Enterprise Rent-A-Car fosters an entrepreneurial spirit among its employees and rewards them accordingly, says Tom Washington
With big insurance companies faltering, the car manufacturing industry in crisis and corporate accounts being cut back, the global recession has threatened to put the brakes on the car rental industry. Some hire firms have cut costs aggressively by reducing fleet size, and in some cases headcount, in the face of declining demand.
Enterprise Rent-A-Car Company, with its roots firmly in the US, has felt the pressure from all fronts, with American insurers and car manufacturers hitting rock bottom in recent months. But European HR director Donna Miller, while conceding it has been a tough 12 months, says she has seen Enterprise bounce back from tough times before during her 19 years with the company.
“This is probably the fourth downturn since I have worked here,” she says. “Every time we have gone through one of these business cycles, we emerge much stronger because we learn from the process. It is easy to get fat and happy when times are good, but when they are not so good, it gives us the opportunity to evaluate what we are doing.”
The firm’s business model is simple. Enterprise works with big insurers and individuals to provide replacement cars after accidents or breakdowns, and supplies customers who need to hire a vehicle occasionally. It boasts 6,000 offices in its US home market and 330 in the UK, plus others dotted across Germany and Ireland.
Enterprise’s success is driven by a philosophy that has remained intact since the company was founded by Jack Taylor in 1957: take care of your customers and employees first, and the profits will follow. “Ultimately, we are in the customer services business,” says Miller. “Focusing on the value of the organisation is what defines us; cars just happen to be our product. We would run our business in the same way if we sold medical products or tomatoes at the side of the road.”
To maintain this high standard of customer service, Enterprise aims to attract a high calibre of staff, so benefits are benchmarked not against other car rental firms, but against other graduate recruiters. “Other car rental companies are not our competitors from a recruitment or a benefits standpoint because they are, typically, just not hiring the same kind of people,” says Miller. “We compare ourselves against fast-moving consumer goods [FMCG] companies and other graduate recruiters, such as retailers, retail banks and accountancy firms.”
However, graduates should not expect to receive a large salary immediately, as their peers may do at some other leading graduate recruiters. Average first-year earnings at Enterprise range from £16,000 to £19,000, with a possible £2,000 bonus if recruits complete their management training. “You can go to an awful lot of places and make more money in your first year than you would here,” says Miller. “Our philosophy is that we pay people based on what they know. So when they start with us, they do not know a lot about our business, and therefore they are not able to contribute a tremendous amount.”
Monthly bonus
But once they are in a management role, all employees, including non-sales staff, are eligible for a monthly bonus, based on a percentage of the profits from their area.
Miller says this method of reward promotes a sense of ownership among the workforce, which, in turn, drives an entrepreneurial culture. “The nice thing is that it allows everybody to feel part of the business. It drives a culture that makes people really care, and feel that they will do whatever they need to do to make the business better. It compels people to succeed.”
Part of this culture involves employees coming up with ideas to improve the business. Enterprise runs an internal contest based on an idea borrowed from American Airlines, where a flight attendant noticed most first-class passengers did not eat the olives in the in-flight salad and recommended removing them, which saved the airline $40,000 in 1987. Enterprise now gives an “Olive” award to staff who make such suggestions, and recently saved about £15,000 a year on manufacturing costs by combining the tax disc and no smoking sticker in all its rental cars. Employees who make a successful recommendation receive personal thank-you emails from the directors, with an email going out to all staff announcing their achievement. “If you give them the autonomy to come up with ideas and give them the kudos at the end, there is no end to what people come up with,” says Miller.
A similar entrepreneurial mentality is applied to the company’s pension scheme. Enterprise offers a stakeholder scheme to all employees, who are eligible for an annual employer contribution after their first 12 months of service. This contribution is based on worldwide company profitability, and is given on the last day of the financial year. It is calculated according to salary and length of service. Historically, it has represented 5% of the firm’s global profits.
Apart from these benefits, there is a paternalistic feel to much of the rest of its package. This is perhaps unsurprising given the firm’s central mission statement and the fact that the average age of its full-time staff is 27.
The package includes several fully employer-paid perks, including private medical insurance, life assurance, long- and short-term disability cover, and a comprehensive employee assistance programme (EAP). The EAP offers staff not only the traditional confidential counselling service, but also a referral service that enables them to request information on services such as childcare. The provider will source the best options available and send a factsheet back to the employee within two days.
