A benefits package that attracts and retains the most talented staff while reducing employee costs is at the core of web hosting provider Peer 1 Hosting’s reward strategy.
Designed primarily by managing director Dominic Monkhouse, the package has remained the same since the organisation’s UK operations started up in 2009.
“I think if you have low staff turnover and recruitment costs are reduced, then the benefits just cost nothing in comparison to what you are gaining,” says Monkhouse. “You just have to take a holistic view.” Kate Little, people partner at Peer 1, says the strategy to retain staff is certainly working, because the first four employees hired in 2009 still work for the firm.
Peer 1 Hosting currently has 90 UK staff at offices in London, Portsmouth and Southampton and is looking to recruit 20 more.
The organisation’s aim is to expand while retaining a close-knit feel. Monkhouse would prefer each office not to exceed about 120 employees. This helps to ensure the company is hiring the best talent because anyone not doing their job properly cannot hide in a large workforce, he says.
“Our aim is not to be the biggest hosting company in the world; we just want to be the best,” he explains.
Exit pay
To check that new staff are happy, two weeks after they have joined, Monkhouse asks them whether they think they have made the right choice in working for Peer 1 Hosting. The employee is then offered £1,000 to leave there and then if they feel they have made the wrong choice, no questions asked. It is a benefit no one has taken up yet, says Monkhouse.
Peer 1 Hosting uses its benefits to impress and help recruit the very best ‘A players’, says Monkhouse. For example, the Southampton workforce is due to move offices on 4 March and the company has fitted out the new premises with slides, an indoor garden, a treehouse, a wood-burning pizza oven and an outside patio area.
Monkhouse adds: “We want everyone who walks through the door for an interview to want to work here.”
The organisation offers its core benefits to employees after they have completed 90 days’ service. These include matched employer contributions of up to 4% to its contract-based defined contribution (DC) pension scheme; medical, dental and travel insurance; and a flexible benefits scheme through which staff can use a salary sacrifice arrangement to upgrade insurances, buy childcare vouchers or join the bikes-for-work scheme.
Peer 1 also covers the cost of an on-site gym at its Portsmouth office and employees at the Southampton office each receive £25 a monthtowards gym membership. Meanwhile, London-based staff that joined the organisation under Transfer of Undertakings (Protection of Employment) (Tupe) regulations after Peer 1’s acquisition of Netbenefit in 2012 receive a slightly more generous gym membership benefit as set out in contracts with their previous employer.
After six months with the organisation, employees are also entitled to death-in-service at four-times their basic salary and income protection insurance which will pay 65% of their salary for up to five years.
Core benefit entitlements
Monkhouse says it is important for staff to use their core benefit entitlements when needed, even if it takes some prompting from the organisation to ensure they do.
“I have to say there is a bit of nannying involved,” he says. “The core benefits are offered free for staff, but they do have to tick the box to say they want to use them.
“We found out last year that four staff members who would have been entitled to private medical cover and needed it during the course of the year had not ticked the box. This year, we made sure of sending a note to all employees reminding them to tick the box.”
Even if an employee has forgotten to tick the core benefits box, Peer 1 is likely to try to help them out if it can.
Little says: “We had one member of staff who injured her knee in a cycling accident and it was affecting her quality of life massively. Unfortunately, she thought she had ticked the medical cover box but hadn’t, so we looked internally and found the £1,000 budget for her to go and sort out the problem.”
Peer 1 Hosting also offers staff a range of smaller, low-cost benefits such as a beer fridge, pool table and putting green, which helps to create a fun atmosphere in the office. It also runs a dress-up-smart day each month and if any employee forgets to dress up, they have to make a £10 donation to charity.
Monkhouse says: “The putting green mats cost less than carpet tiles to install, but it is something that everyone remembers.” Peer 1 also encourages employees to come up with ideas that will benefit the whole office. As long as the cost is below £100, they can implement the idea and charge it on expenses without needing management approval.
“Our head of customer experience bought Nerf guns, which has created a Nerf war in the office,” says Little.
Personal responsibility
The company also uses benefits to promote a sense of personal responsibility among staff. When each employee starts work at Peer 1 Hosting, they are given a black book in which they are asked to note any changes they would make at the organisation. In employees’ first six months with Peer 1, Monkhouse has lunch with each of them at least six times to discuss the suggestions they have noted down.
He also asks employees to look at any rules the company uses when dealing with customers and point out any that they think do not make sense. Last year, employees were paid £10 for each nonsensical rule they found. When Monkhouse repeated this exercise with the US office, he received 200 responses.
