Could you handle a Formula 1 HR contract?

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As creative as the HR thinkers in the Blogosphere (and the associated Twitterati) tend to be on things like working hours and location, less is said about the fundamentals of the employment contracts that we might like to see. As Lewis Hamilton signs a new contract with Mercedes worth a reported £100m, I thought it might be time to see if the HR world could keep up with an F1 contract.

To help us think about this, I have set out the main headings that most Formula 1 drivers will have in their contracts and suggested some possible HR practitioner alternatives. If you see it differently, let me know.

(I’ve taken the F1 contract headings from Paul Weaver’s recent article in the Guardian. You can read Paul’s full article here. )

Duration One to three years. The smaller teams tend to sign one-year deals, conditional on sponsorship income. It is rare for a driver to have a contract for more than three years because so much can change in that time.

Do we still think about fixed duration contracts as being less desirable than permanent ones? Although permanency brings with it security, it also gets us into a position where salary negotiation becomes difficult. The benefit for the F1 driver is that they can strengthen their negotiating position during the contract by putting in top level performances. Can HR practitioners do the same? How would you feel saying to a new employer that you will take a contract for two years at £XXk, but will then want to renegotiate. At the end of that period they will either know that you aren’t worth that much, or that you are worth a whole lot more…

Options Teams like to include an option to continue if they notify the driver by a certain date. This is more likely at the lower end of the grid.

Would proposing an option in your contract enable you to negotiate a more senior position with a more desirable employer? This could work on the basis that they aren’t bound to keep you, but can if they are impressed. How well set up are we currently to make offers to organisations we want to work with on more creative terms and before they have advertised a vacancy?

Sponsorship Some teams sell packages of sponsorship rights, brought to the team by the driver. Logo placement is for negotiation as is paddock access, paddock club and driver appearance days. There may some obligation for the team to provide live action demos if the deal is a big one.

If you are an engaged, online HR practitioner in 2015 you are in some sense a publicist. You aren’t just bringing yourself to an organisation, you are bringing your brand. That brand includes the interviews you have given to People Management magazine, your invites to conferences, and the fact you chair a CIPD branch. How confident are we in making this clear to employers during the contract negotiation phase? If they are looking to strengthen their overall HR capability, having you rather than somebody nobody in HR has ever heard of could be a major advantage.

Promotional activities The more successful the driver the more valuable the days, because they aren’t too keen to do many sponsor days. Thirty days is a common starting point, with some teams wanting limitless days.

What other things are you proposing to offer this new organisation? Masterclasses for managers? Outreach work in their CSR initiatives? Coaching for senior teams or new directors? There is likely to be plenty outside the day job that you could bring to a new organisation and that would be expensive for them to buy in separately.

Expenses Driver and trainer expenses are normal in smaller teams. Bigger teams may ask the driver to pay expenses as their taste may be more elaborate and expensive. Drivers fly long haul business class in smaller teams, and first for more established drivers with bigger teams.

This is a good one. What are your demands? An office? Ok, maybe not, but how about a Mac book? I presume a 3G enabled iPad comes as standard? What about CIPD membership fees and a ticket for the annual conference – surely they will pick up the tab for those expenses? There is tonnes to go at here.

Passes Normally a driver is given a paddock pass for his trainer and his manager. Further paddock passes can be added as part of a sponsorship or commercial rights package.

Who else can benefit from the organisation’s staff discounts and VIPs services? Do these benefits extend to your family? Are there hospitality allowances or packages for you to use to network with external colleagues and suppliers of services?

Personal sponsorship spaces Pay drivers will often negotiate personal sponsorship spaces on their helmets, caps, or race suits. As well as adding revenue this allows drivers to maintain long-standing relationships while teams can cut back on salary demands.

How are you going to maintain long standing relationships which have a life both pre and post the job you are about to take up? You understand that they have their own IT platform but you have worked with a small eRecruitment supplier to develop their system and will absolutely want to use it.

Prize money/bonuses Probably an area where there are differences between team-mates. Normally a price per point plus podium bonus, win bonus, championship bonus.

If your prospective new employer is nervous about offering you the salary you are asking for, how about making it dependent on achieving outcomes. They will have an idea of what they want to see change in the organisation and at least some of that will be quantifiable.

Driver identity The driver grants the team and their sponsors the right to use the name, fame, image and reputation (in any manner depicting the driver in his racewear or trackwear). More established drivers will try to carve out some rights here to use for their own merchandise or personal sponsors but these are usually pretty tightly controlled and owned by the teams in a racing context.

Does your Twitter account now change from @JohnSmithHR to @NHSjohn or @JohnIBMplc ? Are you still able to blog and choose which HR media to do and which to politely refuse, or are you now owned by the Press office?

Trophies Do they become the property of the driver or the team?

Dean Royles can’t win ‘Most Influential HR Practitioner’ every year. When it’s your turn in the limelight, are you taking an award back to the office for their trophy cabinet or is it going straight back to your office at home?

Formula for success or formula for disaster? Let me know what you think on Twitter @DavidJacksonHR or in the comments box below.  

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