FirstGroup, United Kingdom: Flexible working practices
FirstGroup is the UK’s largest surface transportation company, with an annual turnover of nearly £2.7 billion and employing some 67,000 employees across the UK and North America. FirstGroup operates rail, tram and bus services. It is the largest bus operator in the UK, running more than 20% of all local bus services and carrying 2.8 million passengers daily on 9,300 buses. This study focuses on FirstGroup’s UK Bus Division, which employs over 25,000 people, most of whom are drivers.
Up to the 1980s, local bus transport in the UK was mainly supplied by the public sector. However, the 1985 Transport Act changed this trend, and now the majority of bus services are provided by the private sector.
FirstGroup developed its bus operations during this deregulated period. Despite the changed regulatory environment, during the last 20 years the company has had to maintain strict financial controls as a private-sector enterprise.
The ‘Flexible Decade’ initiative put in place by the company is driven very much by labour market demands. Bus drivers make up the majority of the workforce, but it tends to be difficult to recruit and retain drivers. These employees often work long shifts to maximise earnings. The other main categories of staff within the company are engineers and maintenance staff, and administrative and clerical staff. The engineers, in addition to drivers, sometimes report physical health problems when they are in their 50s and 60s. In a relatively small industry, it can be difficult to provide those employees with opportunities for redeployment.
The original initiative
The company began developing its ‘Total Rewards’ programme in 2001 to provide tailored benefits and opportunities for its employees. The Flexible Decade initiative is a key part of the Total Rewards programme and is designed to enhance the company’s ability to attract and retain older employees. Employees between the ages of 60 and 70 years can combine flexible working opportunities with pension scheme options.
The programme was developed for the UK Bus Division in the south and west of England and South Wales, and then implemented in other branches. The initiative is promoted at pre-retirement seminars and advice clinics on the options available. Employees of the First UK Bus Pension Scheme may choose to accept their pension at any time after 60 years of age.
This flexible approach allows workers to:
- switch to part-time work and draw a reduced pension after the age of 60 years; or,
- continue to work full or part time beyond 65 years of age, while drawing, continuing to accrue, or deferring their pension on favourable terms.
There were two driving forces behind the development of the scheme. One centred on labour market issues and the lack of younger drivers joining the industry. The other was the company’s desire to help employees to manage more effectively their later years of life, both financially and personally.
Good practice today
The Total Rewards programme and the Flexible Decade initiative are relatively new to the company. The Flexible Decade initiative was designed to create a flexible labour pool, to retain skilled and experienced staff on a full or part-time basis, to make savings on recruitment and training costs, and to reduce the number of potential recruits for competitor companies. The initiative has only recently completed its roll-out across the UK Bus Division.
Within the company, there are ongoing plans to develop further support mechanisms for staff. In formulating these plans, management uses feedback from staff surveys and more informal meetings in the depots. Staff development is encouraged, for example, by facilitating learning opportunities for bus drivers to gain National Vocational Qualifications (NVQs) and Business and Technology Education Council (BTEC) awards. The company has developed workplace learning centres in cooperation with the trade unions. There are already 32 learning centres across the UK, which are accessible to 30% of the workforce, and more centres are planned.
Abusive behaviour towards employees from some members of the public is a recurring problem facing the company, and can adversely affect perceptions of the transport industry among potential recruits. The company has a dual approach to dealing with this problem: it supports staff by seeking the prosecution of abusive customers, and it encourages good customer care practice among employees.
Two broad initiatives that the company would like to pursue with its employees are financial awareness and health awareness.
It is the company’s view that pension policies should be more broadly focused over the life course, and it is attempting to engender a culture of lifetime saving and financial awareness. The company supports staff in using the credit union, and tries to encourage financial well-being among the employees. This management approach is not paternalistic, but is rather an attempt to help employees to develop financial skills to manage saving and spending at different points of time during their lives.
The company also aims to raise awareness – particularly among older staff – of health and well-being issues, and to promote an understanding of demographic trends that show an increase in life expectancy.
These developments in human resource management policy support individuals in life-course planning. They may also help to extend the working lives of drivers, including some of those who leave the labour market early through ill-health.
The Flexible Decade initiative will help the company to address the issues of labour market supply, as demographic and employment trends suggest that recruitment challenges will become more difficult in the future.
FirstGroup has not yet reviewed the outcomes of the Flexible Decade initiative and, to date, there have been no specific results on the success of the project. The company strives to seek ways of meeting recruitment and retention needs within the UK, which includes sourcing employees from abroad. It also endeavours to ensure that the composition of its workforce reflects that of the communities it serves.
Contact: John Aitchison, email: firstname.lastname@example.org