A LevelBusinessAQAExam QuestionsManaging PeoplePeople Management

People Management (AQA A Level Business): Exam Questions

Exam code: 7132

Syllabus Edition

First teaching 2026

First exams 2028

2 hours15 questions
Easy
Medium
Hard
1
6 marks

Source A: Timpson Group

Timpson Group is one of the largest service retailers in the United Kingdom and Ireland. It repairs shoes, cuts keys, mends watches, cleans clothes and prints photographs, trading as Timpson, Max Spielmann, Snappy Snaps, Johnsons, The Watch Lab, Jeeves, Timpson Security and Barbershop. It has been a family business since 1865 and is now run by the sixth generation of Timpsons.

In the 52 weeks to 27 September 2025 sales rose 5.6% to £367 million, from £347 million, the fourth year in a row of record sales. Key cutting alone took £101 million. Watch repair now brings in more than twice as much as shoe repair, the service the company was built on.

The way Timpson Group is run is unusual, and it is deliberate. The company picks colleagues for their personality and then trusts them to do the job their way. It calls this Upside Down Management. John Timpson puts it like this: "The best way to run a business is to trust your colleagues with the freedom to do their job in the way they know best." Colleagues in the shops make decisions that in most retailers would be taken at head office.

Where those colleagues come from is unusual too. After visiting a prison in 2002 and hiring a young man named Matt, Timpson Group has become one of the largest employers of ex-offenders in the United Kingdom. Over 12% of its 4 500+ colleagues have a past criminal conviction. The Timpson Foundation spends over £1 million a year supporting the employment of people from prison, and runs training academies inside prisons so that prisoners learn the shop services before they are released. Some colleagues work on day release while still serving a sentence. The Foundation also recruits care leavers and people leaving the armed forces.

The company says the approach works on its own terms: 75% of the ex-offenders it recruits stay with the business long term, and it describes them as loyal, hardworking colleagues.

Source: Timpson Group, 2026; The Times, 23 September 2026

Appendix B: Timpson Group colleagues by type of contract

Pie chart of Timpson Group colleagues by contract: full-time 54%, part-time 40%, apprentices and trainees 3%, and on release on temporary licence 2%; full-time and part-time make up the largest shares.
Table of Timpson Group colleagues by contract: full-time 2,420 (54.4%), part-time 1,780 (40.0%), apprentices and trainees 155 (3.5%), and on release on temporary licence 95 (2.1%); total 4,450 (100%).

Source: Analyst

Analyse one way in which employing a mix of full-time and part-time colleagues might affect the service Timpson Group's shops are able to give customers.

How did you do?

2
6 marks

Source A: Royal Mail

Royal Mail delivers letters and parcels to every address in the United Kingdom. It is part of International Distribution Services, which also owns the European parcel business GLS and which employed 153 552 people in 2024 and had revenue of £12 679 million. Around 85 000 of Royal Mail's people are postal delivery workers, and the business takes on about 16 000 extra temporary workers each year between late October and January to cope with the Christmas rush.

In June 2025 the company stopped being a public limited company listed on the stock market. EP Group, controlled by the Czech businessman Daniel Křetínský, completed a £3.6 billion takeover that the UK government had approved in December 2024 and that became unconditional on 30 April 2025.

Most of Royal Mail's people belong to the Communication Workers Union, and relations with that union have been difficult. Strikes ran from August to December 2022, and before the two sides returned to talks Royal Mail said it was losing up to £1 million a day. The dispute ended in July 2023 with a three-year deal worth a 10% pay increase and a £500 one-off payment, accepted by 76% of those who voted on a 67% turnout.

A second three-year deal followed on 3 July 2025: 4.2% in 2025, then increases linked to the Consumer Prices Index of at least 2% in 2026 and at least 2% in 2027, worth more than 8% in total and backdated to 1 April 2025. The company also promised no compulsory redundancies for the life of the deal.

Service quality remains a problem. In October 2025 the regulator Ofcom fined Royal Mail £21 million for missing its delivery targets in 2024/25, the third year in a row it had been fined. The fine was reduced from £30 million because the company admitted liability and settled. Royal Mail returned to profit in 2024/25, reporting £12 million.

