Dixons Carphone looks to harmonise benefits

By Jennifer Paterson 28th August 2014 6:00 am 3rd November 2015 4:58 pm

In a year’s time, Dixons Carphone’s benefits package could look completely different. While the new retailer, formed by a merger between Dixons Retail and Carphone Warehouse in August 2014, is getting used to its combined name, its first hurdle will be harmonising the benefits of nearly 30,000 UK employees.

Both organisations operate in the retail environment, with brands that include Currys, Carphone Warehouse, Dixons Travel and PC World, but the two entities each have their own benefits structures.

Toria McCahill, group reward manager at Dixons Retail at the time of the merger and now head of UK reward at Dentsu Aegis, says: “The biggest issue will be to harmonise a new package. At the moment, it’s looking at the make-up of the two organisations and at how synergies can be made.

“The bonus and the package – what I call the ‘meat and two veg’ benefits – are actually quite similar. [The issue will be] all the different benefits that we have, and deciding what stays and what goes for each organisation. It is about ensuring that, whatever we do, we provide a range for everyone.”

Pre-merger, Dixons Retail already had a diverse workforce, with employees in retail environments, warehouses, contact centres and a head office in Hemel Hempstead. Carphone Warehouse had around 9,000, predominantly young, employees. Its various distribution centres and customer service centres have also been combined with Dixons Retail.

This growing and transforming workforce creates a unique challenge: finding the best benefits fit for everyone. This has always been the case for Dixons Retail, particularly when it comes to communicating with staff.

“Communication is a challenge, because more than 16,000 employees do not have an email address,” says McCahill. “Trying to get out to every store, to all the warehouse staff, to people in the trucks who are delivering stuff, is a challenge.

“Our retail employees can access a computer, but they don’t do it very often. The way we get information to them is via our ’mail bag’, which is an email sent to a store manager, filled with information for that day. It can also be put up on the ‘people board’ at each store.”

The 4,500 warehouse-based staff are a particularly difficult group to communicate with, because they do not have computers in the workplace.

Amy Evans, reward business adviser at Dixons Retail and now Dixons Carphone, says: “They do have an engagement area for breaks with a computer or two in it, but people don’t use it that often.

“We reach out at their home addresses. But they have been quite good at having morning meetings with all of their shift managers, where they talk about things that are coming up.”

Launching a flexible benefits portal

Dixons Retail began to centralise its benefits in June 2014 with the introduction of a flexible benefits portal, provided by software provider Staffcare.

Evans says: “Prior to the launch, we had an intranet site with some information, but it was not always kept up to date. People didn’t know where they could find information.”

McCahill adds: “We’ve taken what we already had and put it somewhere that people could get to it. The idea is that the portal is futureproofed and we can continue to add to it.”

The flexible benefits scheme includes a group personal pension plan, a private medical insurance scheme, a health cash plan, eye tests, childcare vouchers, a payroll-giving scheme and retail discounts.

A range of new benefits were introduced as well, including a bikes-for-work scheme, holiday purchase and a Tastecard, which was given to all staff for a free 30-day trial period. “We went out to employees to find out what they wanted,” says Evans. “Bikes for work was one of the biggest things.”

McCahill adds: “Holiday [purchase] is currently only offered to head office staff, because of shift rotas. But we did some research and some other retailers do offer it to store colleagues, so next year we hope to offer it to everyone.”

Communications for a diverse workforce

To ensure all employees were aware of the new flexible benefits portal, Dixons Retail sent out benefits booklets and user guides to all staff at their home addresses. McCahill adds: “It’s the only way we can reach out to everybody, and I think people do appreciate things coming to their house.”

The organisation also held benefits roadshows at its largest warehouse and its head office. Retail employees could visit a dedicated area in Halfords stores to ask questions about the bikes-for-work scheme.

Communications were also launched across a dedicated Dixons Retail Facebook page, as well as via Yammer. The internal social media portal is also used for the organisation’s recognition scheme, You’re Electric, which was launched in July 2013.

