Three connects with young workforce

Case study: Pensions calculator pays off at Three

Jacqs Harper, Three’s head of retention performance, works in the upgrades and cancellation business, encouraging customers to stay with Three.

Harper has been with the company for seven years, starting in the call centre before progressing to a head office role. She says she particularly enjoys the pensions calculator tool included in Three’s benefits communication. This enables an employee to play around with figures, enter the contributions they want to make and how long they want to work for, and calculates their expected retirement income.

“I like looking at stocks and shares,” says Harper. “I did not really understand pensions until I looked at that tool.”

She also appreciates how Three’s reward system supports its desired behaviours, in particular the Three Cheers recognition scheme. “I like the Three Cheers cards you can email or send to a mobile when someone has done a good job,” she says.

During her time at Three, Harper has received quite a few thank-you cards. “Last Christmas I checked how many points I had and was able to buy myself a television,” she says.

With an increasingly young workforce, telecoms provider Three is keen to create a feeling of togetherness, says Tynan Barton

As the UK’s newest provider of mobile phone and data services, Three faces the twin challenges of continuing to grow and maintain its 3G network while providing the right rewards for a young workforce.

Three, formerly know as Hutchison 3G, started operating in 2003. In the past four years, the company has reshaped its business to create a bigger retail presence, increasing its number of stores from 30 to 308. Seth Russell, Three’s director of reward, says: “We are very young, particularly in retail, which is even younger. That has a big influence on the types of benefits we offer, and particularly the communication strategies we employ. The way Generation X, more Generation Y in our case, interact with us is different from the more traditional head office-type people. We have to be creative in the way we engage.”

With 3,500 staff working across its retail stores, its head office in Maidenhead and back office services in Glasgow, Three has to ensure its benefits strategy meets the needs of a diverse population, from younger retail staff to highly skilled technical workers and traditional head-office functions such as legal and accounting. Three decided to introduce flexible benefits for all staff in 2008. Russell says: “Flex is a very simple, very quick way of giving choice to our employees and access to a variety of benefits that they can select.”

He says the company is trying to break down the barriers of differentiation between its employee populations. “Historically, we had different packages for our retail, contact centre and head-office people. What I am trying to do is break down those barriers and give everyone access to the same things. Flex is a wonderful way of doing that.”

When it decided to introduce flexible benfits, administered by Bluefin, Three also launched total reward statements, which are integrated with its flexible benefits platform. It realised that although it offered a good range of benefits, employees’ understanding and appreciation of them were fairly low.

Total reward statements

Total reward statements are now Three’s main channel for benefits communication. “The statements are a wonderful way of communicating to people exactly what the benefits package is,” says Russell. “It is an easy-to-access system and has all our benefits and reward information in one portal.”

Feedback from focus groups and the firm’s annual employee survey showed that understanding of benefits has now improved, which has also boosted engagement.

Communicating with staff is important at Three, not just in terms of making them aware of what is available, but in obtaining feedback and involving staff in designing the benefits package, for example its voluntary benefits scheme. Russell explains: “When we designed the scheme and set it up, we spent a lot of time talking to employees and focus groups to test the design ideas and to ask them what they were looking for.”

The discussions found that staff regarded high-street discounts as the number one benefit. In response, Three partnered Asperity Employee Benefits to introduce a voluntary benefits scheme at the same time as flex.

Alongside total reward statements, Three uses a range of communications for its benefits and pension scheme, including posters in its stores, briefings and focus groups, which it finds very effective. “I am surprised at how powerful they are,” says Russell. “We have a very vocal population who are keen to share their opinions, which is fantastic. We found those focus groups become champions for change once they are launched, because they are involved in the design process.”

Video messages

Added to these more traditional methods of communication, Three also draws on its core business activity, sending short video messages to employees’ phones. It has also found text messaging an easy and inexpensive way to reach staff. Every employee is given a handset with a phone and mobile broadband contract which is a very popular benefit.

Although Three’s annual employee survey showed a high engagement score resulting from its workers’ appreciation of their benefits, the organisation realises there is always room for improvement. “With a young workforce, the average length of service is three years, so keeping those messages fresh is really important,” says Russell.

One of the key drivers for Three’s reward team is to have a benefits strategy that supports the organisation’s values. “We need to be competitive because the mobile telecommunications market is very competitive,” says Russell. “But it also has to be relevant to the type of employee we have. Our population is young, more male than female, with a relatively low length of service, so we have to really target what we deliver.”

Three recognises that having a reward and benefits package that is flexible and offers choice is vital for attracting and retaining key talent. It has also been working to bring together its brand, culture and employer value proposition to aid recruitment, retention and engagement of employees. “We have invested a lot over the past three years in cultural change and reinforcing the very strong vibrant culture of Three,” says Russell.

The cultural change programme focused on three behaviours: taking responsibility, being open and honest, and keeping your word. The initiative was driven by chief executive Kevin Russell, who is passionate about making behaviours central to the way the business operates. “Only if we imbed those behaviours in the way we work and operate can we succeed as a business and achieve the growth we want to,” says Seth Russell.