Source: International Distribution Services, Ofcom and Communication Workers Union announcements, 2022 to 2026

Appendix D: Royal Mail's delivery workforce

Line chart of employee turnover among delivery workers, rising from 9.8% in 2021/22 to 14.2% in 2024/25; the intervening values are 11.6% and 13.1%, with a 0 to 16% vertical axis.
Two tables, followed by a single measure. Employee turnover among delivery workers: 2021/22 9.8%; 2022/23 11.6%; 2023/24 13.1%; 2024/25 14.2%. How the delivery workforce is employed: permanent full-time 70 700 employees; permanent part-time 14 300 employees; temporary, at the Christmas peak only, 16 000 employees. Working days lost to absence for each employee in 2024/25: 11.4.

Source: Analyst

Royal Mail takes on about 16 000 extra temporary workers each year for the Christmas peak.

Analyse one way in which using temporary employees rather than permanent ones might affect Royal Mail's costs.

How did you do?

3
6 marks

Source A: Compass Group

Compass Group is the largest contract catering business in the world. It does not own restaurants. Instead it is hired by other organisations (offices, hospitals, schools, universities, factories, prisons, sports grounds and oil platforms) to run their canteens and cafés for them. If it loses a contract, the client usually keeps the kitchen and hires someone else to work in it.

It is enormous. In the year to September 2025 it had revenue of $46.1 billion, up 9.7%, and it employed over 590 000 people. Organic revenue grew 8.7%, made up of 4.5% from winning new business, about 3% from higher prices and about 1% from selling more. Underlying operating profit grew 11.7% and underlying free cash flow reached $1 975 million, up 13.5%. Net new business growth stayed inside its 4% to 5% target range for the fourth year running.

Almost all of those 590 000 people are frontline: chefs, kitchen porters, counter staff and cleaners, working in someone else's building for a wage close to the legal minimum. Many are on contracts with variable hours, because a university canteen needs very different numbers in October and in July, and because a contract can end at three months' notice.

That flexibility has a price. People leave often, and every leaver has to be recruited, checked, trained in food safety and brought up to speed on a client's site. Clients notice when the faces change: the people serving lunch are the only part of Compass Group that most of its clients' employees ever see.

The business is also unusual in how it is run. A unit manager in a single hospital canteen makes decisions that in most companies of this size would go to head office, because nobody at head office knows that hospital.

Source: Compass Group annual results for the year to September 2025

Appendix B: Compass Group's workforce in the UK and Ireland

Bar chart of Compass Group UK and Ireland employees by contract type: variable hours 26,400; permanent full-time 19,800; permanent part-time 11,400; agency 2,400. The y-axis ranges from 0 to 28,000 employees.
Tables show contract types and turnover. Employees: variable hours 26,400; permanent full-time 19,800; permanent part-time 11,400; agency 2,400; total 60,000. Turnover 38%; 22,800 leave yearly; replacement costs £1,450; 44% leave within three months.

Source: Analyst

Analyse one way in which employing 26 400 people on variable-hours contracts might affect Compass Group's costs.

How did you do?

4
6 marks

Source A: Castlebrook Veterinary Group

Castlebrook Veterinary Group runs seven veterinary practices across the Midlands. It employs 95 people, of whom 30 are qualified vets, and in the year to September 2025 it had revenue of £9.4 million and an operating profit of £710 000.

It did not grow by opening practices. It grew by buying them. Four of the seven were independent practices bought in the last five years, each with its own name over the door, its own way of booking appointments and its own long-standing clients. Castlebrook kept the names.

The problem is vets. There are not enough of them in the United Kingdom, and small animal practices compete for the same small pool. Six of Castlebrook's thirty vet posts are unfilled. When a practice cannot cover a day it books a locum, a self-employed vet who works for a day rate, and that day rate has risen every year. A locum does not know the animals, cannot be booked for follow-up appointments, and will not take part in the out-of-hours rota.

How much each practice decides for itself is now under review. At present each practice manager sets their own prices, chooses their own suppliers and recruits their own staff. The group's clinical director, Marcus Oyelaran, argues that this is why the group pays four different prices for the same vaccine and why recruitment takes eleven weeks. The practice managers argue that their clients came to them, not to Castlebrook, and that a practice in a market town cannot charge what one in a city suburb charges.

