Since 2013, professional services firm Arup has been working to align its employee benefits strategy to better reflect the philosophy behind its founder Ove Arup’s key speech in 1970 which set out the organisation’s business values.
Drawing on the key principles from Arup’s speech of being an employer of choice, being a humane organisation and achieving reasonable prosperity, the organisation conducted a benefits review in 2013, focusing on a strategy that reflects these values.
It has created more flexibility and empowerment for staff in order to be an employer of choice; it has improved its work-life balance and wellbeing strategy to be a humane organisation; and has improved the financial awareness of staff and the tax efficiencies available to them to boost the value of its benefits package and achieve reasonable prosperity.
Diane Thornhill, HR director UK, Middle East and Africa (UKMEA), at Arup, says: “The review came about because the offering had been unchanged for four to five years. Benefits needed to change because of the changing [employee] demographic; they no longer reflected the needs of our people.
“We take on 200 to 300 graduates a year, and the package was not responsive. This was the catalyst. Yet we wanted to resonate with Ove’s key speech in 1970 through our benefits philosophy and the review was about protecting and following that.”
Evan Davidge, head of reward at Arup, adds: “The external environment was changing too, with new legislation coming in. It all impacted on the benefits. I think sustainability was also becoming an issue through group risk benefits. The package was out of alignment with costs, let alone the changing demographic.”
New benefits boost take-up
To reflect its founder’s principles, Arup’s benefits needed major surgery. This led to the introduction of new perks in 2014 via its flexible benefits scheme, including a green car scheme, a computer salary sacrifice scheme and discounted mobile phone products.
“People only used flex to buy and sell holiday, and employees had very little engagement with the other benefits offered,” says Davidge. “It was part of a revamp to bring in more benefits that attract all segments of the workforce. We redistributed some of the savings, £1.2m from tax and national insurance, to focus more on the younger employee and increase engagement. The response has been astonishing.”
Since Arup’s benefits review, take-up has risen from 48% to 75%, communication has improved and the new perks are more suited to younger workers.
“It has partially been down to the benefits review and a combination of a new focus on communications that has resulted in high take-up,” says Davidge. “Something like this does not happen overnight and it has taken three years to align flex with the business approach [to be an employer of choice] and to offer greater flexibility and choice.”
Arup’s top-down/bottom-up approach to benefits communication, with its business leaders on hand to tackle important messages to staff, has helped the multi-channel approach it decided to take after its benefits review.
Davidge adds: “It is really important for us to get leaders to reinforce different aspects of the benefits package through the year, where the opportunity presents itself, such as the flexible benefits window, announcement of the profit share bonus and pay reviews.”
Focus on employee wellbeing
The organisation’s continued focus for 2015 will be on making Arup ‘1,000 years younger’ through its health and wellbeing strategy, which aims to empower its employees, or ‘Arupians’, to take their health into their own hands. This was also a flagship change during the benefits review.
“We spent an awful lot of money on health benefits, but it was disjointed,” says Davidge.
The organisation has made considerable progress by working with its provider, Axa PPP Healthcare. More than 52% of its employees have received one or more health checks in the past 12 months and 62% have registered on the provider’s Employee Health Gateway, which provides tools and resources to help them improve their personal wellbeing.
Thornhill adds: “We took the strategic imperative to shift away from managing the cure and the symptoms, to investing in people to be more proactive, better educated and get to the problem to try and prevent something happening.”
Arup measures its progress through a health dashboard, which offers a more targeted approach to identifying and reducing key health risks. Although the organisation initially saw an increase in claims, largely because of the number of staff going through a health check, claims have now begun to plateau.
Benefits review outcomes
The results of the benefits review produced a clear direction for Arup: it now has a diversified and joined-up benefits package that reconciles both business and employee needs. It has responded to changing market practices, legislation and demographics in a sustainable way, and has taken advantage of its purchasing power to create a better flexible benefits offering.
Its 2013 Working at Arup employee survey found that 85% of respondents are proud to work at Arup and 80% would recommend it as a place to work.
“This pride comes from the firm’s unique values,” says Thornhill. “It comes from the opportunities to work with talented people and the brand that Arup is. People aspire to work with leading experts and even the legacy of Ove himself is an attraction to people for the work he did on Sydney Opera House.”
As a result of its efforts, Arup has been nominated for ‘Best alignment of benefit to business strategy’, ‘Best flexible benefits plan – small employer’ and ‘Benefits team of the year’ at the Employee Benefits Awards 2015.
Arup at a glance
Arup was founded in 1946 with an initial focus on structural engineering. The organisation first came to world attention with its work on the structural design of the Sydney Opera House. The firm comprises designers, planners, engineers, consultants and technical specialists and has grown into a multi-disciplined organisation responsible for the design of many iconic structures.
It has about 10,500 employees and 2,250 special-term contractors, agency staff and retained consultants located in 37 countries. It has a 3:1 male/female split and two-thirds of its employees are aged 30 to 45. Average length of service is just over seven years.
Business objectives affecting benefits
- Cost implementation of benefits review throughout 2016.
- Managing new generations of workforce as well as older staff.
- Continuing to align benefits to core values.
The benefits offered by Arup
Trust-based defined contribution scheme with 96% take-up. Employees contribute 2% to 6% of salary, and Arup double matches employee contributions up to a maximum of 12%.
Healthcare and wellbeing
Private medical insurance: core and upgrade available through flex.
Free flu vaccinations.
Discounted gym membership.
Life assurance at four-times salary.
Critical illness insurance.
Personal accident insurance.
25 days, including bank holidays, as standard for all employees.
Staff can carry over up to 30 days of accrued untaken holiday, which will decrease to 20 in 2016.
Staff can draw up to 10 days a year from the following year’s holiday allowance.
A maximum of five days can be bought or sold through flex.
When an employee leaves the organisation, there is a reconciliation of their holiday entitlement, with the final balance being credited or deducted to/from their final salary.
Flexible working/sabbaticals policy.
Three months enhanced maternity and shared parental leave.
Voluntary benefits discounts scheme.
Bikes for work.
PC scheme (Microsoft Enterprise home use licence and a range of Apple products).
Evan Davidge has been head of reward at Arup since May 2011, after previous roles at Carphone Warehouse (now Dixons Carphone), Nationwide Building Society and the Royal Air Force. He is a strategic member of Arup’s Regional People Executive Committee, responsible for reward, programmes and data management specifically to develop and deliver reward strategy for the business. He has also spent a number of years in employee benefits consulting.
Diane Thornhill, regional HR director UKMEA, joined Arup as a business partner in 2002. She was previously HR controller at Sears Financial Services and head of HR at the British Shoe Corporation. Thornill says: “My various roles have teached me a lot of skills to relate to different people needs which has helped develop a strength of character.”