Engineering group Ramboll decided to review its employee benefits package after acquiring rival organisation Gifford in 2011.
Gareth Williams, human resources director at Ramboll, says: “We had two aims: to look at affordable ways of aligning two sets of total remuneration and benefit practices across the new business, and to test our offering and ensure we were competitive in attracting, retaining and engaging our staff.”
Williams says high staff turnover is a current issue at Ramboll. At 16%, it is 3% to 4% higher than the average for the market sector.
Ramboll appointed Lorica Employee Benefits to undertake the review in the third quarter of 2012. It began by assessing the two employers’ pension schemes, a group personal pension (GPP) provided by Standard Life at Ramboll and a GPP run by Friends Life at Gifford.
As a result of the review, Ramboll will switch to one pension provider, Aegon, with effect from 1 May. All current members of the legacy GPPs at Ramboll and Gifford have until 1 June to move to the new Aegon GPP, the same date when Ramboll will stop paying employer contributions to the old schemes.
AMC out of kilter
Williams says: “We felt [Ramboll’s] annual management charge (AMC) was out of kilter with the market and so, by combining the two businesses into one, we could perhaps command a better AMC.”
Before the acquisition, Ramboll had 450 employees, of which 300 were members of the Standard Life GPP, which charged an AMC of 1%. This compares with 0.43% for Aegon’s scheme. Gifford’s GPP charged an AMC of 0.56%.
The Standard Life scheme was non-contributory, with Ramboll contributing between 5% and 10% for all staff except directors, for whom it contributed 10%.
Under the terms of the Aegon scheme, staff can contribute a maximum of 5% of gross pay, which Ramboll will match at 5%.
The next stage of the project involved a review of the existing benefits offered by Ramboll and Gifford, which has resulted in an enhancement of some core benefits. For example, Ramboll will offer employer-funded private medical insurance (PMI) to all staff, including the 500 acquired with Gifford, from 1 May. Staff will be able to flex up to include cover for their spouse and/or families through Ramboll’s new flexible benefits platform, Ramboll Choices, provided by Lorica.
First time for flex
This is the first time Ramboll has offered flex to its employees. Williams says: “It would have cost about £1.5 million to take each [benefit] component and upgrade it to the highest, which we couldn’t afford.”
Ramboll has also introduced voluntary benefi ts for the fi rst time, following employee survey feedback. These include dental cover from Denplan, critical illness insurance from Friends Life, group income protection from Unum, life assurance from Legal and General, health screening by Bupa and gym membership from Incorpore.
The organisation also plans to phase out its car fl eet from 1 April and will introduce a cash allowance for all employees, which is already offered to certain staff. The value of the allowance varies, with middle managers at Gifford currently receiving £2,250 and those at Ramboll receiving £5,000.
Williams says: “We expect it to probably be cost neutral.”
Ramboll plans to increase its company-wide employee car allowance, which will result in middle managers’ allowance rising from £2,250 to £3,300