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Airbus Benefits Aim for Topflight Performance
"We aspire to be top in class for everything we do," Stephen Dumbleton told a reporter. The reward manager at Airbus UK was explaining the company's benefits package, and he was explaining how it is intended to support the company's strategy. Airbus is one of the world's large aircraft makers, and making jetliners and military aircraft requires excellence in product design, manufacturing, sales, and service. To support efforts at recruiting and keeping employees who will deliver on the company's exacting standards, Airbus wants to provide benefits that make the company an attractive employer.
Adding a further layer of complexity to this challenge, Airbus has operations in several countries and customers around the world. Most workers are located at the headquarters in France and in the United Kingdom, Germany, and Spain, so benefits packages must meet European requirements for employers. And even just in the United Kingdom, Airbus UK's 10,000 employees represent 60 nationalities. The average age is 41, and most employees are men, although the company is striving to attract more female employees, especially in engineering.
Airbus UK compared its total compensation with that of other companies and determined that other employers offered better compensation packages for management-level employees. In contrast, for nonmanagement employees, Airbus was at an acceptable level. But addressing dissatisfaction with compensation packages in Britain by boosting pay was impractical, because pay would be compared across geographic regions, and the company would have to raise pay levels worldwide. Instead, Airbus addressed the weak management compensation package with a flexible approach to benefits.
To design a benefits package for this diverse workforce, Airbus conducted focus groups of high-performing managers in Britain. The groups generated a variety of ideas suggesting a desire for a flexible benefits package. The greatest desire was for private medical insurance (individuals in Britain can use the public health care system but also have the option to purchase coverage from private insurers). Working from a budget starting at 150 British pounds (about $240) per manager per month, the benefits team selected a menu of benefits that started with private medical insurance and added choices from a set of other benefits, which included the choice to opt out of the medical insurance. A company called Vebnet contracted with Airbus to set up an interactive web portal where managers select the benefits they wish to receive within the budgeted amount for their position. The portal presents the choices in three categories: health, security, and lifestyle. Some of the choices are unusual, including a will-writing service and discounts on wine.
One advantage of offering this attractive benefits package to managers is that it creates an additional incentive for employees to develop their careers at Airbus and move into the management ranks. The company identifies high-potential employees and communicates with them to be sure they know a generous benefits package awaits them when they are promoted into their first management position. Dumbleton explains, "We try to make it clear that even though it may be a while before someone is promoted to the next grade, it will be worth the wait."
Still, some of Airbus's creative benefits are available to nonmanagement employees, too. In Britain, for example, one of the most popular benefits is participation in the bikes for work program, which helps people pay for bicycles they can ride to work. Employee participation has risen year after year as employees have signed up to cut their transportation costs, stay fit, and reduce their carbon footprint.
Airbus uses multiple channels to communicate about its benefits. Some messages go out through traditional media such as e-mail and notices on bulletin boards. Television screens in the company play Airbus's corporate channel, including news and background information about various benefits. The company occasionally mails information about the flexible-benefits scheme to employees at their homes-but not often, to avoid intrusiveness. The company also prepares total reward statements so that employees can readily review the value of their benefits package. Since it introduced My Flex to managers, company surveys indicate that their satisfaction with their total compensation has improved, and enrollment levels in the various options provide confirmation that the employees do indeed desire the choices made available to them. Dumbleton hopes that the success of this effort at the management level will lead to an expansion of similar benefits packages tailored to other levels of the organization.
Airbus UK says it wants to attract more female employees, especially female engineers. How could it use its benefits package to help meet the goal of attracting and retaining female engineers?