Phoenix Group share their total reward journey

ABI JOHNSON: Thank you.

TOM WOOLDRIDGE: So my first question for you is, can you tell us a little bit about the journey that Phoenix Group have been on over the past 18 months?

ABI JOHNSON: Yeah, certainly. So we started off as a multitude of different companies coming together through different mergers and acquisitions. And we wanted to have a single approach to pay and compensation and so we needed to come up with a philosophy of how do we want to do reward at Phoenix and how do we want our colleagues to feel about the reward and and what are the core principles around that. A big part of of the project was about how do we increase transparency and trust in our remuneration structure through different legacy approaches. People had kind of misgivings about what our approach was, so we needed to come up with a way of making them feel like it was a fair, transparent process. So. A core part of what we've been working on was about enhancing our career architecture. Our job levels and grading and then being able to publish salary ranges behind that and they would all be published on our Internet. So we kind of started the journey 18 months ago and we made a commitment to colleagues there and then that we would be delivering this and that we would be publishing salary ranges. Within the next, within the next. So that was the start of the journey and probably the easiest bit of the journey and and then it there was all the work behind it. So it was about kind of coming up with what we wanted the structure to be. Looking at the feedback we'd already had around, people felt frustrated about how broad our career levels were limited career progression and and not enough. Granularity of detail to help kind of distinguish the different. Also we introduced sub levels with a within our grade architecture and then we went about defining our salary ranges, then by those by those sub levels.

TOM WOOLDRIDGE: And can you talk a little bit more you you mentioned what employees have been asking for, can you tell us a little bit more about how employee listening responding to to needs tracking employee engagement through this has played a part of either your approach or the results of of doing this?

ABI JOHNSON: So engagement is really, really key at Phoenix and we run monthly engagement surveys. Everyone's really used to it. You, you might think that they'd get fatigue, it it it isn't. People are really good response rates on it. And there's some very, very rewards specific. Questions and feedback on there. So we absolutely started with that. There was a. Lot of conversations on our engagement survey around not feeling like managers are empowered to make decisions on salaries, feeling because it's it like it's a HR owned process. And that there was, you know, there was no transparency, there was no fairness. They didn't understand how salaries were set, didn't understand all of those. So that was a massive starting point and probably like a catalyst to to our journey. So we absolutely wanted to be able to empower managers to make the right decisions. But that means giving them the tools in which to do. That, you know, it had to, we had to make sure that they were on the journey from the start with us. So there was a lot of bringing the business into the decisions that we were making talking to them early on about the architecture and the sub bands, they were absolutely involved in mapping the six and six and a half thousand people. Into the right, the right levels. So they were involved from the very start. They understood it and then we would talk to them. We had big leader together sessions every month where we would talk to them and and give them updates on progress. And then we started to roll out the toolkit for them of how we were going to do this, how were we going to implement it and what did they need. And and this is where we worked really closely. With with you, Tom to get get the communication right because that was absolutely critical and you know, not just the college communication which obviously is is very. Important. That the manager communicating, helping our leaders feel ready and able to have the conversations when the the the individual statements landed to understand the framework and and empower them to be able to have the right conversations about salaries and and a whole host of other things as well. So yeah, absolutely critical part of that. Was taking, taking our leaders on the journey with. Us. And making sure they were equipped and that went down to. You know, we worked with you to create a manager guide that they would have with all the key information that they needed to know, but also then conversation, hints and guidance. So for every scenario outcome of of how we mapped colleagues to the salary ranges, whether they were below range, you know all those different scenarios we had conversation talking points of this is what you want to talk about. These are the key points to talk about. Don't and then the list of. Don't do so don't commit to looking at salaries, and if we don't think that that's an opportunity, so you know it's, it's equipping them with the skills and the knowledge for them to be able to have the right conversations with with the individuals.

TOM WOOLDRIDGE: Thanks, Abi. And can you also talk about, uh, you've given a a good picture of kind of how you took managers on the journey and how you equipped them to, uh, to have better conversations with employees in context of greater transparency. Can you talk a little bit about what the experience was for colleagues? So both what they received at the point of delivering transparency? But also how you right from the start around commitments that you made and things like that?