“The core benefits we provide protect people in the instance that they get ill or in the event something tragic happens,” says Miller. “The EAP allows staff to focus on the things that are important to them. Previously, employees would have spent time doing this away from work, but now all the legwork is done for them.”
Total reward†
Looking to the future, Miller would like to see one benefits tool imported from Enterprise’s US parent company - total reward statements. “I think that, as an employee, you know what your financial package is, but when you start adding in other benefits, you see that your compensation is considerably more,” she says.
The problem with giving generous paternalistic benefits to new graduates, says Miller, is that the young people have never had to buy such perks for themselves, so do not appreciate the value of something like fully employer-paid PMI. Total reward statements would, therefore, surprise employees with the generosity of the package.
Miller says this would add to the focus and engagement of staff at a time when Enterprise is poised for a period of growth. In the US, the company offers a number of other services, including fleet management, car sales and a truck rental division - all of which are set to expand across the Atlantic in the coming years
Career profile: Donna Miller
Donna Miller, European HR director at Enterprise Rent-A-Car Company, began her career at the car hire firm as a management trainee before applying for an internal HR vacancy in Carolina, US. She later moved on to HR management roles in New York and Canada.
As the company expanded from the US into Europe, Miller was involved in setting up offices at grass-roots level when she moved to the UK in 2000. Her remit now covers Enterprise businesses in the UK, Ireland and Germany.
Miller takes a very hands-on approach to choosing employee benefits providers. “One of the first jobs I had in the UK was setting up the stakeholder pension scheme,” she says. “Our consultants, Buck, affectionately called us oddballs because of our tender process, which involved physically going to visit them all over the country. We wanted to see who would be taking our calls, how the process works and where they are based.
“That was a really fun and interesting piece of work. Regardless of what benefit we are looking for, when we select a provider, we take it all really seriously.”
Enterprise at a glance…
Enterprise Rent-A-Car Company was founded in 1957 in St Louis, Missouri by Jack Taylor and remains privately owned by the Taylor family. Its primary activities are renting vehicles to customers for business, emergency or leisure reasons, but it also offers car retail and fleet management services in the US.
Enterprise is one of the world’s largest car rental companies, with more than 6,000 offices in the US and over 900 across Canada, the UK, Germany and Ireland. It has also recently expanded into Puerto Rico. Annual worldwide revenue was $10.1 billion in 2008. Its full-year accounts for 2008 are not yet available, but turnover for UK operations was £236.6 million in 2007, up 15% on 2006, and pre-tax profit for the same year was £13 million.
Enterprise’s UK office was set up in 1994 and employs about 3,000 staff across 330 branches, including at Heathrow and Gatwick airports.
Its UK workforce is 69% male and 31% female, with an average age of 27. It has 800 part-time staff with an average age of 45, who are mostly employed to clean and service the rental cars, and drive them to designated pick-up points. The average length of service for Enterprise staff is four years.
The benefits:
Pension
Stakeholder scheme. An annual employer contribution depends on company profitability. Historically, this has represented 5% of company profits.
Private medical cover
Fully employer-paid for all employees. Staff can pay extra to add cover for their family members.
Long-term disability
Fully employer-paid for all employees at 60% of the previous year’s remuneration.
Life assurance
Fully employer-paid for all employees at three-times annual remuneration.
Voluntary benefits
Bikes-for-work, retail vouchers, childcare vouchers, eyecare vouchers.
Holidays
25 days, increasing in line with service to a maximum of 30 days a year.
Employee assistance programme
Available to all employees.
Other benefits
Include adoption assistance programme, charitable giving, international language programme.
Case study:
Joe Bowen-Thomas, business manager for the national sales department, joined Enterprise straight from university 11 years ago.
His duties include working closely with sales managers on tenders for new business opportunities, while also working with existing clients to ensure the correct level of service is maintained. He is also business manager for the firm’s contact centre in Aldershot, which has 150 staff.
Bowen-Thomas says Enterprise’s voluntary benefits are well regarded among staff, particularly some of the lifestyle perks. “I think the reward package is great,” he explains. “I recently took up the new bikes-for-work scheme. I live about 10 miles away, so it is a great way to combine exercise with being able to ride to work.
“I also think the give-as-you-earn charity donations is a worthwhile scheme. You do not feel like you are touching your wallet because it is coming directly out of your salary.”
