National Express was previously hampered by retention issues, but creative use of perks has helped staff stay on board, says Kate Donovan
When scheduled coach operator National Express discovered its staff turnover had hit 50%, it became apparent that its lack of employee benefits was clearly taking its toll. Prior to 2004, the company had made no efforts to track employee turnover or absenteeism, but ignorance proved far from blissful when the first set of results showed staff turnover was running at approximately 50%. This had a negative impact on the business, as Karen O’Reilly, HR director, explains: “Managers spent most of the time recruiting and mopping up after poor performance.”
As a result, O’Reilly set about putting together a three-year HR strategy that was more closely aligned with the organisation’s business strategy, and to which reward and benefits were integral. She gained approval for the strategy from the senior management team in 2004. Now, each year she sits down with management to review it and to plan the implementation of the next phase into the business.
So far, the strategy appears to be working. By November 2006, staff turnover had reduced to 27%, and the organisation’s benefits package had expanded from merely an offer of free coach travel to staff, to a plethora of inexpensive, yet effective, benefits.
In June this year, National Express scooped the Employee Benefits 2007 Grand Prix award along with the award for the most effective benefits strategy for organisations with more than a thousand employees.
The reduction in staff turnover has brought its rate in line with rivals and is an indicator that the company has managed to make a difference. Trade unionist Graham Stevenson, T&G’s national organiser for transport, says: “Staff turnover at National Express is in line with industry norms. It is neither especially good nor especially bad. Bus companies all face something like one-fifth of staff leaving each year.”
When looking to introduce a new benefits package, keeping a control on costs was essential. In most cases, National Express is also only required to carry out minimal administration, with the bulk of this being undertaken by benefits’ providers. “It came down to, if we can get the turnover down then we can work with the people that we know are going to stay with us, and then that’s absolutely fine to put money in. But while you are going through that process [the solution] needs to be as cheap and cheerful as possible [and] still hit everybody’s buttons,” says O’Reilly.
This was not a simple task in a company with employees in a diverse range of roles.
The three biggest employee groups at National Express are its drivers; contact centre staff and customer experience employees, who are responsible for tasks such as ticket sales.
Partner drivers
Its greatest challenge is with this first group, owing to the organisation’s population of partner drivers. National Express contracts its competitors to run certain coach routes. These are manned by partner drivers who are the employees of the other organisations and are not on the payroll of National Express, which is therefore restricted to offering them benefits that do not go through payroll. “The fact we have a driving fleet that is all over the country, some of which we employ and some of which we don’t, brings its own challenges,” explains O’Reilly.
National Express’s voluntary benefits scheme, which was introduced under its 2004 HR strategy, however, has enabled it to include partner drivers in its benefits offering. The Privilege Club, which is offered mainly to drivers, provides access to discounted products and services which are available to all staff online through provider Perkz; free coach travel for themselves and a spouse, with discounted travel for others; and access to various competitions.
“There’s a newsletter that goes out explaining what’s new, what sort of things are coming up and what staff can do in terms of training and competitions. So that’s trying to make the driving fleet feel more included,” says O’Reilly.
The fact that National Express is the official travel supplier to Wembley stadium as well as being an official supporter of the football association also has benefits for employees including increased ticket availability for popular events and competition prize draws to win tickets. Senior management also use the tickets as part of an employee recognition scheme. They are able to nominate staff who they feel have done something to add to the business to be considered for a reward that includes tickets and some corporate hospitality.
In a separate recognition scheme, National Express organises competitions on its intranet site, which was launched in 2004. O’Reilly believes it is important to demonstrate the company recognises employees’ value. “People will leave an organisation because they leave their manager, and generally they leave their manager because the manager doesn’t value them or doesn’t show their value or worth in some way,” she says,Employees, including partner drivers, can access the company intranet from home, and all National Express worksites provide computer facilities. Competitions and information about other benefits are also promoted on staff noticeboards.
Part of the HR strategy has also been aimed at attracting women to the traditionally male-dominated business.
National Express has earned a Tommy’s Pregnancy Accreditation for its maternity benefits and the support and information provided to new parents. This includes a family-friendly scheme through which parents are sent a gift box containing around £70-worth of goods upon the birth of a child.
One aspect of National Express’s benefits package that O’Reilly is particularly proud of is its long service awards. Prior to the redevelopment of its benefits package, the company offered a cash-based loyalty scheme which consisted of £100 for 15 years’ services, £200 after 25 years, £300 for 35 years’ service and £400 after 40 years.
Board approval
Its new long service scheme, however, now offers employees gifts such as champagne or a luxury hamper after five years’ service, electrical goods on reaching 10 years; hot air ballooning or a trip to Paris after 15 years, a trip on the Orient Express or helicopter lessons after 20 years and a Rolex Oyster watch, powerboat racing, or a trip to Egypt upon reaching 25 years’ service.
O’Reilly explains that she was pleased to obtain board approval for the scheme because it offered no immediate commercial benefit for the organisation.
