Employer profile: L’Oreal UK

Case study: Parent-friendly, winning culture at L’Oreal

Jamie Lane, commercial director for L’Oreal UK’s brand L’Oreal Paris, has worked for the firm for nine years. He manages the sales team for the UK and looks after accounts with retailers such as Tesco, Asda and Boots.

As a new father, Lane particularly appreciates the company’s bikes-for-work scheme and childcare vouchers.

“The bikes-for-work scheme is very good which I got on a year ago,” he says. “I am able to use my bike to get to the office and also to take my child to nursery, which the childcare vouchers pay for.”

Lane also values the company’s culture. “It is also about the people I come to work with,” he says. “They are similar-minded, equally ambitious, creative and quite inspirational. They are like friends rather than colleagues.”

L’Oreal UK is keen to ensure its reward package matches the glamour of its advertising campaigns, says Nicola Sullivan

Cosmetics giant L’Oreal UK is not only interested in convincing its customers that they are ‘worth it’. It has also taken steps to ensure its reward package makes its employees feel equally valued. It is particularly important for the firm to put as much joie de vivre into its reward strategy as it does into its star-studded advertising campaigns, if it is to attract and retain the talent it needs to achieve its business objectives and further growth, particularly in western Europe.

The L’Oreal Group, of which L’Oreal UK is the fourth biggest subsidiary, wants to gain a billion more customers by 2020 and is targeting the emerging markets, where it sees the biggest growth opportunities.

Matthew Scott, HR compensations and benefits director at L’Oreal UK, says: “Today, L’Oreal makes the bulk of its sales with less than 15% of the world’s population, so there is a very big opportunity for growth.”

In its quest to win more consumers, L’Oreal has established research centres in most continents to develop specialised products tailored to the hair and skin types of different ethnic groups. But achieving significant growth in Europe is a challenge, explains Scott. In 2010, the L’Oreal Group’s cosmetics sales in western Europe grew by 2.6% compared with 32.6% in Latin America.

“The HR team’s mission is to attract and retain the talent we need to achieve the broader business mission,” says Scott. One of the most effective ways to do this is to ensure employees are offered an attractive and competitive package.

One of L’Oreal UK’s main priorities is to help staff understand the value of its trust-based defined contribution (DC) pension scheme, which was awarded a Pension Quality Mark (PQM) by the National Association of Pension Funds in June this year.

The PQM is awarded to employers that meet these criteria: good contribution rates (amounting to a total of 10% or more), good-quality governance and low charges, plus clear and ongoing communication with scheme members.

Engaging staff with pensions

A particular challenge facing L’Oreal UK is how to engage its 2,000 beauty consultants with pensions. Take-up among this group currently stands at 13% “We have 3,000 employees in the UK, 2,000 of whom are beauty consultants,” says Scott. “They tend to work as individuals or in pairs behind counters at retail stores like Boots and Selfridges, therefore they are not networked from a computer point of view and infrequently get the opportunity to come together as a team. There is a huge communication challenge with those employees.”

To find out what has stopped employees joining its pension scheme, L’Oreal UK conducted research among its workforce. It targeted a wide range of staff, including graduate trainees, senior managers and beauty consultants. “They all pretty much said the same thing on pensions, which was that they know pensions are important, but they lack confidence in understanding them,” says Scott. “They want to be told what to do and want to be guided by the company.

“If they do not join when they start at the company, then they very rarely get around to it. They get stuck when considering investment options and they need support, encouragement and on-hand guidance.”

As part of its efforts to make pensions more accessible for staff, L’Oreal UK has removed the six-month service requirement before an employee can join the scheme, as well as simplifying the contribution arrangements.

Employees now contribute a minimum of 4%. Also, HR staff have received training to equip them better to answer pension queries from employees.

“HR staff themselves can actually find pensions confusing,” says Scott. “It is the generalist HR staff who are often on the front line when they are meeting a new employee and doing inductions. If an employee cannot read the literature and wants to ask questions but cannot get the response they need, it [results in] a lot of barriers.”

Attitudes to retirement

To help with this, the company produced a new pension booklet using simplified, less technical language, as well as a video containing short interviews with staff about their attitudes to retirement. This will be placed on L’Oreal’s intranet site and shown during conferences with its beauty consultants. “At a [staff] party, we interviewed some people and got some really funny soundbites,” says Scott. “We have tried to develop a communications package behind that which makes it more accessible, less frightening and really thinned down to hit the majority of employees.”

