Case study: Cashing in on staff discounts at Sainsbury’s
Lyn O’Dwyer has been a night shift replenisher at Sainsbury’s Purley Way store in Croydon for over two years. She says night shifts give her the chance to attain a healthy worklife balance.
When asked what she likes best about working for Sainsbury’s, O’Dwyer says: “My colleagues. I really enjoy working and getting the store ready for the next day’s trading.”
Her favourite benefit is the 10% staff discount, which rises to 15% at certain times of the year.
“The staff discount is a real help because it means I can save money throughout the year on the things that I need,” she explains. “It is a real boost, particularly at the more expensive times of the year, such as Christmas and Easter.”
O’Dwyer is also a member of the Sainsbury’s Social Association (SSA), which offers discounted outings and leisure activities for a membership fee of just £1 a month. For example, staff can receive 6% off holidays booked through Thomas Cook.
“The SSA is a really great benefit,” she says. “It enabled me to get 6% off my holiday to Spain later this year and there is a huge variety of experiences that you can take advantage of.”
Employee discounts are the most popular benefit among Sainsbury’s burgeoning workforce, says Jennifer Paterson
With a 150,000-strong workforce as diverse as the food products sold in its 890 UK retail stores, Sainsbury’s benefits and reward team faces big challenges, especially when it comes to communicating benefits.
Employees, with an age range of 16 to 92, are located in retail stores, corporate offices and distribution centres, so any message relating to benefits has to take many different forms. The supermarket chain is also creating 20,000 new jobs in the next three years, so reaching its diverse workforce is a growing task.
Helen Paxton, head of reward and people systems, says: “We have such a diverse workforce, with different wants and needs. It is about tailoring our packages so they are meaningful and engaging to the population they are offered to.”
Sasha Brenner, benefits and reward policy manager, adds: “We cannot give all staff exactly the same thing in an organisation this diverse and this big. The board likes our benefits to be inclusive, which provides us with challenges sometimes. Benefits and communications have to be very complex.”
Difficult economic conditions also throw up challenges for the retailer, which says it offers customers fair prices without sacrificing its business values. This makes it even more important for Sainsbury’s to reach out to staff through its benefits. “There are constant challenges, trying to ensure we are providing meaningful packages that incentivise and motivate our employees when they are facing tough times themselves and are looking to us for help,” says Brenner.
She adds it is important to make staff feel they are being listened to and that their views are taken into account. This is achieved by schemes such as Tell Justin, which was launched in 2004 inviting staff to write to Sainsbury’s chief executive Justin King with ideas to save the business money. King responds to all suggestions, which have numbered 30,000 to date.†
“Staff actually want to be involved in the business and have an input,” says Paxton. “The suggestion scheme is very effective because they get a true voice. We get to hear new ideas that come from the people who are actually doing the jobs, and it is win-win all round.”
Last summer, Sainsbury’s held a series of staff focus groups and surveys to find out what staff would like to see included in their benefits packages. Paxton says: “We really wanted to get a good understanding of what staff felt about our current benefits package and what things they valued personally, and also how they wanted to learn about benefits, because we did feel there was some room for improvement in terms of how we communicate benefits and engage staff.”
According to Sainsbury’s research, the most popular benefit was the 10% staff discount on all its in-store and online products. At certain times of year, such as Christmas, Easter and summer, the discount rises to 15%. The saving is the same for every employee throughout the business and does not depend on the number of hours worked. Staff have to work for Sainsbury’s for six months to become eligible for the discount card, which can be used by a second person.
Bikes-for-work scheme popular
Other popular benefits include the bikes-for-work scheme, which is currently used by 700 staff. Introduced in April 2010, the scheme, provided by Cyclescheme, comes under the firm’s green agenda and focus on a healthier workforce. It is offered via salary sacrifice and enrolment is open throughout the year.
As well as bikes, Sainsbury’s is keen to provide other benefits via salary sacrifice. This month, it is launching a holiday buying scheme through salary sacrifice, another idea that arose from last summer’s focus groups. In its first year, the scheme will be piloted with employees at head office.
Another suggestion, which came mainly from head office staff, was to introduce flexible benefits. “There is no flex anywhere in the sector,” says Brenner. “One of the key focuses for the future will be flex. We will get to a point where we offer all our benefits under the flex umbrella, but right now the administration is incredibly difficult.”
A current priority for Sainsbury’s is its extensive family-friendly benefits, which include childcare vouchers, flexible working arrangements and enhanced maternity pay. Last year, it partnered Care UK to cater for the one in seven staff who care for an elderly relative. Sainsbury’s is also a member of Employers for Carers (EFC).
