Following a raft of mergers and acquisitions ICI has put flex at the heart of its efforts to harmonise staff benefits
Prolific merger and acquisition activity at ICI had over the years resulted in a highly fragmented benefits arrangement for six separate businesses, so by implementing a flexible benefits scheme, our ambition was to harmonise benefits across the group.
Flex was a major departure for ICI as historically the benefits programmes across the businesses had been run in an autonomous way. Given that the scheme was the organisation’s first cross-business project, it was therefore critical to involve key stakeholders both internally and externally. Having first secured support at executive level, the next step was to identify the right resources and team members to assist in delivery – not an easy task in a multi-business environment with little previous history of cross working. To encourage collaboration, a team incorporating a range of different disciplines was brought together. It included representatives from HR, corporate communications, payroll, tax, IT and legal. Additional internal and external resources were also made available, including legal advisers, pension trustees, IT experts, employee and union representatives, plan designers, communications consultants and graphic designers.
A decision was made at the outset to introduce flex in two stages, starting with the introduction of a pension salary sacrifice arrangement from which ICI would generate NI savings. Subject to uptake and consequently savings, a wider flexible benefits offering would follow. In the end, both flex and pension salary sacrifice had an exceptional take up in what were tricky circumstances. ICI announced that it was to divest its Uniqema business at inception of the pension salary sacrifice arrangement, and then, that it was to take the same action with its Quest business in week one of enrolment for flex. Managing the resulting unease of employees across the businesses was crucial, especially since we were asking employees to effectively change their terms and conditions under the salary sacrifice arrangements.
The scope and design of the plan was very much left to the team. We decided that to make a real impact it was necessary to provide an offering worth talking about and so included as many benefits as possible including a voluntary benefits scheme. I felt that a limited offering would detract from our ambition of providing choice and giving employees responsibility for their benefits package.
In terms of plan design our greatest challenge revolved around private medical cover. ICI had two plans in place and moving to a single arrangement was fraught with difficulty as emotions ran high about the medical arrangements. A great deal of negotiation and persuasion resulted in a workable solution that everyone felt happy with. An innovative medical plan provided by PruHealth which rewarded employees for “healthy living” is now our flagship benefits offering. Not only do employees get cash back by gaining vitality points for maintaining and improving fitness levels, but the scheme also facilitates cost control due to its unique structure.
To ensure that the interface between the HR systems and flex would run smoothly, the IT processes for HR and payroll also had to be harmonised across the businesses. This was not an easy feat as ICI had more than 1,000 benefit grades which were being reduced to 200.
Another consideration was effective communication. We needed to reach many different groups ranging from executives to factory workers. Using various media, we provided employees with information about the plan and how to use the benefits portal.
Senior management from all businesses were consulted at each step of the way. Equally, the businesses consulted with the employee representative forums and union representatives. It was essential to have their support to ensure success for the plan, as they are often the first port of call for employees.
And for 2008? With the takeover of ICI by Akzo Nobel, that has created a whole new set of challenges for the year ahead. That, however, is another story.
Lisa Harrison is benefits manager for EMEA & AsiaPac at ICI
Best practice tips
- Choose your consultants carefully. Implementing a flex scheme is intense work and a healthy working relationship is critical.
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- It’s worth considering plan designers who can also administer the scheme so that the same providers can be used for both tasks.
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- Engage all stakeholders as early as possible, that way there are no last minute surprises.