Health and wellbeing is also high on the company agenda, and L’Oreal UK offers a range of lifestyle perks at little or no cost to the business. In 2010 it launched a bikes-for-work scheme, also installing a new cycle rack and upgrading its shower and locker facilities. Also, a yoga teacher visits the company’s head office once a week to offer staff employer-subsidised classes.

The firm has also taken steps to make better use of its onsite occupational health nurse, who now offers health screens, such as blood pressure, glucose, cholesterol and lifestyle checks. “We already have an occupational health nurse who is on site once a month and would often have only one or two appointments for typical occupational health issues,” says Scott. “Instead of paying him the daily rate, where he would only have one or two meetings, we filled the rest of his day with health screening slots.”

Another wellbeing initiative that generated a lot of attention was a 10-week dance programme, which started in January and was run in conjunction with the English National Ballet. By taking part in Dance to Work, a project with funding from Arts Council England, L’Oreal UK gave its employees the chance to take a series of professional dance lessons, culminating in a live production at Sadler’s Wells Theatre in Islington, London, in May. A video of the final performance was shown on plasma screens around the firm’s head office last month.

Healthy lifestyle

“We want to offer a suite of benefits that are tailored to employees, which we think are fun, cost-effective, relevant and, ideally, encourage a healthy lifestyle,” says Scott.

“It is about appealing and engaging our employee base a lot more than maybe traditional, slightly distant, benefits packages.”

But working at L’Oreal UK goes beyond its benefits package and staff discounts on its products. “It is fast-paced, dynamic and entrepreneurial,” says Scott. “Employees get great experience and responsibility from an early stage in their career. An employee’s career is managed, in a way, and tailored to fit their needs. People get the opportunity to work abroad and not just at a senior level if it is something they want to do.

“If I did a more traditional benefits roll-out with the types of employees I have, it just would not work. We have enthusiastic and motivated people here, and entrepreneurial. They need an unusual slant to benefits.”

L’Oreal UK is proof that not all staff need a rigid, traditional benefits package and has made sure its offering is not only cost-effective, but imaginative and fun.

L’Oreal group at a glance

L’Oreal Group can trace its roots back to 1909, when chemist and entrepreneur Eugene Schueller, who designed and produced hair dyes that were sold to hairdressers in Paris, set up a business that would later become L’Oreal.

From 1957 to 1983, L’Oreal expanded internationally and acquired several other beauty brands. Today, its brands include: Garnier, LancŸme, L’Oreal Paris, Vichy and Maybelline New York. In 2006, the cosmetics giant bought The Body Shop.

The company operates in 130 countries, employing 64,600 staff across hair salons, department stores, perfumeries,pharmacies, dermatologists and Body Shop retail shops.

L’Oreal UK is the group’s fourth largest subsidiary in Europe and fifth in the world. It has 3,000 employees in the UK, 2,000 of whom are beauty consultants working behind the counter at department stores, such as Boots and Selfridges.

Group sales for the first half of 2011 were €10.1 billion, compared with €9.7 billion for the same period in 2010. In its 2010 annual results, the group made gross profits of €13.8 billion, up from €12.3 billion in 2009.

Career history: Matthew Scott

Matthew Scott, HR compensations and benefits director at L’Oreal UK, has worked for the firm for 14 years. He joined its graduate programme as an engineer and was based at its factory in Cardiff. A job at L’Oreal UK appealed to him because it offered the opportunity to speak French, which he learnt while working in Cameroon, Africa, for 18 months after he left university.

Scott spent three years in Cardiff before moving to the cosmetics firm’s head office in London, where he undertook various supply-chain roles, which, after seven years, resulted in a management position. In 2006, Scott then moved into the firm’s HR department.

“I managed a team of 10 and what I really enjoyed was the human management side of it and seeing my team progress, be moved abroad and be promoted,” he says. “I was very involved in graduate recruitment and training, then the opportunity came up for me to be an HR manager for the supply-chain, finance and IT divisions.”

At the beginning of last year, Scott became HR compensations and benefits director. He found the technical skills he gained while working as an engineer, combined with his experience in HR, proved useful for his role in this area.

The benefits at L’Oreal

Trust-based defined contribution scheme. Employees contribute 4%

Health and wellbeing
Group income protection for all staff
Bikes for work
Subsidised yoga classes
Gym discounts
Wellbeing events
Dental benefits
Employee assistance programme.
Private medicaI insurance (PMI) for senior staff
Health screening

25 days standard, rises with service

Family-friendly benefits
Childcare vouchers

Deals at businesses near head office
Staff discount on L’Oreal products

Company cars for field sales staff and cash allowance for some staff
Subsidised canteens at some sites

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