Ladbrokes’ business goes far beyond the betting shop and out into cyberspace, and its reward delivery is running a similar course.
Since 1886, Ladbrokes’ doors have been open to anyone who wants to gamble. Today, it has more than 2,000 betting shops across the UK, and employs 15,500 staff. Besides its retail presence, the organisation also offers betting markets through the internet, mobile phones and telephones.
As technology progresses, Ladbrokes is focused on building its digital capabilities to become a fully e-enabled international betting and gaming business. It is developing improved technology and adding new digital products.
As an employer, Ladbrokes is focused on linking this business strategy to its reward and benefits. Sara Davies, HR director, reward and resourcing, says: “We are in quite competitive marketplaces, so we have a retail environment as well as an e-environment, which is around specialist IT knowledge, new technologies and lots of channels, such as mobile and internet. Our reward strategy has to support the attraction of those people into the business.”
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As the business moves more online, Ladbrokes is following a similar path in its communication with employees. While it still uses printed media, such as articles in its internal magazine Score, total reward statements and an annual reward booklet, it also communicates via its intranet site and digital screens around its head office.
In the retail environment, the company uses a messaging system on shop tills. It plans to launch an online benefits portal early next year, which will be the most significant advance in the technology it uses to communicate with retail employees.
Reviewing benefits processes
Ladbrokes is also reviewing the processes around a number of its benefits, for example around their structure and design. Davies says: “There are a lot of good things in the organisation from a reward perspective, but we wanted to really make sure we were getting the most value out of those, and really making sure they were doing what we want them to do. Reward tends to have a lot of legacy, and you need to go back and test that.”
One change the organisation has made this year, after a review, has been to restructure its life assurance benefit. This was traditionally delivered through the firm’s defined benefit (DB) pension scheme, but because the DB scheme closed to new entrants in 2007 and has only 700 active members, Ladbrokes has removed life assurance from it.
Phil Rixon, pensions and benefi ts manager at Ladbrokes, says: “We reviewed it and decided there were better ways to deliver [life assurance]. Keeping it separate from the final salary scheme allows the trustees to concentrate on being trustees of the pension benefit and it allows us to be a bit more nimble in some of the things we want to deliver.”
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Ladbrokes is also in the process of reviewing other benefits, using an employee survey to find out what staff want. Davies adds: “We want to use some of these tools to get more information from employees and ask them to help us with the design of their benefi ts. Every time we change something or really look at anything from a reward perspective, we want to make sure we listen to our employees.”
As Ladbrokes’ March 2013 auto-enrolment staging date approaches, the firm is also reviewing its pension provision. Along with its DB scheme, it runs a stakeholder scheme. For most employee grades, the company matches contributions up to 5%. For more senior employees, it matches contributions up to between 10% and 15%, depending on grade.
“The philosophy is a step back from just the auto-enrolment piece, important as that is,” says Rixon. “If we just consider auto-enrolment, we will fail to deliver a properly coherent strategy, taking on board the final salary scheme and the other non-pension benefits we have got.”
Pension take-up
Ladbrokes began the review process by examining its pension provision in Ireland and making some changes that have allowed it to gain an insight into the scheme’s take-up levels. “The take-up here is pretty low, and we found the same sort of thing in Ireland,” says Rixon. “We are very interested in understanding what our current pensions take-up is, what it might look like in the future, and how that compares with the various surveys and studies done by government bodies and consultancies over the past months.”
As a result of this feedback, Ladbrokes changed its Irish pension scheme to offer employees more flexible contribution levels. Its 1,000 staff in Ireland previously had to contribute at least 5% into their pension scheme, but the plan is now aligned with its UK scheme, so employees can choose their contribution rate, with up to 5% matched by Ladbrokes.
“A point was made by staff over there that having to pay 5% of salary was a barrier to joining the pension scheme,” says Rixon. “So we decided to allow employees to pay less than that and be comfortable, as a starter toget into pensions.”
One of the biggest challenges around autoenrolment will be the practicalities of managing the process for staff in 2,000 retail shops along with its head office functions, says Davies. “The challenges are around understanding auto-enrolment from an organisational perspective, and what the impact of that will be,” she says. “We have been working quite hard at determining how to deliver a really good set of communications and making sure we facilitate the process in the right way.”
Rixon adds: “We have done some fairly light-touch communications, but we have a flightpath taking us into March 2013 and then out of it. We are going to gradually warm-up, educate and inform our staff about what is coming.”
Webcasts and podcasts
Ladbrokes’ auto-enrolment communications will also tap into technology, including the use of webcasts and podcasts, but it will also continue to use paper-based communications. Rixon says: “We can’t risk alienating a great swathe of our population by simply focusing on our web-based solutions, although that will play a large role for us.”
The organisation will launch its online benefits portal when auto-enrolment communications are revving up, but the technology will carry through into Ladbrokes’ future strategy around benefits. Davies says: “The key piece for us, with auto-enrolment being the most important thing, is that we will build that first and then leverage those opportunities. It gives us a real opportunity in the retail shops to be able to have greater control over communications, and offer employees more things.”
