Tesco makes significant investment in colleague pay, benefits and skills

Tesco makes significant investment in colleague pay, benefits and skills

7 April 2022

Tesco has reached an agreement with USDAW that includes a substantial new pay deal; increased access to extra hours; investment in training to give colleagues more skills and flexibility and an extension of the colleague Clubcard allowance.

Today, we are announcing a significant investment in our colleagues, through a substantial increase in base pay, an extension of the colleague discount allowance and new training and technology to upskill colleagues, giving them more flexibility in their work and potential to access more hours.

Our colleagues are at the heart of our business and their skills and capabilities have enabled us to deliver for our customers through the challenges of recent times. Our future success depends on our colleagues and our commitment to them has never been stronger.

Following successful negotiations with USDAW, we are pleased to share some changes below:

Significant investment in pay

The new pay deal for hourly-paid store and Customer Fulfilment Centre (CFC) colleagues will see their hourly rates increase 5.8% from £9.55 to £10.10, which will be effective from 24 July 2022. We are proud that, despite significant cost pressures across our industry, we are able to make what is the biggest single-year investment in hourly store/CFC pay in at least a decade – representing around £200m investment in our colleagues.  This new rate means that, over the last 10 years, Tesco’s hourly rate of pay has increased by more than 40%.

For Customer Delivery Drivers, we will be increasing the skills payment to £0.90 per hour effective from 1 May 2022 and aligning our Click & Collect Delivery Assistants to this skills payment, taking the total hourly rate for both to £11.00 from 24 July 2022.

This new deal recognises the contribution our colleagues make to our business at a time when household budgets are under pressure. Given the uncertainty in the economic environment, this will be a one-year deal, rather than two-year, and we will review pay again with USDAW in 2023. 

Extended colleague discount allowance

We have a strong track record of making substantial investments in pay, but we will also continue to invest in our total reward package – an offer that, taken together, provides an unrivalled range of benefits spanning programmes of support for mental, physical, financial wellbeing; colleague Clubcard discounts, and access to offers through our Rewards platform, Tesco Bank and Tesco Mobile.

We know colleagues appreciate the value they get from their Colleague Clubcard so, we will be increasing our Colleague Clubcard discount allowance by £500 taking the annual total allowance for all colleagues to £1,500 effective since 1 April 2022. Allowing colleagues to do even more of their family shops at Tesco at 10% discount, increasing to 15% every payday weekend.

More contracted hours 

Following feedback from colleagues, we will always offer any vacant hours to colleagues working fewer than 16 hours a week, before recruiting externally. When we do recruit externally, all new contracts will be based on a minimum of 16 hours per week*.

Significant investment in colleague training

The last few years have accelerated changes across the retail industry – customers now have more choice in how they shop; the lines between physical retail and online retail are blurring, with more customers choosing to shop online or click and collect as well as visiting our stores. Colleagues tell us they want more opportunities to learn, develop and access new skills and that the ability to work flexibly around their commitments is one of the things they value most about working at Tesco.

As we look to deliver on what customers and colleagues need from us, we want to equip colleagues with future-fit skills to help them continue to build long-term careers. So, we are investing more in skills and training in areas of growth and ensuring they can increase their earning potential by accessing work where and when they want it. This means that all colleagues will gain the skills to serve on a checkout or self-service, pick an online order and replenish the shelves, if applicable in their local store or CFC.

To empower our colleagues to access the work and flexibility they want, we will be launching a new online platform later this year where colleagues will be able to view their schedules, access training and development, and sign up to extra hours if they wish.

Colleagues will retain a primary department where they will work most of their contracted hours but will also be able to work across other departments if the store needs it. This means a colleague currently working in a replenishment role will now be able to work in a range of different teams around the store, serving our customers or completing different duties within our CFCs.

We will of course take into account individual health requirements or needs for any colleague who is not able to work flexibly between roles, to ensure a career at Tesco is accessible to all.

The changes have been collectively agreed with USDAW and part of a wider investment in our colleagues which includes actively supporting their physical and mental wellbeing, both in and out of work, through a sector-leading workplace health programme, and building an inclusive culture where everyone feels welcome.

Jason Tarry, Tesco UK & ROI CEO said: “We are delighted to have reached an agreement with USDAW that recognises the vital role our colleagues play in our business now and in the future, giving them a well-deserved pay rise, more access to extra hours and setting out a long-term commitment and investment in their careers at Tesco. These investments in our colleagues are central to making Tesco what we truly want it to be: a great place to work for all. A place that attracts and retains the best talent in the industry.”

Daniel Adams, USDAW National Officer said: “At such a difficult time, USDAW is pleased to have secured a pay deal that not only delivers the highest hourly rate of pay in the sector but also delivers on the Union’s New Deal for Workers campaign – giving our members the right to request a “normal hours” contract and ensuring a minimum 16-hour contract going forward.  The pay deal is testament to the hard work of USDAW members within Tesco throughout the last 12 months and the commitment and dedication of our Reps who were involved in negotiating the deal.”


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