give people a perspective beyond that, and this comes back to what I said before about rapid opportunity and rapid responsibility. Young people need to see those around them getting access to positions of responsibility, because it gives them belief in what could happen to them."

And if you look at the top of the company today, Skingsley says, everybody who is on the board lived through that process of getting access to early responsibility in their late 20s. "We are regularly nominating people in their late 20s to be head of marketing, head of commerce, or head of finance in a division or on a brand," he says. "We have to make sure that the career promise is being delivered to those people, and even if it hasn't happened to them by the end of two years, they can see it happening to people around them, and therefore, they can believe it."

However, whilst L'Oréal is putting a lot of effort into meeting the aspirations of the younger generations entering the workforce today, there are certain expectations that Skingsley believes are not quite so necessary to deliver on, particularly the much publicised desire to work when and where you want.

"We have to make sure there's some flexibility regarding how people work, and we have to make sure that we're in touch with what that generation expects, but what is not talked about much and what we firmly believe is an underappreciated part of a successful working environment, is a strong sense of community. And to do that people have to be physically in a building. They have to interact with each other on a very intense basis, and we believe that's part of our success, and we believe it's equally relevant for the up-and-coming generation," remarks Skingsley.

With all things considered, L'Oréal appears to be doing a pretty good job at offering students and graduates exactly what they want from an employer, workplace and career, and this undoubtedly helps them not only to attract the best talent but also to retain it. But where does such an innovative Human Resources strategy go from here? According to Skingsley the strategy is not really going to change that much at all, although the tools and  technology that are used to deliver that strategy will obviously need to evolve with the times.

"The real question is about reach," exclaims Skinsgley. "How can we reach further and further around the world into markets where our presence is only just being established?" Certainly, with e-recruitment tools like REVEAL by L'Oréal and Brandstorm this question is already being answered.   

The L'Oréal Group's main facts and figures for 2009:

• 100 years of expertise in cosmetics
• 5 key areas of expertise: haircare, hair colour, skincare, make-up & fragrances
• 23 global brands*
• Products distributed in 130 countries
• €17,5 billion consolidated sales in 2009
• €609 million in R&D investments
• 674 patents filed in 2009
• 64,600 employees worldwide
  
  * These brands'annual sales are superior to 50 million euros.

Human resources at L'Oréal

64,600 employees in 66 countries

A commitment to developing the competencies and expertise of all employees to support the group's continued growth:
- 5 development centres around the globe - in Shanghai, Rio de Janeiro, Dubai, New York and Paris
- An online, next-generation learning offer
- A wide range of in-house tailored training programmes

A global recruitment strategy:
- Ground-breaking business games: REVEAL by L'Oréal the new online business game, and L'Oréal Brandstorm the creative marketing competition.
- A strategy of continuous recruitment of talented graduates.
- A vigorous management trainee programme, strongly focused on our rapidly developing markets.
- Internship opportunities: 80% of young graduates hired in 2009 were former L'Oréal interns.

A strong commitment to diversity:
- 110 nationalities
- 57% of managers and 38% of management committee members are women
- over 7500 managers in 32 countries have attended L'Oréal's diversity training programme

L'Oréal is ranked among the world's most attractive employers (n°3 worldwide among FMCG companies for business students) (2009 Universum survey).

L'Oréal's brand portfolio

• Biotherm
• Cacherel
• Diesel
• Garnier
• Giorgio Armani
• Helena Rubenstein
• Innéov
• Keraskin Esthetics
• Kérastase
• Kiehl's
• Lancôme
• La Roche-Posay
• Le Club des Créateurs
• L'Oréal Paris
• L'Oréal Professionnel
• Matrix
• Maybelline NY
• Mizani
• Ralph Lauren
• Redken
• Sanoflore
• Shu Uemura
• Shu Uemura Art of Hair
• SkinCeuticals
• Softsheen Carson
• The Body Shop
• Vichy
• Viktor & Rolf
• YSL Beauté

The Yves Saint Laurent integration story

In June 2008, PPR, the French multinational holding company specialised in retail shops and luxury brands, sold Yves Saint Laurent Beauté to L'Oréal for €1.15 billion, following authorisation from the competition authorities. 

The acquisition of YSL Beauté presented a number of challenges for the cosmetics giant, not to mention the huge undertaking that was the integration of the brand into its Luxury Products division without making any of the 1300 employees redundant - an achievement that saw L'Oréal scoop the Trophée du Capital Humain 2010 prize in France for management of employment.

"It's quite a big commitment to make," says Skingsley. "When we take over an organisation with a large number of people, it's a significant commitment to say we will integrate them with minimum loss of employment and then deliver on it. And then on top of that, we did it in 2009 in an economic context that was really pretty unfavorable."

Explaining what it was exactly that enabled L'Oréal to be in a position to deliver on that promise Skingsley says: "Firstly, we mobilised the whole organisation to help make it happen. It wasn't a single division or a single country, and even though it was piloted by our luxury division, it was actually an effort by the entire human resources organisation to create the amount of mobility necessary to be able to integrate Yves Saint Laurent people, not only into the luxury structure, but sometimes into other parts of the business, which we did."

The integration programme did take time however and Skingsley highlights the fact that it was important not to rush the process. "We took 18 months to complete the integration of Yves Saint Laurent, but because we gave ourselves that timeframe, it meant that we were able to integrate the vast majority of employees into that division and make them feel a constructive and happy part of the L'Oréal organisation," explains Skingsley.

However, there was also a cultural challenge that the integration presented, since YSL Beauté had already changed hands four times in the previous 20 years and the prospect of having a fifth owner was quite unsettling for the staff. "We had to make sure that they felt comfortable and understood the culture they were moving into, and that's something you don't do in one meeting," explains Skingsley. "It was a long engagement, which took a lot of investment in terms of both time and money, which was primarily done by the human resource teams."

But these efforts clearly paid off and the best proof of how successful the integration was, according to Skinsgley, is the fact that the YSL business is now in such great shape with double digit growth around the world. "You couldn't do that if you didn't have motivated, efficient employees," he says. "Not only have we kept the people, but we've kept them in a reasonably positive way, and the best indication of that is the business results."