Bringing together two or more organisations is a demanding experience. Owain Thomas discovers how two very different firms are using workplace benefits to smooth the transition.
- A massive corporate merger requires considered planning and understanding of the workforces involved
- Dixons Carphone is tailoring benefits to bring everyone together and ensure no-one is worse off
- Enabling employees from both sides of the company to work together and recognise each other is vital
The Dixons Group and Carphone Warehouse merger has been described as one of the largest in the UK retail industry. The £3.8bn deal brings the company to around 3,000 stores and sales of almost £11bn per year with a combined workforce of about 46,000.
It was announced in August 2014 and shortly after the takeover of failed rival Phones 4u.
Clearly bringing together companies of this magnitiude takes time but a year on the plans are now coming to fruition.
Speaking at PBUK, group reward director Jenny Davidson explained how the organisation started by identifying the culture and values it wanted to adopt.
"We really want to be a business where everyone is interested in performing for us and we really want colleagues to feel supported by the organisation and that they are rewarded and recognised," she said.
"Two of the initiatives kicked off straight after the merger were to really look at our reward platforms and the benefits we offer staff, and also the way we recognise people across the group."
This has led to the unveiling of a whole new benefits offering due to be formally launched on 1 October.
Perhaps the biggest element of this is a flexible benefits fund for the roughly 2,000 contact centre staff who will all be brought together under one roof in North Acton.
The core benefits will be limited (for most people just one time salary life insurance) to give everyone the maximum choice possible. For people already entitled to more than the core benefits, they will be given a flex fund which will allow them to buy back these benefits - or to choose others instead.
The net result is that no-one will be worse off under the new arrangement and a minimum flex fund will be provided so everyone will be able to buy something.
"Because everyone is going to come together in one head office, everybody working in the same building will be offered the same benefits and the same holidays. We're going to offer a flex type approach so that we can harmonise benefits and they can buy back what they have today," explained Davidson. "The message we can go out to staff with is that you'll be no worse off with the same benefits, but if you didn't want the benefits you have today you can cash those in and buy something else."
The other major change is the voluntary benefits package that will be available to all 46,000 staff and which includes some 25 options under five sections: My Finances, My Protection, My Health and Wellbeing, My Lifestyle, and My Extras.
While this may seem excessive to some, Davidson has deliberately chosen to include such a wide range.
"We're really conscious that when we launch this we've got to launch it across the whole organisation - for those people in stores, in the warehouse, drivers delivering washing machines, we want this to be across the board so there's got to be something in it for everybody," she noted.
"We want to make sure everybody has a full range of choice - it is pretty extensive. We are expecting some of the benefits to have pretty low take-up rates, but we're fine with that as long as there's something there to suit you and your lifestyle," she added.
All this will be delivered on a new online platform where people can access all their benefits, the discounts that are on offer, total reward statements and payslips in one place.
A new contract of employment and benefits package is also being put together for new starters.
Much of this approach has been driven by the generally young workforce population with 57% being Generation Y (40%) and Generation Z (17%). The majority of employees earn less than £27,000 per year with a substantial number working part-time of 20 hours per week or less. And the majority are single.
"So when it comes to thinking about reward and benefits and how we recognise people, it's really important to have this as a backdrop," Davidson added.
One of the key benefits being aligned is holiday entitlement. At present Carphone Warehouse staff receive 24 days per year plus their birthday, seen as a "magic moment" within the group's benefits community.
So that will be brought over to Dixons Group staff as well, with those entitled to more holiday given enough in the flex fund to buy that entitlement back if they wish.
Dixons Carphone also wants to encourage employees to use the products they sell and become brand ambassadors, so will encourage this via one discount card for both stores - although at a different rate in each store. And the helping hand loan is being opened-up to a more positive approach.
"We have to date had a hardship loan so if people are having problems and can't get help from the bank then we will lend them up to £1,000 and they pay that back out of their monthly salary," said Davidson. "We're changing that because actually it's negative. If we're willing to loan people money and then let them pay it back, why don't we let them use it for other things? So it could be for your first car, for a deposit for your house or flat rental, so it doesn't really need to be hardship."
As if that was not enough to deal with, a group-wide recognition programme is being introduced too. Dixons launched a platform 12 months ago that has seen 148,000 thank you messages sent and £355,000 spent on awards. Employees can nominate colleagues to give them points in their account which are then used to buy products or Currys PC World vouchers. However the Carphone group uses more informal recognition such team drinks and sending chocolates to celebrate a birthday.
"We're bringing the two together by using the platform from Dixons but keeping some of that underlying magic from Carphone - that uniqueness to actually bring it together into one," said Davidson.
"We need to do this because we've got colleagues working alongside each other and at the moment they can't formally recognise each other within a platform.
"They can give each other a bottle of wine or say thank you, but this is really a way of getting colleagues across all the different brands to come together as one team and one company."
A roadmap has already been put in place to keep the momentum going. Following a low key launch in October, further Christmas discounts will be added in December with the opening of the Christmas club savings scheme earmarked for January.
February is expected to see the unveiling of the save as you earn share scheme offering while further into the future the company is eyeing a review of its private medical insurance scheme with a potential move to a healthcare trust arrangement.
"So we do have a roadmap where every couple of months we'll launch something new, or make some kind of improvements which will keep people engaged and interested in the platform.
"We have to do this. If we don't do this we're not really bringing the company together as one team, one culture," concluded Davidson.
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