At the heart of the Company’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. Despite a difficult backdrop due to the impact of COVID-19, 2020 saw further progress in these commitments through enhanced workforce engagement and the expansion of people practices as summarised below.
As detailed in Stakeholder Engagement and Section 172 Statement, the Company has continued to develop its approach to workforce engagement and 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 2021, an engagement portal ‘MyHub’ is being launched which is dedicated to providing enhanced internal communications, support, and recognition for employees, and, importantly, features a specific ‘wellbeing’ section. During 2020, the Employee Forum met virtually on three occasions, with elected employees from across the workforce and Company representatives, including the Chief Executive and Non-Executive Director holding the position of Chair of the Remuneration Committee, discussing matters including health and safety, the impact of COVID-19, and the Transport Integration and Network Consolidation projects as detailed in the Chief Executive’s Review on page 16 of the 2020 Annual Report.
To continue the development of a positive working environment and culture, in 2020 a ‘culture capture’ exercise was undertaken. The Company worked with a third-party to carry out a research study using focus groups, interviews and a survey which provided a bespoke report that provided both insight into the Company’s culture and detailed recommendations required to prompt a cultural shift towards a more collaborative and unified approach, a key enabler to ensuring the effective implementation of the Operational Improvement Plan. Key areas of focus given in the report were:
As a result of the challenges presented by COVID-19, some of the initiatives around cultural shift were delayed and, therefore, culture forms the centrepiece of the 2021 people priorities. This will be kickstarted in 2021 with the launch of the engagement portal.
The temporary closure of the vast majority of the business in March 2020 due to the impact of COVID-19, and the furloughing of 93% of the Company’s UK workforce, required the Company to engage and support its workforce in unprecedented ways. The Company provided an enhanced form of the UK Government’s Coronavirus Job Retention Scheme to its furloughed employees to better support them through the period, and provided regular written updates and communication throughout the period on COVID-19 matters, operations, health and safety, and support available. On the phased re-opening of sites following closures, the safety of employees and customers remained the Company’s number one priority, with all sites being designated as COVID-19 Secure by June 2020.
The Employee Assistance Programme (‘EAP’) is now an established support mechanism for employees, delivered via an independent company called LifeWorks. It 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 2020, 48 people benefitted from individual support provided.
The Company implemented a recruitment freeze in March 2020 following the emergence of COVID-19 and associated focus on overheads, only hiring to fill business critical vacancies and build capability to support the Operational Improvement Programme and opening of the new Ipswich regional distribution centre. The total number of employees reduced year-on-year to 2,498 (2019: 2,575). Employee retention, which is included as one of the Company’s KPIs, increased in the year to 82% (2019: 72%).
The Company actively encourages all its employees to participant in the training opportunities available to them to support their development and the fulfilment of their potential. In addition to the training detailed in Health and Safety, during 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 operates a HM Revenue & Customs approved Save-As-You-Earn share option scheme (‘Sharesave’), a monthly savings scheme facilitating the purchase of shares in Headlam at a discount by eligible employees. The Sharesave not only provides employees with a tax-efficient savings plan but additionally promotes a sense of ownership of the Company. During 2020, 456 eligible employees participated in the Company’s Sharesave schemes, equivalent to 22% of the eligible UK workforce.
Approximately 94% of the workforce have a performance-related bonus opportunity available to them without subscription, and bonus opportunities available cover areas including sales and operating profit.
In January 2020, the Remuneration Committee approved a 2020 cost of living pay increase of 2% to base salary for all UK employees, effective 1 January 2020. Following the emergence of COVID-19, the Company implemented a pay freeze in-line with the focus on the cost base due to the unknown impact and duration of COVID-19 on demand and operations, and no cost of living pay increase has been awarded for 2021. However, a pay increase amount has been incorporated into the 2021 budget to enable senior managers to make discretionary individual pay increase awards where appropriate. For the Company’s employees in Continental Europe, local market practice was followed in 2020 and for 2021.
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 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. The Company recognises there is more to do to improve diversity within its workforce, with the industry as a whole characterised by a lack of diversity. 2021 will see the Company focus on developing a deeper understanding of the make-up of the workforce, and developing a strategy for implementation from 2022 to improve diversity.
Where existing employees become disabled, it is the Company’s policy, wherever practical, to provide continuing employment under normal terms and conditions and to provide training, career development and promotion wherever appropriate. The Company gives full and fair consideration to applications for employment from disabled persons.
As at 31 December 2020, the Company had 2,498 employees of which 21% were female (2019: 21% female). Table showing gender diversity:
As of the date of the 2020 Annual Report, the Board comprised two females and four males, equivalent to a 33% 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 2020 (31 December 2019: 4:1).
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 2020 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 actively encourages each of its businesses to build strong relationships with the communities in which they operate, and where they predominately recruit from. As part of this focus, the Company has in place a Charitable Donations Policy which supports locally-focused charitable giving and community involvement by each of the Company’s businesses, thereby allowing local communities to benefit directly. Charitable giving is undertaken through both monetary donations and donations of floorcovering products to identified local good causes. Monetary donations made during the year in support of charitable causes in local communities, nationally, and those of interest to employees amounted to £17,306 (2019: £12,011). This included a donation of £5,000 towards a minibus for a special educational needs school and £10,513 to Pennies from Heaven on behalf of the Company and its employees. Under the Pennies from Heaven payroll giving scheme, of which the Company has been a member since 2011, the Company matches the charitable donation made by its employees.
The Company’s approach to Human Rights is detailed in Other Statutory Disclosures on page 105 of the 2020 Annual Report.
The Company’s approach to Anti-Corruption and Bribery is detailed in Other Statutory Disclosures on page 105 of the 2020 Annual Report.