Online information for carers
Care UK and EFC provide online tips and information for carers, while Sainsbury’s offers four days off a year as carer days, and time off for emergency or compassionate leave. Carers are also offered remote working, career breaks and unpaid leave.
Meanwhile, the Sainsbury’s Social Association creates an inclusive culture across the business. Staff and their partners can join for a monthly fee of £1 to take advantage of discounted outings and leisure activities.
For staff motivation, Sainsbury’s Shining Stars incentive programme recognises the achievements of individual employees and teams. Staff rewarded through the scheme receive vouchers to spend at the store.
Long service is also recognised at various milestones, such as five, 10, 15, 25 and 40 years.
As part of its communications with staff, Sainsbury’s holds an annual conference each September, and each store manager can choose one to three employees to attend. Last year, celebrity chef Ainsley Harriott judged the staff cooking competition The Big Cook Off, and X Factor star Olly Murs sang.
To ensure staff understand the full value of their benefits, Sainsbury’s has issued total reward statements for the past three years, including details of how much each employee is saving through the discount scheme.
Overall, one of the key issues is to attract and retain staff. “We do continual benchmarking to check our rates of pay and our benefits package is competitive in the industry,” adds Brenner. “We also work hard to make sure we offer the right incentives towards performance. All the supermarkets are in discussions continually to ensure they are all benchmarked with one another. We continually listen to [employees’] views about pay and benefits because it is important for us to make sure our reward packages are meaningful, as well as competitive.”
Sainsbury’s at a glance
Founded 141 years ago, Sainsbury’s is the UK’s oldest grocery retailer. Its first shop was in Drury Lane, London. Today it has 890 stores across the UK, 150,000 employees, and sells 30,000 different products in-store and 120,000 products online.
In March 2010, Sainsbury’s reported post-tax profits of £585 million, up from £289 million the previous year. Like-for-like sales as at March 2011 were up 4.7% on the year.
Its workforce is 55% female and 45% male, but with a higher percentage of females in stores. It employs staff as young as 16 and as old as 92 (a customer service representative). Over 30% of store managers joined before they were 18.
Average length of service is seven years, including seasonal workers. About 4,500 staff have worked for the firm for 25 years or more, and 60 have 40 years’ service.
Helen Paxton, head of reward and people systems, has been with Sainsbury’s for 20 years. She joined as a trainee manager, then became duty manager, took on operational roles and human resources project roles, and was appointed head of reward and people systems in May 2010.
Paxton has been responsible for transforming Sainsbury’s human resources department, culminating in a new management structure in 2008. “This was an important part of our transition from personnel to HR, improving the efficiency of the function and making sure people accountabilities were sitting in the right place,” she says. “A big part of the success was the communication and engagement through listening groups, and the support materials we provided. As a result, HR managers have absolute clarity about their role accountabilities and have clear development plans.”
Sasha Brenner, benefits and reward policy manager, has been with Sainsbury’s for three years. Prior to joining Sainsbury’s, she was at Woolworth’s, working on the reward team and spending two years in marketing. As a graduate, Brenner worked as a consultant on Mercer’s flexible benefits team.
Brenner co-ordinated and managed a benefits review in 2010/11, as well as an annual retail pay review in September 2009. She says: “The pay review for our 127,000 shop-floor staff had to be implemented in a completely new pay system which had been introduced two months prior to the pay review. There were many learnings from this pay review which were built on for the pay review in 2010. All the processes have now been automated using the formulas and approaches I developed in 2009.”
The benefits at Sainsbury’s
• Stakeholder pension for all employees. Staff can contribute between 4% and 6%, 100% matched by Sainsbury’s.
• Self-invested pension plan (Sipp) available to senior and middle managers.
• Life assurance for all pension members.
• Health cash plan, dental and optical benefits for all staff on a voluntary basis.
• Employer-funded health cash plan for senior employees.
• Senior management and store managers have access to a company car or cash-for-car option.
• Middle management and above can obtain car and motorcycle loans.
• Childcare vouchers.
• Flexible working opportunities.
• Enhanced maternity/paternity benefits.
• Adoption and parental leave, as well as leave for fertility treatments.
• Begins at 22-27 days, depending on location, length of service and pay grade.
• One extra day after five years’ service.
• Package includes bikes-for-work and gym membership.
• Sharesave with 20% discount rate.
Pay and bonuses
• Annual bonuses.
• Incentive programme.
• Long-service awards.
• Subsidised canteens in stores.
• Season ticket loans.
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