These behaviours are entwined with the firm’s reward programme, in particular its Three Cheers recognition scheme, which enables all staff to send thank-you cards, by email or phone, to colleagues, for example in recognition of a job well done.

The scheme is multi-tiered. On the lowest tier, the senior management team choose the best-deserved card at the end of each month and award the recipient £50 worth of high-street retail vouchers. On the next tier, individuals or teams receive £100 to £300 worth of vouchers for putting in significant extra effort. On the top tier is Three’s annual ‘Oscars’, in which the recipients of the best-deserved cards are awarded a top-of-the-range handset, a crystal star trophy and lunch with the chief executive.

The most significant change Three has made to its benefits in the past year was to switch pension provider to Aviva in April. The aim was to reduce the annual management charge for staff in its group personal pension. “The change has given us the opportunity to go out with new pension messaging across the population,” says Russell.

Like many employers, Three struggles to achieve high pension take-up among younger staff, so it saw the change of provider as an opportunity to remind staff what is available to them. It also works with Bluefin to administer its pension, and has utilised Bluefin’s and its own technological capabilities to communicate with staff. “The platforms we have developed are user-friendly,” says Russell. “Staff can access pension statements through their handsets, as well as through the flex site. This is important for our retail colleagues because they do not have computers at work, but do have phones.”

Big challenge

Three is about to begin a review of its reward and benefits strategy that is partly driven by the 2012 pension reforms. About half of Three’s retail staff do not join its pension, so auto-enrolment will be a big challenge. “I am looking at auto-enrolment as an opportunity to remove some of the differentiation in our employee populations and move to more of a single-status approach,” says Russell.

Although Three’s staging date for auto-enrolment is July 2013, it is making plans now because Russell envisages a difficult time in communicating with staff. “Explaining to people in their teens about pensions is always a challenge,” he says.

As Three continues to grow, it faces the challenge of attracting and engaging the right staff. Russell says: “In the same way that Three is looking to improve its service to customers, employees are my internal customers and I have to continue to improve the levels of service to them.”

Career history: Seth Russell

Seth Russell has been director of reward at Three since 2008.

He began as an HR generalist in the civil service and the NHS before moving into his first reward role with British Gas in 1989.

This led to a move to its exploration and production division, which saw his role develop internationally. He has since held reward and benefit roles at Citibank, Visa International, BBC Worldwide and BP.

Russell’s job at Three also includes responsibility for HR policy, employee relations and HR shared services. He says the company believes developing a flexible and creative reward and benefits solution helps it stand out as an employer of choice.

Since joining the mobile phone operator, Russell has simplified its pay and bonus structures and focused on improving communications. He has also introduced a broad-banded job family pay structure, as well as a flexible benefits scheme and total reward statements.

He says benefits is a reinforcer of the employer value proposition. “Three has a very strong idea of what it wants to deliver to employees and potential employees, and benefits is a really important part of that. They have to reinforce the values of Three as an organisation and that really comes through in terms of choice and flexibility.

Three at a glance

Three, formerly known as Hutchison 3G, began operating in the mobile telephone industry on 3 March 2003.

Its parent company, Hutchison Whampoa, operates global businesses in telecommunications, ports and related services, property and hotels, retail and manufacturing, and energy and infrastructure.

The telecoms group has a strong presence in Asia, and has operations in Australia, the UK, Ireland, Italy, Sweden, Denmark and Austria.

Three has 3,500 staff in the UK and is headquartered in Maidenhead. It also has an office in Glasgow and 308 stores around the UK, and employs about 6,000 workers in contact centres in India.

Because Three is a fairly young business, its average length of service is three years. The average age of employees is 30, and it has a 60:40 male-to-female ratio.

Currently, Three’s biggest challenge is growth. In its 2010 annual report, the group, comprising its European and
Australian operations, reported a 10% growth in total revenue resulting from growth of its customer base. It plans to double its number of customers over the next three to four years. It also aims to invest further in its 3G network in the UK to support its smartphones and data usage.

The benefits at Three

• Non-contributory group personal pension for retail employees, with 3% employer contribution.
• Group personal pension scheme for head-office staff, with 2% employee contribution and 8% from Three.

• Private medical insurance for management-level staff and above.
• Available to all staff through flexible benefits scheme.
• Income protection for senior grades.
• Dental care available through flex.
• Eyecare is provided through an onsite facility, led by Three’s health and safety team.
• Personal accident insurance available through flexible benefits.
• Employee assistance programme.

• Company car allowance for perk drivers.

• Enhanced maternity/paternity pay.
• Sabbatical leave policy.
• Flexible working arrangements.

• 25 days a year as standard.
• Staff can buy up to two weeks and sell up to one week, compliant with statutory minimum, through flex.

• Sales team has a commission targetrelated bonus.
• Other staff have a bonus plan driven by organisational performance.

Other benefits
• Mobile telephone with contract and mobile broadband.
• Voluntary benefits scheme.
• Three Cheers recognition scheme.
• Discounted membership at local gym.

Read more employer case studies