As technology changes the gaming industry and the business evolves, Ladbrokes is taking the opportunity to review its reward offering, make changes based on employee feedback, and use its move into the digital space to rejuvenate its delivery of benefits.
Davies says: “We are doing a lot of investment to reinvigorate the business with lots of technology and product enhancements. That has been one challenge around making sure we are getting the right people into the business, and reward is a really important part of that process. As part of this end-to-end piece, whether it is the strategic end or how we deliver it, we are working really hard to make sure we are constantly improving it.”
CAREER HISTORIES
Sara Davies is HR director, reward and resourcing at Ladbrokes. She joined the company in 2007 as reward director and took on the resourcing role in 2011.
Her current role includes responsibility for executive and staff remuneration, short- and long-term incentive plans, recognition schemes, pensions, employee experience, and the company’s attraction and recruitment strategy.
Davies has gained valuable experience by taking on the resourcing side of her role. “It shows that it is not just the analytical side, that reward professionals can couple other parts of specialist HR,” she says. “It has been really beneficial in my development as well.”
Before joining Ladbrokes, Davies’ previous roles included head of strategic reward at Travis Perkins, reward adviser at Wickes and international HR manager at Staples Office Superstores.
“About 60-70% of the Staples role still included benefits and pensions, but I also did generalist HR work,” she says.
Davies was named one of Employee Benefits’ Hot 100 Benefits Managers in February 2012, and served as a judge for the Employee Benefits Awards in 2010 and 2011.
Phil Rixon has been pensions and benefits manager at Ladbrokes since September 2011. Previously, he spent 10 years at Xafinity Consulting as a principal consultant, pensions and benefits.
“My responsibilities included defined benefit (DB) and defined contribution (DC) pension schemes, predominantly in the UK, but a bit of overseas as well,” he says. “I also worked with risk benefits, was responsible for the development of colleagues, development of proposition and business development generally.”
Rixon’s transition from a consulting role to an in-house position was interesting, he says. “It makes it a bit more real,” he explains. “We can all get caught up in big numbers, millions of pounds and volatility of funding levels, but actually, when you are dealing with someone who has a pension of £1,200 a year and that is what they have got to live on for the rest of their life, that is what makes the job real and why we should take it very seriously.”
KEY BUSINESS CHALLENGES AFFECTING BENEFITS
- Strong delivery in the retail business
- Growth of e-commerce
- Maximising on investment and hard work
- Supporting all of this with the values and culture programme
LADBROKES AT A GLANCE
Ladbrokes was founded in 1886 as a commissions agent for horses trained at Ladbroke Hall in Worcestershire. Its current name was adopted in 1902 when it moved to London. It floated on the London Stock Exchange in 1966.
Today, the betting company has 15,500 staff in the UK, with more than 14,000 of these in its 2,000 retail shops and the rest at its head office in Rayners Lane, London.
In the company’s retail divisions, 62% of staff are female and 38% are male, while these figures are reversed in head office.
Ladbrokes’ annual group net revenue for 2011 was £980.3 million. In the coming year, its stated business challenges include driving the company forward and maximising on substantial investment and hard work.
Sara Davies, HR director, reward and resourcing, says: “Our focus is on continuing strong delivery in our retail business, driving our e-commerce business forward, and grasping the right opportunities to grow and develop the business, supported by our values and culture programme.”
CASE STUDY
Jane Hutchinson, regional manager
Jane Hutchinson has worked at Ladbrokes since May 1984. Her current role is regional manager in Bognor, covering the south-east. Among the benefits she takes advantage of are childcare vouchers, voluntary benefi ts and Ladbrokes’ sharesave scheme.
“It is difficult to pick my favourite benefi t because I use some of them regularly, such as the childcare vouchers, which reduce the cost of looking after my children while I am at work, and the sharesave scheme,” she says.
I have been in the sharesave scheme for so long, I don’t even notice the money has gone and I enjoy the cash lump sum every few years. Earlier this year, I used it to finance buying a horse.”
Hutchinson also takes part in Ladies’ Day at the Jersey Derby, which is sponsored by Ladbrokes. “We give all staff lunch at the course and have a good day’s racing,” she says. “There are some advantages to not having Sunday trading in Jersey.”
THE BENEFITS
Pensions
> Stakeholder scheme. Up to 5% of staff contribution is matched by the employer.
> Defined benefit (DB) scheme, closed to new entrants.
Healthcare
> Private medical insurance available to certain grades.
> Employee assistance programme.
Group risk
> Life assurance for all employees of between two- and four-times salary.
> Personal accident insurance available to all employees.
> Income protection for certain grades.
Company cars
> Linked to job-need requirements.
Holidays
> Minimum of 20 days, plus bank holidays.
> Additional days for long service.
Voluntary benefits
> Includes health cash plan, bikes for work, childcare vouchers and staff discounts.
Bonus
> One annual bonus linked to a corporate target and one linked to individual targets.
Share schemes
> Sharesave plan.
> Share incentive plan.
> Performance share plan for senior staff.
> Ladbrokes Growth Plan, launched in 2010, is a five-year scheme linked to performance conditions.
Motivation and incentives
> Recognition programme. Staff collect points through peer-to-peer and line manager nominations.
> Long-service awards.