BT 2010 Annual Report Download - page 21

REVIEW OF THE YEAR OUR RESOURCES
19BT GROUP PLC ANNUAL REPORT & FORM 20-F
ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS REVIEW OF THE YEAR OVERVIEW
We aim to give our people the skills and the tools necessary to
ensure that every customer experience is an excellent one. We offer
our people a wide range of learning and re-skilling opportunities.
For example, this year more than 5,000 BT people, many of whom
have very few formally-recognised qualifications, are undertaking
training that will lead to a nationally-recognised qualification
awarded by a third party. We also support federated and group
apprenticeship schemes.
BT people are also encouraged to volunteer in their communities
and about 4,000 people around the world have been involved in
2010 for around 28,700 days. The community benefits from their
involvement, while they benefit from the opportunity to enhance
their existing skills.
Reward and recognition
We conduct a review of salaries every year. Managers are eligible for
variable, performance-related bonuses, and the long-term share
incentives for our most senior managers are linked to BT’s total
shareholder return and cash generation performance measured over
a period of three years. For Openreach senior managers, the key
measure is Openreach’s performance over a three-year period.
Employees outside the UK currently receive an annual award of
free BT shares or a cash equivalent depending on local legislation
and/or regulation. In the UK, employees receive free broadband.
Employees in more than 25 countries also have the opportunity to
save to buy BT shares at a discount to the price at the start of the
savings period. Under the BT Employee Share Investment Plan, UK
employees can buy BT shares from their pre-tax and pre-National
Insurance salaries. More than 50% of eligible employees participate
in one or more of these plans.
In relation to the 2010 pay review, the company made an offer
to increase salaries but has not reached agreement with the
Communication Workers Union (CWU) regarding a pay settlement
for the team member (non manager) population. The company has
reached an agreement with the pay negotiating committee of
Prospect, the trade union representing managerial and professional
staff, on the pay arrangements for 2010. This agreement was
recommended to the membership by the executive committee of
the union and it is hoped that the settlement will be accepted by
the membership of the union following a ballot which is being
conducted in May 2010.
Pensions
Most of BT’s UK employees are members of a pension scheme –
either the BT Pension Scheme (BTPS), a defined benefit scheme, or
the BT Retirement Saving Scheme (BTRSS), a defined contribution
scheme. The BTPS has around 55,000 active members, 185,000
pensioners and 93,000 deferred members. The BTPS was closed to
new members on 31 March 2001.
As a result of a review of our UK pension arrangements in 2009,
there have been changes to future benefit accruals under the BTPS.
To ensure the scheme remains flexible, fair and sustainable in the
long term, benefits built up from 1 April 2009 are now on a career
average re-valued earnings basis, members’ contributions have
increased, and the scheme has ceased to be contracted out of the
State Second Pension. Also, the normal pension age has risen from
60 to 65. Benefits built up before 1 April 2009 remain linked to
final pensionable salary.
BT has reached agreement with the Trustee of the BTPS on the
triennial funding valuation of the BTPS at 31 December 2008 and a
17-year recovery plan which is discussed in more detail in the
Financial review on page 53.
The BTRSS was set up on 1 April 2009 and has more than 17,500
active members. It is a contract-based, defined contribution
arrangement, which means that what the pension members receive
is linked to contributions paid, the performance of the fund and the
annuity rates at retirement, rather than to their final BT salary.
Health and safety
The health and safety of our people are of paramount importance,
and we continue to seek improvements by focusing on behavioural
and lifestyle change. Details of time lost to injury and sickness
absence are given in the graph below along with their cost to BT.
Our lost time injury rate rose for the first time in three years, and
we failed to meet our target, due to the adverse winter weather
conditions in the UK resulting in an increase in injuries.
Lost time injury rate – lost time injury cases expressed as a rate per
100,000 hours worked on a 12-month rolling average
Non financial performance
Target 2011 2010 2009 2008
Reduce to 0.18 cases 0.209 0.160 0.188
Financial performance
2010 2009 2008
Cost to the business arising new
from injuries resulting in time measure
off work £5.6m £7.0m in 2009
We failed to meet our target for sickness absence this year due to
the H1N1 ‘swine flu’ influenza pandemic, causing an anomaly in
the number of cases of colds and flu.
Sickness absence rate - percentage of calendar days lost to sickness
absence expressed as a 12-month rolling average
Non financial performance
Target 2011 2010 2009 2008
Reduce to 2.21% 2.46% 2.17% 2.43%
Financial performance
2010 2009 2008
BT sick pay costs £95.4m £85.2m £89.8m
Tidying waterways bordering the Olympic Park in Stratford is just
one of many volunteering activities carried out by BT people