BT 2004 Annual Report Download - page 17

traditional revenue is regulated, the impact of
regulatory changes served to reduce UK wholesale
revenues. The impact of the mobile termination rate
price cuts reduced our external UK wholesale revenue
by £126 million (4%) in the year. The reductions from
the regulatory network charge control pricing formulae
resulted in weighted average price reductions of
around 7% across the basket of relevant products.
New regulatory-driven products, such as carrier
pre-selection and wholesale access lines, necessitated
investment to create and introduce systems and
processes – all of which are at a cost. However, we
achieved a 1% increase in our UK external revenues
(excluding the impact of mobile termination rate cuts).
We have further developed our product portfolio,
launching products such as wholesale calls and ISDN
30 Service Provider. We have continued with our cost
reduction programmes across the business and
reduced our UK operating cost base by 4% over the
financial year.
In May 2004, we announced we will be introducing
a new wholesale calls product for carrier pre-selection
(CPS) operators that will allow them to use BT directly
for certain calls at a price such that their overall costs
can be considerably reduced. This will be developed in
consultation with Ofcom and the industry, with interim
arrangements to be put in place from July 2004.
Motivate our people and live the BT values
Our people
As at 31 March 2004, we had a diverse workforce of
99,900 people, 91,600 of whom were employed in the
UK. To support our international operations, we
employ 8,300 people in 37 countries outside the UK.
Workforce flexibility
The changing nature of the markets in which we
operate, our focus on cost leadership and our
investment in new services have impacted the shape of
our permanent workforce. During the 2004 financial
year, 2,287 people joined BT, natural attrition was
running at 2.5% and, in the UK, 4,514 people left BT
under our voluntary paid leaver package.
The composition of our workforce is regularly
reviewed and, at the end of the 2004 financial year,
managers and professionals represented 31% of our
workforce.
We supplemented our long-term customer contact
centre workforce in the UK with an additional
workforce of 4.6% outside the UK. This workforce is
under our direction and control.
We also instigated a review of our procurement
contracts for the employment of temporary and agency
workers. At 31 March 2004, we were working with ten
agencies, with costs for contingency workers (agency
and contractors) reducing year on year by 17%.
Shares and pensions
Since privatisation, we have been committed to
providing our employees with a stake in the company.
Under the BT Employee Share Investment Plan
(ESIP), employees can purchase shares in the company
from their pre-tax salaries. In addition, they can buy
shares at a discount under our savings-related share
option plans. In the 2004 financial year, £20 million
was allocated to provide free shares to employees
under the ESIP. (Employees outside the UK receive a
cash payment equivalent to the value of the shares.)
This allocation was linked to corporate performance
measures determined by the Board. 98% of eligible
employees participate in one or more of these plans.
Most of our employees are members of the BT
Pension Scheme or the BT Retirement Plan, both of
which are controlled by independent trustees. The BT
Pension Scheme was closed to new members on
31 March 2001. The majority of new employees are
eligible to join the BT Retirement Plan.
Listening to our people
Our annual employee attitude survey, most recently
conducted in early 2004, gives employees the chance
to express their opinions about the company, their
managers and the work they do. It encourages
managers and their teams to work together to
implement action plans to address specific issues. 80%
of people participated in the survey and the results
showed, for example, that 95% of employees are
committed to our customers and 90% feel that their
actions align with our brand and people values.
Employees are informed about our business
through a wide range of communications channels,
including our online news service, monthly newspaper,
regular e-mail bulletins and senior management web
chats and web cast briefings. This ensures that key
messages are available for everyone, with additional
information sourced on an ‘‘as needs’’ basis.
In the UK two main trade unions are recognised by
the company. In continental Europe, we have strong
relationships with the works councils, with which we
work closely, both on an operational basis and as
strategic stakeholders.
Health and safety
We have zero tolerance of workplace accidents and
have set rigorous targets to effect significant
improvements across the company. During the 2004
financial year, we beat our three-year targets set in
2000/01. Over the three years, we have reduced
workplace injuries by 40% and the number of cases of
occupational ill-health referred to our occupational
health service by 36%.
Diversity in our workforce
A work environment that actively supports all our
employees is central to BT’s culture. We champion
equality of opportunity – regardless of gender, race,
sexual orientation, disability or age – throughout the
company. Internal networks include the Womens’
Network (gender equality) and Kaleidoscope (sexual
orientation).
During the 2004 financial year, we were awarded
the platinum standard by Opportunity Now for our
work on gender equality, the gold standard by Race for
Opportunity for our work on race equality, and the
Business in the Community Diversity Award –
recognising our forward-thinking and diverse approach
16 Operating and financial review BT Annual Report and Form 20-F 2004