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| Our success depends on the skills and talents of our workforce. |
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External view: "mmO2 understands the importance of good employee relations. The company and Connect have a strong record of working in partnership to manage the challenges which arise in a fast changing industry. The benefits of this approach were demonstrated this year during the Project Stockholm reorganisation, where complex people issues were handled in an open and professional way."
Steve Donnelly, National Officer, Connect – the union for professionals in communications
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Employee representative: "Any big change which involves people losing their jobs is inevitably traumatic – and it wasn't without pain. But by and large it was done as quickly as possible while ensuring fairness and objectivity. To my mind it was handled as well as it could be in the circumstances."
Julian Keeley, Head of Regulatory and Carrier Services and one of the employee representatives for middle and senior management of O2 UK. During the restructuring of our operations last year, he played an important part in ensuring that people affected by change were dealt with fairly and objectively
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We want O2 to be a business where people are proud to work, motivated, knowledgeable, included and well rewarded. Our success depends on the skills and talents of our 12,905-strong workforce, their well-being and job satisfaction.
The United Nations Universal Declaration of Human Rights and the International Labour Organisation's principles underpin our practices. We always aim to treat everyone fairly, impartially and without prejudice, regardless of race, colour, nationality, ethnicity, religious affiliation, gender, sexual orientation, marital status, age, disability or caring responsibilities. We exercise zero tolerance to all forms of harassment, and take steps to prevent injury or ill health in the workplace.
Our emphasis is on communicating with employees through regular business updates, team briefings, works councils and good relationships with recognised trade unions in the UK. By 31 March 2004 70 per cent of our UK workforce was represented by trade unions. In mid-2004 we will hold the inaugural meeting of our European Works Council where representatives from across the business will discuss Group performance with senior executives.
Our culture
We promote diversity and individual fulfilment in work by offering competitive rewards, opportunities for personal development and a supportive, flexible and modern working environment. We also encourage employees to take a positive role in the communities they serve.
We have continued to assess employee engagement and offer a channel for feedback through Reflect O2. In October 2003 we saw our employee engagement scores rise by 2.2 per cent to reach 72.7 per cent across the Group.
In August 2003, in response to Reflect O2 findings, we began to introduce extra product training, better information for employees and opportunities for non-retail employees to spend time in our shops.
We are also taking steps to ensure that our culture matches our commitment to corporate responsibility. During the year we gauged our employees' attitudes to it through a Group-wide research programme. The exercise generated a range of new ideas for our business and especially for the 'Can Do in the Community' programme.
As part of our drive to improve the Group's performance and to support our focus on people development we are implementing a new online human resources system. The new system will provide real-time accurate data and automate many currently manual processes, such as recruitment and management reporting. It will enable managers to make fully informed commercial decisions about their team and increase the amount of time they can spend developing their people.
Diversity and human rights
We believe that a company is most likely to serve its employees, customers and stakeholders well if it reflects the diversity of society at large. We want all our employees to benefit from equality of opportunity and reward.
An audit by an external agency in 2003 revealed that, as a Group, we exceed accepted standards on human rights as laid out by the UN Universal Declaration of Human Rights. A study of our employees showed we could do more on diversity hence it became a Group-wide initiative. Danuta Gray, Chief Executive Officer of O2 Ireland, was appointed diversity champion for a new steering group in 2004. This has generated O2's vision for diversity and set out to address specific areas, as well as generated a human rights policy which is available on our website www.O2.com/cr/report2004. The assessment of human rights also asked for improved reporting and measurement which has been followed-up by the introduction of a new database system for our human resources function. We have not devised a separate approach for AIDS and HIV programmes as this matter has not been identified through our operations or through stakeholder engagement.
At O2 we believe that diversity and equality has many facets. We want our managers to be knowledgeable and flexible in dealing with issues as wide-ranging as religious affiliation, dyslexia and the needs of mothers returning to work part-time. We want to instil good practice into managing diversity in our day-to-day activities, such as recruitment, opportunities for job changes and personal development. Details about the ethnic composition of our UK workforce are described in chart 1 below.
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| O2 Germany, O2 Ireland and Manx Telecom are not able to provide ethnicity data due to legal restrictions or because the data is not recorded. |
Through a renewed voluntary census check we managed to encourage 85 per cent of our UK employees to declare their ethnic origin, and the proportion of undeclared individuals who participated in the survey has dropped from 26 per cent to 8 per cent. The proportion of white employees rose to 81 per cent and that of non-white to 11 per cent.
We are increasing our support for events within different ethnic communities to enforce the importance of tolerance and diversity. This year O2 UK sponsored an interactive photographic exhibition celebrating British Asian Youth and we sponsored Asian Mela festivals across Britain. In Ireland we were involved in the Chinese New Year festival.
We noted last year that 24.3 per cent of senior management posts were filled by women, even though they made up 40 per cent of the total workforce. In 2003/04 the figure increased slightly to 25 per cent. Group-wide, 102 out of 408 senior managers are women. We are continuing to monitor and challenge our performance here. See chart 4 below for more details.
We used our annual management pay review to address disparities between the pay and grading levels for men and women in the UK. In consultation with our management union, Connect, we set aside a part of the total remuneration bill to help rectify imbalances.
