As set out in Our Strategy on page 20 of the 2019 Annual Report, at the heart of Headlam’s approach to people management is the provision of a safe and inclusive working environment where everyone can fulfil their potential, and the continued development of a positive workplace culture. 2019 saw further progress in these commitments particularly through enhanced workforce engagement, expansion of people practices, and the development of a clear set of values and behaviours to be embedded across the business.
As summarised in Stakeholder Interaction and Engagement on page 40 of the 2019 Annual Report, the Company has introduced a number of new forms of workforce engagement over the last few years which significantly increase the channels available to the Company to test ideas and actively seek feedback, making changes and improvements to the working environment in response.
During 2019, the Employee Forum was established acting as the formal workforce advisory panel to the Board and facilitating employee feedback being considered directly by the Board. Elected employees from across the workforce met with Company representatives, including the Chief Executive and the Non-Executive Director holding the position of Chair of the Remuneration Committee, on two occasions in 2019 and discussed matters including health and safety, customer engagement, strategy, and values and behaviours.
Three further senior management team events were held in 2019 to engage this group in a wide variety of matters including strategy, and feedback received has resulted in enhancements being made to presentational content and event formats.
Departmental group meetings hosted by the UK Operations Director were newly introduced in early 2020 for members of specific departments such as sales, transport and warehouse to discuss matters specific to their job function, with the opportunity for these groups to share their views and have input into decision-making.
A key focus during 2019 was the development of a clear set of values and behaviours that could be utilised across the business. 135 employees from a wide cross-section of the Company’s businesses attended workshops to collaboratively develop a bottom-up set of values and behaviours which will be communicated and embedded across the Company during 2020.
To continue the development of a positive working environment and culture, a number of policies and working practices were reviewed, launched or relaunched during 2019 including:
The Company’s effectiveness in developing a positive working environment is monitored using a bi-annual employee survey whereby employees are given the opportunity to share their view across a wide range of areas. Additionally, in 2020, a ‘culture capture’ exercise will be undertaken. The Company will work with a third-party to carry out a research study using focus groups, interviews and a survey which will provide a bespoke report that provides both insight into the Company’s culture and detailed recommendations over key interventions required to prompt cultural shift.
Following its introduction in November 2017, the Employee Assistance Programme (‘EAP’) ran for its second full year in 2019. The EAP, delivered via an independent company called LifeWorks, is a confidential telephone, internet, app-based service available to all employees and their immediate families providing advice, information and support on issues spanning work, health, and family issues. During 2019, 26 people benefited from individual support provided.
An enhanced Occupational Health service was introduced in 2018 to further support employee wellbeing, and in 2019 the service assisted the HR team in supporting 38 employees with complex medical conditions via early intervention and their appropriate return to work.
The Company actively recruited in all departments throughout 2019 and the total number of employees was 2,575 as at 31 December 2019 (2018: 2,612). Through the continued focus on supporting and encouraging internal moves, 23 vacancies were filled by internal candidates during the year. The Company’s activities in relation to workforce engagement and the development of a positive workforce culture are critical to attracting and retaining talent and experience. As at 31 December 2019, 30% of employees had been with the Company over 10 years, and employee retention which is included as one of the Company’s KPIs decreased slightly in the year to 72% (2018: 76%).
The Company actively encourages all its employees to participate in the training opportunities available to them to support their development and the fulfilment of their potential. In addition to the training programmes detailed in Health and Safety on page 52 of the 2019 Annual Report, during 2019:
Apprenticeships schemes to develop skills and aid succession were launched and rolled-out across the business in 2019 with 29 employees involved, and further investment will be made in 2020 to expand the schemes.
The cost of living award is designed to benefit employees through helping offset the effect of inflation and the rising cost of living. For 2019, the Company elected to award a cost of living increase of 2% to base salary for all UK employees, and the Company has replicated this for 2020. An additional 0.5% has been incorporated into the 2020 budget to enable senior managers to make additional individual awards. For the Company’s employees in Continental Europe, local market practice was followed in 2019 and for 2020.
The Company encourages and supports the financial security of all its employees and offers a number of benefits including the opportunity to participate in the Company’s Pension Plan and providing death in service benefits through the Headlam Group Life Assurance scheme.
The Company reviewed its pension arrangements in 2019, and in particular the future build-up of final salary benefits in its Defined Benefit Pension Scheme (‘DB Scheme’). The Company closed the DB Scheme to new entrants many years ago. Since then, new employees have been eligible to join the Defined Contribution Pension Plan. The Company wishes to provide sustainable and competitive pension benefits for all its employees, and during 2019 consultation began on the closure of the DB Scheme to future accrual, with its closure from March 2020 reducing an area of risk and volatility for the Company and providing fairer pension provision across the workforce. Various adjustments were made in response to feedback from affected members following the consultation, including adjustments to ongoing benefits and the date of closure of the scheme. Affected members have been offered the opportunity to continue saving for their retirement via the Company’s Defined Contribution Pension Plan.
The Company operates a HM Revenue & Customs approved Save-As-You-Earn share option scheme (‘SAYE’), a monthly savings scheme facilitating the purchase of shares in Headlam at a discount by eligible employees. The SAYE not only provides employees with a tax-efficient savings plan but additionally promotes a sense of ownership of the Company. During 2019, 610 eligible employees participated in the Company’s SAYE schemes, equivalent to 29% of the eligible UK workforce.
At the heart of the Company’s approach to people is the provision of an environment where everyone can fulfil their potential and where colleagues from all backgrounds can feel confident in their ability to achieve their best.
The Company has a Diversity Policy in place and is fully committed to the elimination of unlawful and unfair discrimination. The Company recognises and values highly the benefits of diversity in the workplace, of which gender is one important aspect, and maintains a policy of employing the best candidates available in every position, regardless of gender, ethnic group or background, and is committed to fair and equal treatment. Where existing employees become disabled, it is the Company’s policy, wherever practicable, to provide continuing employment under normal terms and conditions and to provide training, career development and promotion wherever appropriate, and the Company gives full and fair consideration to applications for employment from disabled persons.
As at 31 December 2019, the Company had 2,575 employees of which 21% were female (2018: 20% female).
As of the date of the report, the Board (including the Non-Executive Directors) and Executive Team, who attend all Board Meetings, comprised five females and six males, equivalent to a 45% female representation.
The Company is continuing to work to improve the male:female ratio across the whole Company which stood at 4:1 as at 31 December 2019. Actions and initiatives launched to deliver improvement include:
Table showing gender diversity:
|Employees||Executive Directors||Executive Team||Managers||Other||Total|
|Number of employees as at 31 December 2019||2||5||321||2,247||2,575|
In-line with the UK Government’s regulations which introduced gender pay gap reporting, the Company has published its most recent report dated 5 April 2019 on the gov.uk website and its own website. The report fully complies with the legislation and an abridged summary is given below which includes the Company’s two legal entities required to report (‘HFD’ and ‘MCD’) and additionally the ultimate holding company (‘PLC’) not required to report.
The Company is continuing to work to improve both the male:femail ratio and gender pay gap across the Company, which includes both supporting the women who currently work for the Company moving into more senior positions, and attracting more women to join the Company.
* Only one individual received a bonus, an operations leader for Continental Europe
The Company is ensuring that it is fully compliant with the legal requirement to carry out checks with existing and prospective employees to ensure that they have the legal right to work in the UK. The Company has 134 identified EU and EEA nationals working in the UK, and throughout 2019 implemented a communication plan providing ongoing support and guidance for employees gaining pre-settled or settled status to secure their status in the UK after Brexit.