Case study: Football fan supports club pension
Heather Ludlam, hospitality administration manager at Manchester City Football Club, is responsible for the team that processes bookings for boxes and restaurants during matches. Ludlam has been working at the club for four years and loves her job because she is mad about football.
“I just love football,” she says. “I have got a job where I enjoy what I’m doing rather than just turning up nine to five to work.” The benefit Ludlam values most is the club’s stakeholder pension, which does not receive contributions from the employer, but does have a salary sacrifice arrangement, whereby tax and employer NI savings are passed on to the employee.
“I started the pension about a year ago,” she says. “I don’t think I would have done that independently from the club.”
Ludlam also appreciates the free season tickets she receives on a pro-rata basis. “We also get season tickets included,” she says. “I don’t get to use them because I’m working, but my boyfriend and his dad go to every game.”
When wealthy foreign owners took over Manchester City Football Club, an HR department was created to kick off a new era for its staff
The excitement is palpable at Manchester City’s Eastlands stadium before one of the most hotly anticipated games of the season – the Manchester derby between bitter rivals City and United. Camera flashes flicker around the 48,000-capacity stadium and the crowd roars as the teams walk out onto the manicured floodlit pitch. A giant pale blue Manchester City flag travels round the stadium on the outstretched hands of spectators. Throughout the match, City fans sing Blue Moon and the contingent of United fans, surrounded by police, let off red flares.
Unfortunately, last November’s match did not live up to expectations, ending in a goalless draw. However, Manchester City’s newly formed HR department has been achieving better results. When Abu Dhabi’s Sheikh Mansour bought the club in 2009, it became one of the richest clubs in the world, and the new owner injected a reported £750 million in the first 18 months. With such huge investment taking place, chief executive Gary Cook gave the go-ahead to create a brand new HR department in August 2009.
The club operates from three sites, and the newly formed HR department has a diverse workforce to cater for. Working at the club’s Carrington training ground are performance analysis experts, doctors, physiotherapists, coaches and cooks, as well as football scouts and recruiters. At the club academy, set up in 1998 to recruit and develop young footballers, child support workers are required to help youngsters who start training from the age of nine. Meanwhile, the City of Manchester Stadium at SportCity houses the club’s executive leadership teams, life president and life secretary, as well as staff working in HR, finance and communications. Groundstaff work across all sites.
Staff increases on match days
Including the players, who do not fall under the HR department’s remit, the total number of permanent staff working for the club is 350. The number of employees increases to 1,100 on match days, when contract staff, including stewards and hostesses, are brought on board.
Andrea Shipman, compensation and benefits manager at Manchester City Football Club, says that when she joined the organisation in December 2009, “somebody had HR as a secondary role – but it’s now a designated department”.
She adds: “One of the key initiatives for the club is to have the best people and it was felt that an HR department would support this and help the club with its goals and objectives. We are quite fortunate that [the management] is focused on best people as a key initiative and that is what they have discussed at executive level. We have got buy-in from Gary Cook and from our owners, who are people-focused. We have been allowed to put benefits forward and roll them out.”
Initially, the focus was to set up and develop HR policies and procedures, including enhanced sick pay and maternity pay, as well as adoption and paternity pay. The next major task was to introduce a human resource information system, dubbed City People, which was rolled out on a self-service basis, allowing staff to book holiday and report absence.
Shipman says: “We have given everyone a log-in so they can book their holidays, which then ‘work flows’ through to their managers. If employees change their bank details or address, it ‘work flows’ through to payroll. It then flags back to HR with the address change, so we can make changes relating to any benefits provisions with the providers.”
Performance development reviews
The system, provided by Cascade, was also designed to incorporate performance development reviews (PDRs), enabling the club to identify the training and development needs of its employees. External trainers were brought in to set objectives for different job roles, and the first PDRs using the system took place in June.
After a discussion with their line managers, employees logged onto the system and input information on what they had achieved and where there might be opportunities for them to learn more. Then, together with the line manager, they set and altered objectives accordingly. Any changes were updated on the system and the individual’s performance rating was recorded by the line manager.
In the future, it is likely bonuses or variable pay will be introduced to link performance with reward. “This year was about getting the system and getting people working [with it],” says Shipman. “Next year we will work and develop the PDR system so there is a correlation between the rating and what you achieve. There will be set criteria, so somebody can look and go ‘well if I do X, Y and Z, than I can achieve A, B and C’.”
After conducting an employee survey, the HR department introduced a raft of new benefits, including group life assurance and group income protection. Employer-paid private medical insurance (medical history disregarded) was introduced in August 2009. Additional family members can be added on a voluntary basis. This benefit has been well received and, according to the club’s employee survey, 82.4% of staff members value its introduction.
The survey also flagged up a pension as the most important benefit to employees. At the moment, the club offers a stakeholder pension via salary sacrifice. There are no contributions from the club, but its savings on national insurance are put back into employees’ pension pots.