The online system, which allows employees to share peer-to-peer recognition, includes a ‘hall of fame’ where all staff can see recognition given across the business.

Evans says: “Each department head has a budget as well, and they can give out points to employees, who can then turn the points into vouchers via the system.”

Benefits take-up

Prior to the launch of the flex portal, benefits take-up was very low. For instance, take-up of childcare vouchers was only 0.5% and has since risen to 2%. “The aim was to go out and tell employees what we do so we could get the take-up much higher,” says McCahill.

“Bikes for work take-up was aimed at 1% and we’ve got 3%. The portal has proved we’ve done a good job, because people have known about it.”

Employees can access the portal in the workplace and from home. It is also attached to payslips, so employees are constantly accessing the site.

It has not yet been determined which benefits offered by Dixons Retail and which benefits offered by Carphone Warehouse will be translated into the benefits package for the newly-formed Dixons Carphone.

However, prior to the merger, both organisations faced similar challenges around communicating benefits to their diverse workforces, so a selection of the most effective and most popular from each retailer should come through in the final harmonised package.

Toria McCahill will speak in a session on ‘Reviewing international benefits to meet business objectives’ at Employee Benefits Live on 24 September.

Dixons Carphone at a glance

Dixons Carphone was formed by a merger between Dixons Retail and Carphone Warehouse in August 2014. It is an electric and mobile retailer, which includes brands such as Currys, Dixons Travel and PC World.

Prior to the merger, Dixons Retail had 513 stores and more than 20,000 employees across the UK and Ireland. Carphone Warehouse had more than 9,000 staff before the merger. The new entity now has 1,324 stores.

Dixons Retail’s head office in Hemel Hempstead, but the location of the newly merged company’s HQ has not been decided.

The new entity has a market value of £3.47 billion and potential annual revenues of more than £10 billion.

The average age of employees is 33. The workforce is 73% male and 27% female.

Business challenges/objectives impacting benefits

A large project harmonising benefits for 30,000 employees has been created by the merger between Dixons Retail and Carphone Warehouse.
Communicating with a diverse workforce, which is spread out between retail stores, warehouses, distribution centres, contact centres and a head office.
A strict benefits budget after a difficult economic period.

Career history

Toria McCahill had been group reward manager at Dixons Retail since December 2013. In September 2014, she moved to a role at Dentsu Aegis as head of UK reward.

Her previous roles have included: HR manager, projects and reward, at Samsung Cambridge Solution Centre (SCSC); talent and succession manager at electronics firm CSR; and global reward specialist at CSR.

McCahill considers her biggest achievements to be her work around mergers and acquisitions. At CSR she managed one merger and one acquisition. At SCSC she project-managed a Transfer of Undertaking (Protection of Employment) (Tupe) split, and set up a whole HR and reward office. She also worked on the Dixons Retail and Carphone Warehouse merger.

Amy Evans worked on the reward team at Dixons Retail for just under two years, first as reward adviser and then as reward business partner. She holds the latter role at the new entity.

She has also been reward adviser at Best Buy Europe, HR administrator at Keystone Distribution and sales executive at Comag.

Evans is very proud of the flexible benefits portal launch, which is the first major project she has worked on. She adds: “It feels like an achievement now because we’ve finally launched it and it went well.”

The benefits

Pensions

Group personal pension (GPP) plan, offering contributions available via salary sacrifice, has a maximum employer-matched contribution of 10%.
National Employment Savings Trust (Nest), with a 1% employee contribution and a 1% employer contribution, was introduced for auto-enrolment in March 2013.

Healthcare

Private medical insurance scheme for senior staff.
Health assessments for senior staff.
Health cash plan through the flex portal.
Employee assistance programme.
Life assurance available through the GPP.

Bonuses

Annual bonus scheme, which is based on organisation and personal performance. In the retail environment, the personal performance is based on a customer service score.
Bonus waiver, which allows employees to sacrifice their annual bonus, or a percentage of their bonus, and add it into their pension scheme.

Other benefits