Source: Castlebrook Veterinary Group

Appendix B: How Castlebrook covers its vet rota

Line chart of locum days booked, rising from 540 in 2022–23 to 890 in 2023–24 and 1,300 in 2024–25. The vertical axis ranges from 0 to 1,400 locum days in 200-day intervals.
Tables show locum use and costs: 2022–23, 540 days at £470 (£253,800); 2023–24, 890 at £540 (£480,600); 2024–25, 1,300 at £620 (£806,000). Permanent vet salary is £62,000; repeat clients fell from 81% to 54%; locums join no out-of-hours rota.

Source: Castlebrook Veterinary Group

Analyse one way in which using self-employed locum vets rather than permanent ones might affect the service Castlebrook Veterinary Group gives its clients.

How did you do?

5
6 marks

Source A: Pret A Manger

Pret A Manger sells sandwiches, salads and coffee, made fresh in the shop each morning and thrown away or given to charity at the end of the day. It has grown past 750 shops in 21 countries, of which more than 500 are in the United Kingdom, and employs about 12 500 team members.

In 2025 system sales rose 2.7% to £1.2 billion and the business made an operating profit of £37 million. In the first four months of 2026 sales rose 7% worldwide and 8% in the United Kingdom, helped by opening shops in railway stations, airports and, for the first time, a drive-through in Warrington.

The company says its growth comes from investing in training its teams so that service is faster. It runs what it calls the Pret Academy, and more than 85% of its managers started as team members on the shop floor.

That matters more at Pret than at most retailers, because the job is unusually demanding. Everything is made on site before the shop opens, the lunchtime rush is ferocious and brief, and a queue that moves slowly loses customers who have forty minutes and somewhere else to go. A new team member who has not been trained properly slows the queue down.

Shops are run by a shop manager who reports to an area manager. How much a shop manager may decide for themselves, and how many shops an area manager can realistically look after as the estate grows past 750, is now under discussion.

Source: Pret A Manger announcements, 2025 and 2026

Appendix C: What a Pret shop manager decides

Two tables. Who takes each decision, the shop manager or someone above the shop: how many of each item to make that morning, the shop manager; who works which shift, the shop manager; hiring a team member, the shop manager; giving a customer a free coffee to settle a complaint, the shop manager; prices, above the shop; what is on the menu, above the shop; which charity gets the unsold food, above the shop; opening hours, above the shop. A table of measures: 12 shops an area manager looks after; 5 layers between a team member and the chief executive.

Source: Analyst

Analyse one way in which letting a shop manager decide how many of each item to make that morning might affect Pret A Manger's waste.

How did you do?

6
6 marks

Source A: Ravensworth Security Ltd

Ravensworth Security Ltd supplies security officers to shopping centres, hospitals, building sites and events across the north east of England. It has 27 contracts running at any one time, employs 320 people and had revenue of £11.8 million in the year to March 2025, with an operating profit of £386 000.

Only 112 of those 320 people have a contract that guarantees them work. The other 208 are on zero-hours contracts, and the reason is written into the way the business wins and loses work. A contract can arrive needing 22 guards at four weeks' notice, or end needing none at six weeks' notice, and Ravensworth cannot carry people it has nothing to put them on.

This winter the two happened together. In January the shopping centre that is Ravensworth's largest customer gave notice, taking 46 guards' work away. In February the company won a hospital contract needing 38 guards, but it does not start for fourteen weeks and those guards need training Ravensworth's shopping-centre team does not have.

The staff notice all of this. One guard worked 168 hours in the busiest month last year and 42 in the quietest. Ninety-four people on zero-hours contracts left during the year, most of them to jobs that told them in advance how much they would earn.

Priya Raithatha, the managing director, has told the board that the flexibility that keeps Ravensworth solvent is also what makes it difficult to keep anybody, and that the board has to decide which of the two matters more.

Source: Ravensworth Security Ltd

Appendix B: How Ravensworth's 320 staff are employed

Pie chart of staff contracts: zero-hours contracts make up 65%, full-time permanent contracts 23%, and part-time permanent contracts 12% of Ravensworth’s 320 staff.
Table of Ravensworth measures: one zero-hours guard worked 168 hours in the busiest month and 42 in the quietest; 61% want guaranteed hours, 29% prefer flexibility; 94 left and 208 can move within a week.

