HR health and wellbeing special 2/6: interview with Tim Taylor, head of group reward at TUI
David Woods, April 11, 2012
Long gone are the days when families got out their holiday brochures on cold January evenings and planned six months ahead for that all-important summer break. As a child, I remember the excitement of holidays building up over months, while I saved pocket money to convert into pesetas, francs, escudos or some other mysterious currency. This is confined to history – although I wish now I had saved some drachma.
But in the modern digital age, for a growing number of consumers, a package holiday is about booking a 'cheap deal' online, weeks or even days before hoping to take a trip, or hand-picking flights, accommodation and car hire through price-comparison sites.
The demands of holidaymakers changed and the industry had to respond.
When I met Tim Taylor (pictured), head of group reward at holiday operator TUI, it was a matter of weeks since he had been promoted into the role, from the UK head of reward position. And it was a matter of days after its biggest competitor and the UK's second-largest travel company, Thomas Cook, reported a loss of £91 million in the first quarter - but said it had managed to hold on to market share, despite the difficult trading conditions.
Thomas Cook's bookings also dropped by 33% in the two weeks to 13 January 2012, which still remains a key period for tour operators. It is thought this result came after the company announced it needed £200 million-worth of extra funding from the bank.
The week before I met Taylor, TUI itself announced a loss of £109 million for its quarter ending December 2012 - blaming a collapse in tourism to North Africa, post-Arab spring, for the lower demand in holidays. But its UK mainstream websites occupy the number one position for online travel; this January, online bookings for summer 2012 were reportedly already up 16% on the previous year.
But as the company changes and develops - making its First Choice brand all-inclusive holidays only from this year - it is continuing to invest in staff. A key focus for Taylor and his team is wellbeing.
And, given it is less than five years since the merger of Thomson and First Choice, not to mention the fact TUI operates across 80 countries and has a workforce ranging from pilots and cabin crew through to holiday reps in resorts and customer service staff working in branches, convincing the board to strategise on employee healthcare looked set to be a considerable undertaking for the HR team.
Taylor's promotion means he is responsible for setting the overall direction for reward across the globe, following his predecessor David House's move to Centrica late last year.
Rational, calm and controlled, Taylor jokes about his recent move into the corner office ("I was out there before," he laughs, pointing at co-workers in the HR department, just outside his new door). But when it comes to the business, his answers are serious and measured.
"We know there are clear financial opportunities for the organisation to invest in wellbeing," he explains. "We are on a journey. We are evolving and developing and we needed to quickly put in place measures to address health and absence issues - as they impact on productivity and cost. Private medical insurance (PMI) costs, for example, reduce with lower absence alone.
"But at the same time, wellbeing is dealing appropriately with staff, showing them the reasons for what we are doing and not just paying lip service to them."
Following the merger, the organisation committed to harmonising terms and conditions at the end of the first year. TUI examined its arrangements with occupational health providers, PMI providers, private health insurers and life assurance. It subsequently created its own trust for PMI schemes. Taylor adds: "This allows us to be more flexible in our approach with PMI, offers us a lower rate of cost than some models on the market and brings PMI back to the business.
"For example, pilots typically develop musculo-skeletal problems more than other employees, so it means we can choose to adjust their policy for physiotherapy. This is a more common approach being taken by employers now and allows us to look at claims and manage them more effectively, saving cost."
At the moment, all TUI employees based in the UK are entitled to single or family PMI cover (depending on level), either paid for by the company or divided 50/50 in cost between employer and employee.
Taylor suggests a future move might be to investigate the opportunity to provide PMI as a flexible benefit, although a decision has not yet been made.
"We are in an ongoing dialogue with BALPA [the pilots' union] about PMI," he says. "Schemes such as this were originally offered to help people get through the NHS, but now PMI is an expected benefit for staff. It should be there to help support staff to return to work and it is the same for income protection - it should, of course, help the long-term sick, but it has to come with a facility to help them get back to work.
"That is why our trust for PMI is so important," he continues. "If you can get one person back to work using a private health insurance scheme, you are already seeing repayments."
Taylor is adamant healthcare in work needs a strategy and should not be about the employer buying a variety of disconnected, off-the-shelf benefits for staff - hence the work the company has been carrying out with integrator Healthcare RM to consolidate. But Taylor thinks a healthcare strategy is not about starting with a benefits fair for staff or giving them gym membership.
"You have got to get the key parts of the systems right before you can add extras," he explains. "You can't start with fluff, but co-ordinate efficiently what you have in place. Healthcare is a group of insured benefits and there are financial pressures on them. Integrate the benefits more effectively for potential savings and in the medium term offer something that's competitive."
Taylor and his team have worked hard to put a communication scheme in place for healthcare, launching a website for staff and promoting healthy eating initiatives for head office employees.
Taylor is keen to point out that wellbeing, although driven principally by HR, is a business strategy and he is working with Stuart MacDonald, TUI director and head of pilot management at Thomson Airways, to devise new directives to minimise absence among pilots, who traditionally 'get grounded' quite quickly.
In other departments, the company is working with its engineers to minimise health problems for them with audibility and lung functions; and with holiday reps, line managers are encouraged to warn colleagues carefully on the dangers of 'stomach issues', to reduce short-term absence in resorts.
The year ahead looks set to be challenging for TUI, given the economic climate and state of affairs in north Africa, but with plans to consolidate its airline into one (Thomson) banner, create further clarity in the differences between its major brands and explore new opportunities in emerging markets, the opportunities are there as well.
The impetus in health strategy will be in further saving cost and reducing absence. TUI shows a coherent health strategy doesn't have to be about spending excessive amounts of money and is necessary, regardless of the prognosis of the company and the economy.
Taylor refers to the consolidation exercise as a 'ringmaster role' and since it has been in place for only a year, it is difficult to measure its effectiveness in monetary terms for TUI.
He explains: "Moving into year two of the strategy, our absence rates are OK and I don't think we have a burning platform here. For us, the next steps are to embed a similar approach to occupational health, really take a focus on this and decide on the most appropriate set of advisers here.
"We also plan to develop more communication around PMI, make sure staff understand and get better metrics to demonstrate effectiveness."
TUI in a minute
TUI has approximately 50,000 staff across the world. IT operates out of seven key markets and is responsible for 200 brands (including Thomson, First Choice, Late Rooms, Hayes & Jarvis and Sunsail) across 180 countries (with the UK being its biggest base, followed by Germany).
The group owns ski companies, a cruise line, port handling services and this year it is investing in holidays for people living in emerging markets, including Russia and China.
In the UK, TUI has about three million customers, 850 travel agency branches and an airline with a fleet of 35. It employs between 15,000 and 20,000 staff, depending on time of year. This includes head office staff, call centre staff, employees in branches, 800 pilots, 2,500 cabin crew and 2,500 holiday 'reps' in resorts world-wide.