“A lot of staff will have been thinking about this for a long time and are really glad to be asked,” says Monkhouse. “We will work through them all and pay out a few thousand dollars, but it will be the best money we have ever spent because the impact on all those people is that they have taken that pebble out of their shoe. “Hopefully, over the next few months when anything else crops up, they will let us know and we can fix it.”
Although Monkhouse hopes to keep each of Peer 1’s locations small-scale to ensure everyone feels part of the team, there have been efforts to bring the global business together through its ‘Team Awesome’ scheme.
This is a global recognition scheme to reward employees who have upheld the organisation’s values. An employee can nominate another member of staff from any office around the world for an award and if that person wins, they receive gift vouchers.
Little says: “At the locations we have, a quick ‘thank you’ is great but Team Awesome can get the impact on the individual. It is about being one company.”
PEER 1 HOSTING AT A GLANCE
Peer 1 Hosting was established in 1999 in Vancouver, Canada and hosted websites such as blog site Word Press and YouTube before it was bought by Google. It operates 20 offi ces globally, including in the US, Amsterdam, Frankfurt, Portsmouth and London.
The UK operations were opened in 2009 in Southampton, followed by the opening of a data centre in Portsmouth in 2011.
In July 2012, the company acquired another hosting business, Netbenefit, which helped to take its European revenue to £25 million last year, an increase of about 140% on 2011, says managing director Dominic Monkhouse.
In December 2012, it was announced that Peer 1 Hosting is to be purchased by Canadian cable provider Cogeco Cable.
CAREER HISTORIES
Dominic Monkhouse has been managing director since Peer 1 Hosting’s UK operations opened in January 2009. He was the driving force in getting the office initially based in Southampton rather than London.
“We are in Southampton because I have run other IT companies in and around London and getting staff turnover under 20% there is really hard, even if you are good at it,” he says.
“Staff turnover here in Southampton has been much lower.”
Monkhouse also holds the position of senior vice-president of customer service at the organisation Before joining Peer 1 Hosting, Monkhouse was managing director at IT Lab, which he helped to transform from a support agency to an IT service provider. He also served as managing director at web hosting organisation Rackspace.
Before his roles in IT, Monkhouse worked in sales for pharmaceutical company Glaxo and in store management at Marks and Spencer.
Kate Little has been people partner at Peer 1 Hosting for six months after falling into HR by accident, she says. She took a position in HR administration with recruitment company aap3 in 2005. She was then promoted to HR adviser before achieving the position of HR business partner in 2010.
“I wanted a new challenge and when I came for my interview with Dominic at Peer 1 Hosting, he asked me what my ideal job would be,” says Little. “I said it would be working with good people and facing huge challenges, and that is where I am today. It was a huge opportunity I couldn’t possibly turn down.”
Little says her biggest current challenge is finding the time to handle all the organisation’s recruitment needs.
“We can’t hire people quickly enough,” she says
CASE STUDY: Donya Fitzsimmons, business development consultant
Donya Fitzsimmons, a business development consultant, has been with Peer 1 Hosting for two years. She values the organisation’s bikes-for-work scheme because it provides her with a means of getting to work and allows her to take part in fundraising activities.
“I live in Salisbury, which is about 27 miles to and from work, so when the weather is OK I try to cycle to work at least once a week and I also use the bike at weekends,” she says.
“We do a lot of charity work at the company, with our second charity bike ride taking place in April this year.”
Fitzsimmons says there are other smaller benefits the organisation offers that staff value, such as free food days, which take place on the last day before employees are paid.
She adds that one of the biggest benefits of working for Peer 1 Hosting is the people and the culture.
THE BENEFITS
Employees are entitled to core benefits after 90 days with the organisation.
Pension
- Defined contribution (DC) scheme.
- Peer 1 Hosting will match employee contributions up to 4%.
Insurances
- Private medical insurance.
- Dental insurance.
- Death-in-service: four-times basic salary, available after six months’ service.
- Income protection after six months’ service. Pays 65% of basic salary for up to five years.
- Individual travel insurance.
Flexible benefits
- Employees can sacrifice 2% of salary to extend medical and dental insurance to include partners and family and screening services, and upgrade travel insurance to include winter sports coverage.
- Salary sacrifice arrangements available for childcare vouchers and bikes for work.
Other benefits
- Gym membership.
- One-off reimbursement of up to £275 on gym equipment for home.
- Reimbursement for training courses of up to £3,500 a year.
- Holiday purchase of up to five extra days a year.
- Days off for long service.
- Two volunteering days a year on full pay.