Source: Ravensworth Security Ltd

Analyse one way in which having 208 of its 320 staff on zero-hours contracts might affect Ravensworth Security Ltd's costs.

How did you do?

7
6 marks

Source A: Dalmuir Shipworks Ltd

Dalmuir Shipworks Ltd repairs ships and offshore vessels in three dry berths on the Clyde. The yard has been working for ninety-six years, employs 290 people and had revenue of £42.8 million in the year to March 2025, with an operating profit of £2.3 million.

Seventy-eight per cent of the workforce is in the union, which appoints six safety representatives. They stopped work twenty-three times last year. There is a written safety procedure signed off with the union, nine reportable injuries were recorded, and 435 working days were lost to injury.

Because the yard employs more than 250 people it has to publish its gender pay gap, and the figures are uncomfortable reading. Thirty-two of the 290 employees are women, which is 11%. The median hourly rate for men is £19.20 and for women £16.32. Women make up 24% of the lowest-paid quarter of employees and 2% of the highest-paid quarter. None of the fourteen supervisors is a woman, and men are far more likely than women to receive a bonus.

The commercial problem is different and just as hard. The three berths are only full three days in four. A third of the yard's revenue comes from work that arrives at short notice, which is exactly the work that needs an empty berth, and the only ways of filling the gaps are to work through the night or to stop taking short-notice jobs at all.

The board is reviewing both the pay figures and the berths this spring.

Source: Dalmuir Shipworks Ltd

Appendix C: How the yard works, and what lost time costs

Table of yard safety measures: two shifts daily; 14 supervisors, 21 employees each; 150 injury-loss days per 100 employees; a written union-signed procedure; 58% would report a near miss.

Source: Analyst

Analyse one way in which losing 435 working days to injury might affect Dalmuir Shipworks Ltd's costs.

How did you do?

1
9 marks

Source A: Beckworth Care Group

Beckworth Care Group runs six residential care homes in the north of England. It has 312 beds, 284 residents and 240 employees, and in the year to March 2025 it had revenue of £14.8 million and made an operating profit of £0.9 million.

Caring for residents is work that cannot be put off or stored up. Every shift has to be covered, and the law sets a minimum number of qualified staff for the number of residents in a home. Beckworth needs 8 400 hours of care each week across the six homes.

For three years it has struggled to fill those hours with its own staff. Pay in the sector is low, the work is demanding, and supermarkets and warehouses nearby recruit from the same towns. In the year to March 2025, 84 employees left. When Beckworth cannot fill a shift it books an agency worker instead, at roughly twice the hourly cost of its own staff. Agency workers also do not know the residents, and families have begun to comment on the number of unfamiliar faces.

Beckworth's structure has grown up without much thought. Each of the six homes has a registered manager, two deputy managers, four senior carers and then the care staff, and above the home managers sit a regional manager, an operations director and the chief executive. The chief executive, Dana Okoye, believes there are too many layers between her and the people who actually care for residents, and that decisions which should take a day take three weeks.

She has asked for a plan that would remove the deputy manager layer and widen the span of control of each home manager, moving the money saved into higher pay for care staff.

Source: Beckworth Care Group

Appendix A: Beckworth Care Group selected data, year to March 2025

Table of Beckworth Care Group data: 6 care homes, 312 beds, 284 residents, 91% occupancy, 240 employees, 84 employees left, 8,400 weekly care hours, £14.8m revenue and £0.9m operating profit.

Source: Beckworth Care Group

Appendix B: How Beckworth Care Group fills its care hours

Stacked bar chart of weekly care hours, showing agency use rising: own staff 7,644, 7,308 and 6,888 hours; agency staff 756, 1,092 and 1,512 in 2022–23 to 2024–25. Axis: 0–9,000 hours.
Tables show weekly care hours and agency spending: 2022–23, own 7,644, agency 756 (9%, £1.1m); 2023–24, 7,308, 1,092 (13%, £1.7m); 2024–25, 6,888, 1,512 (18%, £2.5m).

Source: Beckworth Care Group

Assess the impact of Beckworth Care Group's use of agency staff on its competitiveness.

Calculate Beckworth Care Group's employee turnover to support your answer.

How did you do?