ABI JOHNSON: Yeah. So there was definitely a strength of feeling on our colleagues about their, about their fixed pay and and kind of in particular salaries. And we had that through our engagement scores. Were very low around this question. The the reward related questions specifically around salary so. And they were they had been asking for the greater transparency. So we came out really early and wanted to make the commitment. We are doing it and we will be giving you salary ranges. And I think because it had maybe gone on slightly longer up into the point of us kind of kicking the project off, we wanted to be really clear with time scales as well. So we made commitments that by. Q4 of 2023. We would publish the salary, the salary ranges and the new grade architecture so you know we made really, really big statements, but then obviously had to live up to them, had to had to make sure we delivered on them is really important and keeping our colleagues engaged during that time. And I think what's really interesting and as as soon as we made this statement and the commitment to publish ranges. We started to see an improvement in our reward engagement scores. So not Even so, even even before we delivered the ranges. Just making that commitment got people starting on the journey with us. And and then there was kind of some some regular updates as we went through. So you know, if we were issuing updates to the business or we kind of had our lead, our monthly leaders together, we would give them points to Cascade to team. So it was updates on salary ranges. And and then our communication really ramped up towards the end. So what we did was working with you was produce individual statements, so. About 6 1/2 thousand people would get a statement which would confirm what career family they were mapped to, what level in the in the career career structure, So what band were they in, what their salary range was for their role, and then if they were below minimum and what they're below, you know how much were they and and the amount that we would be bringing them up to the minimum. And then with that was a colleague guide, so made sure that we kind of talked through all the key points we're in the colleague guide of kind of how to understand what fixed pay is you know how do we do it, how do we make the salary ranges. So we were really, really open with them about this is this is exactly the process we've gone through. These are how salary ranges are created, you know. We've and the process of how we've mapped your role and and I think again that's where where we worked with you and what what really helped was having WCW to help with some of the mapping into the different levels and and benchmarking of roles gave a level of kind of objectiveness and independence that colleagues could trust and that we had done it. Roughly, we had other people validating our work to make sure it was, you know, we were doing it right. We were doing it correctly. So I think that really helped build the trust in. So they had their statement and actually, you know, whilst obviously you always have to maybe rejig some of them because you know maybe we've got we've got something wrong or in. But actually we only had one appeal formal appeal of they weren't happy with their salary range or where they had been mapped. So that's 6 1/2 thousand statements we probably had. One formal formal appeal, which I think is is amazing and I think shows the quality and the robustness of the communication that we issued to colleagues. They really understood it and you know we were when the when the when the statements went out, we were, you know, ready. All by our computers waiting for the queries to start coming in and and we didn't get them to the point where, you know, we were checking in, making sure people got their statements, making sure it all happened. And and I think there was very little questions coming in which I think is amazing because I think that just proves the point of the communication was so important. Yes, having salary ranges is incredibly important. It is what they wanted, but how you communicate it is is just as important because it could have landed very, very different. OK.

TOM WOOLDRIDGE: Couldn't agree more and you mentioned some of the impacts and positive impacts from from this from improved engagement scores to just one case and challenge in in context of 6 1/2 thousand employees receiving their where they sit within a within a range. For some of them, for the first time, have you got any learnings that for someone who's just at the start of their journey in relation to more transparency on base pay? What you would have done differently, or what or or some of the challenges that you experienced through the?

ABI JOHNSON: Project. Yeah, absolutely. So I think there there are there are quite a few learnings I think stakeholder engagement is huge and and it is kind of you know fundamental to the success of a project making sure from X, Co down. That they understand what we're doing and why we're doing it and they are involved. You know, we had some concerns from some of our most senior managers and leaders about publishing ranges. There was a a nervousness as to what that would bring. Would we get loads of salary issues, you know, would people become less engaged because they don't feel they're paid, right. So you have to kind of, you know try and help them understand that that's not that's not the case. And actually, you know it is a positive thing and and so yeah, stakeholder engagement was massive and and including a lot of the key leaders in. In the mapping, showing them the ranges, showing them the architecture and going does that, does that work for you? Making sure I think that's really important, that they need to be involved in it. It can't just be seen to be an HR thing that's delivered out and and done to them. They have to be a part of it because then they have to actually, you know, they own the messages a lot more so. That was that was really fundamental. I wouldn't. I wouldn't underestimate the the time it took and the quality of the data that you have to have to be able to do it. We really struggled with the quality of our data and that took us. So we you know, we ended up taking a few months just cleansing the data before we could actually even start doing the the, the mapping, the benchmarking and. That was that was a really time consuming thing and I think we had underestimated it and kind of made it maybe a bit pushed on the timelines to make sure we delivered on our commitment of Q4. So definitely 11 to take to take away.

TOM WOOLDRIDGE: Thanks so much, Abi. And just last question for you. Obviously, now that you've got fixed pay ranges out there for employees, it's not the end of the journey and very much, I know you've got a lot of priorities for this year and beyond. So can you just tell us what's next in terms of broader total rewards at Phoenix Group?

ABI JOHNSON: Yeah. Feels very much like that was just the start rather than the end, so it is constantly evolving. We want to look more at how we overlay skills onto our great architecture and our career work. So how do we how do we be able to map out the skills of all our colleagues better? So that's that's a big. One, but also looking more into our variable pay. So kind of we feel like we've really got the philosophy and our approach to fixed fixed pay done. So now we're looking at you know recognition I think that's that's a huge thing for us and how do we embed our culture and our values as a company by having a recognitions game and and what can that deliver. So that's a that's a big project for us this year. And justice, having a look at all the other aspects of our variable pay. So what does our annual bonus plan look like? You know, I think for for everything that we do, it is about how do we how are all the all the different levers that a manager can pull to make sure that we engage and retain key talent and. How do we empower them to do it? So it's about kind of how much a devolving and empowering managers to to make the good decisions for their team.

TOM WOOLDRIDGE: Amazing. Thank you very much for sharing your story. It's been a pleasure being involved and it's also exciting to see where Phoenix Group goes next.

ABI JOHNSON: Thank you.