Group personal pension
In response to staff feedback, the club is now looking to introduce a group personal pension (GPP) with employer contributions ahead of auto-enrolment in 2012. Manchester City is also looking at the possibility of auto-enrolling employees before the legislation requires them to do so. It is also possible the club will offer matching contributions. Shipman says: “We have listened to our staff and we are putting proposals together. It will obviously have to go to the board.”
Commenting on the possibility of auto-enrolling staff before 2012, Shipman says: “It depends on whether or not we have the platform to allow people to opt out. Another consideration is whether we can cope with the administration.”
Manchester City’s rivalry with other teams, such as Manchester United, does not extend to its HR professionals. For example, the club hosts the HR footballer’s forum, in which it shares best practice with other clubs, while also benchmarking salaries against those offered by its competitors.
“Where there are jobs that are only in football, we can’t salary benchmark outside,” says Shipman, “whereas with finance, HR and marketing, employers can get information through external sources because every business has those [departments]. The forum gives us an opportunity to benchmark for roles that are a little bit more bespoke for football. These include coaches and performance analysis experts.”
Players’ pay a secret
Although there is openness on the pay of club employees working off the pitch, the players’ pay is a closely guarded secret. Of course, there has been a lot of speculation in the press about the staggering pay packets of City players, some of whom reportedly earn more than £100,000 a week.
For the year ended 31 May 2010, the football club reported a net loss of £121.3 million, a figure that included the transfer fees for Carlos Tevez, Emmanuel Adebayor, Kolo Toure, Gareth Barry, Roque Santa Cruz and Joleon Lescott.
Shipman says: “The footballers are dealt with as a separate entity and people accept that players have their social lifestyle and their negotiation tools, and the club is behind that. And, obviously, without the players, the club would not be in existence.”
She adds: “There is such buzz when they win. You come into work and there is a great atmosphere. It’s teamwork. When you look at [the players] out on the pitch, it is a member of the team that is out there. There’s that spirit of wanting them to do well and if they do well, it’s great for the club.”
It is clear Manchester City Football Club does not rely only on its employees’ love of football to stay in their jobs, it also wants to be seen as a top employer to work for from a reward and benefits point of view.
Career history:†Andrea Shipman
Andrea Shipman, compensation and benefits manager at Manchester City, joined the football club in December 2009. Since arriving, she has been responsible for implementing the HRIS system Cascade, P11D benefits administration, fleet policy and the introduction and communication of core benefits, as well as contributing to the club’s overall HR strategy.
“We look after the manager and the first team coaches, so it’s quite a diverse workforce,” she says. “There is Roberto Mancini and the coaches, the executive leadership teams – CEO Gary Cook and his team. It is a great place to work. We are fortunate to have got a leadership team and owners that want to invest and are looking at the environment for their staff.”
In the late 1980s, Shipman began her career in an operational role at Rank Amusements and eventually became area manager for the north-west. She moved into HR in the mid-1990s when she joined RAL. In 1998 she joined Caudwell Group, where she was in charge of a 1,400-vehicle fleet and managed benefits for 10,000 staff across the UK, France and Dubai. When the group was sold in 2006, she moved to 20:20 Mobile Group to become compensation and benefits manager.
Manchester City Football Club at a glance
Manchester City Football Club can trace its roots back to 1880, when St Mark’s Church formed a football team.
After becoming Ardwick AFC, the team moved to Hyde Road and in 1889 played a friendly against Newton Heath in aid of a disaster fund set up after an explosion killed 23 miners near its headquarters.
In 1892 the club was one of the founding members of the English Football League Second Division, before becoming Manchester City Football Club in 1894. Since then, the club has grown steadily and today is the one of the biggest clubs in the country. In 2003 it said farewell to Maine Road, its home ground for 80 years, and moved to the 48,000-capacity City of Manchester Stadium. Last year, the Abu Dhabi United Group became owners of Manchester City and manager Mark Hughes was replaced by Roberto Mancini.
For the year ended 31 May 2010, the financial foundations on which the club operates were strengthened, with the conversion into equity of £304.9 million in shareholder loans. A further £135.8 million of new equity was issued during the financial year, as well as an additional £53.2 million post-year end.
For the first time in its history, City reported revenues in excess of £100 million, with a 44% rise in turnover to £125.1 million. However, the club reported a net loss of £121.3 million, which included the transfer fees for players Carlos Tevez, Emmanuel Adebayor, Kolo Toure, Gareth Barry, Roque Santa Cruz and Joleon Lescott.
The benefits at Manchester City
- Stakeholder pension with employee contributions only.
- Private medical insurance – employer funded for all employees after six months’ service.
- Eye tests.
Life assurance for all employees.
Group income protection after six months’ service.
- Childcare vouchers.
- Enhanced maternity, paternity and adoption leave.
- 23 days’ holiday.
- Professional study leave.
- Enhanced sick pay after 12 months’ service.
- Birthday holiday.
- Dental cover.
- Cash plans.
- Retail discounts.
- Season tickets.
- Subsidised cafe.
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