The changes to the long service awards were made as a result of feedback from the company’s annual employee engagement surveys. “We had lots and lots of comments about long service [such as] ‘£100 isn’t worth getting out of bed for’, and so that’s where it came from,” says O’Reilly.
National Express also makes on-the-spot awards to its call centre employees to recognise good performance.
Julie Naismith, a principal at Towers Perrin, says that boosting long service awards is a move that is popular among staff. However, in order to improve business performance, she says it is important for employers to combine long service awards with on-the-spot rewards for performance.
National Express also takes a paternalistic approach in regard to some of its benefits. Its Helping Hands interest-free loan for staff in need of support - a concept which came out of a management conference - has proved a success.
Employees can go to their manager with a form explaining how much they need and why. The terms of the loan agreement and the period in which the amount borrowed is to be repaid are set according to the employees’ circumstances. In some cases, loans are completely written off.
“It’s very individual and it’s kept confidential so nobody else knows about it, so it’s between you and your manager and the payroll team. We live in a debt society and people say you need to save at least three months’ of your salary, well show me somebody who does that, I don’t know anybody,” explains O’Reilly. So far, 78 employees have taken up the short-term interest free loan.
The company’s employee assistance programme that was set up at the beginning of the HR strategy, has proved to be of great help to those staff who have had need of the service, although take up has not been significant. “[Take up has] not been huge, but it would be in line with what you expect. As a result of it, we’ve had people go on for further counselling, and further help and support, so it’s been very good.”
The improvement to the benefits package has not gone unnoticed by National Express employees. The results of the staff survey for the last two years have identified benefits and pay as the area where there has been most change in the organisation overall.
National Express at a glance†
The formation of the National Bus Company in 1968 brought many of the original independent express coach companies together and soon led to a more co-ordinated policy of express coach planning. This resulted in a ‘National’ branding of the service in 1972 and the introduction of an all-white livery for vehicles. The brand name, National Express, first appeared on publicity materials in 1974 and was then introduced onto vehicles in 1978.
National Express is the coach division of the National Express Group (NEG), and employs 1,600 staff in the UK.
National Express provides links between more than 1,000 destinations and carries 19 million passengers every year.
Its workforce is male-dominated with only 29.4% being women. Of its driving population, 88% are male.
Career profile
Karen O’Reilly’s early temping role at pub leisure firm Mitchells & Butlers was the start of an HR career that has since seen her work at organisations such as Birmingham City Council and Wolverhampton & Dudley Breweries (now Marston’s).
While temping at Mitchells & Butlers, a training officer went off sick and O’Reilly stepped up to lead a course for tenants. “It was awful, but actually I thought I enjoyed that side of it so that’s what I did. I never had a real plan,” she says.
She subsequently moved on to Birmingham City Council as a training officer, and followed this with a variety of HR roles at Wolverhampton and Dudley Breweries, which culminated in her taking up the position of head of people development.
Working in the brewing industry helped prepare O’Reilly for her work at National Express. The tenanted, managed and owned pub arrangements raised similar issues in terms of benefits to those faced at National Express with partner drivers.
O’Reilly has been with National Express for the past three years. She initially joined as head of HR and people development, but has recently been promoted to HR director.
Her aim for the company is to now to clinch an Investors in People standard. “I think we’ve done more than we need to do to get that recognition and I think it’s made the [firm] a better place to work.”
Case study - Holiday registers with staff
Neil Watson is a team manager at the National Express contact centre, which he joined, initially as an adviser, some six years ago.
When he began working for the firm, Watson only received the employee bus pass but has since made the most of the subsequent benefits developments.
Despite the expense of getting married and doing up his house last year, Watson has been able to afford a summer holiday this year by booking at a discounted rate via the company’s voluntary benefits website. “I’m a big advocate of the benefits. I’m always trying to use them and I’m always telling my team, ‘make sure you look and register for all these things’. If I’m thinking of buying anything now I’ll always have a look at work and see what benefits I can get,” he says.
After five years with the company, Watson was awarded a hamper for long service. “It included luxury goods: biscuits, cheese, chocolates, that kind of thing. It was really good stuff,” he says.
Benefits box
Pensions
A trust-based money purchase scheme into which employees contribute 5% of their pensionable pay and the company matches. The option to pay additional voluntary contributions is also available to employees. The contributions and other scheme assets are held in a separate trust fund.
Healthcare and wellbeing
Employee assistance programme, not-for-profit health insurance, on-site health checks such as blood pressure and cholesterol testing.
Voluntary benefits
Discounted travel; discounts on services and products such as Dell’s home and home office products and a dry-cleaning and a laundering service. Discounted car and household insurance. Payroll giving. Holiday trading.
Travel
Free travel on bus services operated by the National Express Group. The staff travel pass allows employees to book travel tickets online.
Salary sacrifice
Tax-efficient cycle-to-work scheme and childcare vouchers.