We are a member of the Employers' Forum on Disability in the UK and aim to offer genuine opportunity for employees with disabilities. To raise our awareness about the topic O2 Ireland is sponsoring the O2 Ability Best Practice Awards, an annual business event to establish the first award system for best practice in employment of people with disabilities.
To continue this work, we have been admitted to the Two Ticks scheme in the UK, guaranteeing that we will interview people with disabilities who apply for jobs with us and meet our criteria for qualifications. Two Ticks will be integrated into our new human resources online recruitment system to ensure managers demonstrate compliance.
Almost half of our permanent workforce is between 25 and 34 years of age. In addition to the information presented in chart 2 we employ 29 individuals above 60 years of age.
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| Culture | Diversity and human rights | Training and reward | Reorganisation | Call centres | Health and safety |
Training, development, reward and recognition
Across the Group we promote continuous learning, through on-the-job training, knowledge sharing, projects, e-learning, workshops and development programmes. Employees are required to agree personal development plans with their managers to get the right support and to track and record progress.
Development activities last year focused on deepening customer and market awareness and on leadership. For example, within the Isle of Man 99 per cent of all employees have attended 'Customer Excellence' events to share experience and identify issues that prevent us from delighting the customer.
In March 2004 we began to enhance our performance review processes to ensure everyone is clear about expectations, and to enable managers to evaluate performance consistently and fairly. We have also created the Executive Development Programme, a leadership forum for around 100 of our most senior managers. This is backed by three further tiers of leadership and management development, supporting those from team leader upwards.
We want our people to know they are valued through our pay and remuneration policies and in our conduct day to day. Share-save schemes are offered to eligible employees across the Group. Each of our businesses runs its own recognition and reward schemes and in July 2003 our top achievers across the Group were informally entertained for a day by the Board. O2 UK ran a summer fun day, with some 4,000 employees and family members attending.
Our pay negotiations with the UK trade unions, the CWU and Connect, were concluded constructively during the year, including the introduction of an adjustment to take account of performance, equal pay and market rates.
Reorganisation
We reorganised the Group last year. The main aims of the exercise, started in October 2003, were to get closer to our customers and devolve operational responsibility more fully to the individual businesses. It involved closing our UK-based products and online business and integrating its role within local operations. The move led to 170 job losses.
We approached this challenge openly, explaining to employees why we needed to strengthen our position for future growth and profitability. This was supported by an internal communications programme, CEO and team briefings, including audio calls, and question and answer sessions.
We consulted employee representative groups and our trade unions. Those who left the Group did so on redundancy terms that exceeded statutory redundancy compensation and additional support was also offered through CV surgeries and job-seeking workshops.
Call centres
Converting employees from temporary employment to full-time status is an important part of improving call centre performance.
The proportion of full-time workers in our UK call centres is 74 per cent, compared to 66 per cent a year ago. During the year we recruited 786 new staff to our call centres and increased the number of people we employ in O2 UK's call centres. This measurement helped us retain the activity in the UK without out-sourcing it overseas.
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| Culture | Diversity and human rights | Training and reward | Reorganisation | Call centres | Health and safety |
Health and safety
We have a Group-wide health and safety strategy, agreed at main Board level, which is championed by David McGlade, CEO of O2 UK and an mmO2 plc Board Director. The key health and safety issues for O2 employees are car driving, repetitive strain injury, fire and ensuring a level of general awareness of health and safety at work.
We run a number of mandatory training programmes in all our operating businesses covering our policies and arrangements for ensuring health and safety. In addition, O2 Germany and O2 Ireland have introduced programmes on well-being, which cover such things as social activities, sports and health screening.
During the financial year O2 UK introduced a drivers' risk assessment and training programme, a web-based package to assess driver knowledge, skill and risk avoidance techniques among employees, and gave 'on road' skills training for 132 employees.
Management of health and safety in the operating businesses is externally audited each year as part of our insurance programme. O2 UK and O2 Ireland have achieved certification to the international health and safety system OHSAS 18001. The management of health and safety procedures of every operating business is reviewed regularly through external audits, which are carried out as part of our insurance programme.
Managers regularly consult with trade unions and other representative bodies on occupational health and safety standards. We are represented at the European Commission Social Dialogue Committee Health and Safety Working Group and we comply with the key elements of the ILO Safety and Health Management System 2001, the UK's HSG65 and the guidelines documented in OHSAS 18001. Our accident reporting arrangements are in line with the ILO Reporting Code of Practice 1995.
During 2003/04, there were 169 accidents resulting in 557 days lost in sick absences. Based on our total workforce, this is equivalent to 13 accidents and 43 days lost in sick absences per 1,000 FTE. We are making good progress towards our target of reducing work injuries by 10 per cent by March 2005. In 2003/04 we received two health and safety enforcement notices in the UK.
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| Culture | Diversity and human rights | Training and reward | Reorganisation | Call centres | Health and safety |
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| ENGAGING WITH EMPLOYEES |
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| An extensive survey of our employees' attitudes revealed a number of things they would like us to do better > |
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| Have we done enough to explain how our technology works and about safety? |
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