2
9 marks

Source A: BT Group

BT Group is the United Kingdom's largest telecommunications company. It builds and runs the networks that carry broadband and mobile calls, and it sells services to households, businesses and government.

In May 2023 it announced one of the largest planned workforce reductions in British corporate history. By the end of the 2030 financial year it intends to remove between 40 000 and 55 000 roles, taking its global headcount from about 130 000, a figure that includes third-party contractors, down to between 75 000 and 90 000. That is a reduction of between 31% and 42%. The company set itself a target of £3 billion of annual cost savings.

The reasoning is that the work itself is changing. BT Group has spent years digging up roads to lay fibre broadband and building its 5G mobile network. Once that build is finished the business needs far fewer people to do it. At the same time the old copper telephone network and the 3G mobile network are being switched off, so the engineers who maintain them are no longer needed. Artificial intelligence is taking over more of the call handling and network fault diagnosis that used to be done by people, and the chief executive, Allison Kirkby, has said that advances in artificial intelligence will probably deepen the cuts rather than soften them.

The plan is not simply about having fewer people. BT Group needs many more people who can write software, work with data and build artificial intelligence systems, and far fewer who can splice a copper cable. Those are not the same people, and the company cannot buy all the new skills it needs on the open market.

Its structure is also under review. Decisions that affect customers currently pass through several layers of management, and the company has said it wants to be simpler and faster.

Source: BT Group announcements, 2023 to 2026

Appendix A: BT Group's workforce plan

Table of BT Group workforce-plan measures: 2023 headcount about 130,000 including contractors; 2030 headcount 75,000–90,000; 40,000–55,000 roles removed; reduction 31%–42%; £3 billion annual savings target.

Source: BT Group

Appendix B: BT Group employees by type of work

Bar chart comparing employees now with planned 2030 numbers: network build 34,000→11,000; copper 21,000→3,000; customer service 29,000→14,000; engineering 18,000→16,000; software and AI 9,000→18,000; head office 19,000→13,000.
Table: BT employees now and planned for 2030: network build 34,000/11,000; copper 21,000/3,000; customer service 29,000/14,000; engineering 18,000/16,000; software/AI 9,000/18,000; head office 19,000/13,000; total 130,000/75,000.

Source: Analyst

Assess the impact of BT Group's workforce plan on its ability to serve its customers well.

Calculate BT Group's employee turnover over the plan period, if headcount falls to 75 000, to support your answer.

How did you do?

3
9 marks

Source A: Pennine Transit Ltd

Pennine Transit Ltd runs local bus services across three Yorkshire towns under contract to the local transport authority. It employs 210 drivers and 38 engineers, cleaners and office staff. In the year to March 2025 it had revenue of £14.6 million and an operating profit of £520 000.

Drivers at Pennine are not all on the same terms. Anyone hired before 2021 is on what everybody calls the old contract: £16.00 an hour, 28 days of holiday and company sick pay from the first day. Anyone hired since is on the new contract: £13.60 an hour, 20 days of holiday and no company sick pay. The two sets of drivers do exactly the same job, often on the same route on the same day, and they know what each other earns.

There are now 94 drivers on the old contract and 116 on the new one. There are also 23 vacancies the company cannot fill, and services are cancelled most weeks because nobody is available to drive them.

In January the drivers asked the company to recognise the union Unite so that pay could be negotiated for everyone at once. The managing director, Gareth Whitcombe, refused, saying Pennine had always dealt with its drivers directly and that a union would make the business slower to respond. The drivers balloted anyway. On a 79% turnout, 71% voted for recognition.

Mr Whitcombe has not changed his position publicly, but he has asked for costings on closing the gap between the two contracts.

Source: Pennine Transit Ltd

Appendix A: Pennine Transit Ltd selected data, year to March 2025

Table of Pennine Transit Ltd data: 210 drivers, 38 other employees, 94 old-contract and 116 new-contract drivers, 23 vacancies, 1,800 annual hours per full-time driver, £14.6m revenue, £520,000 operating profit and 34 weekly cancellations.

Source: Pennine Transit Ltd

Appendix C: The union recognition dispute

Timeline table of the driver contract and union dispute: 2021, lower terms introduced; 2023 to 2025, vacancies rise from 4 to 23; January 2026, drivers seek Unite recognition, which the managing director refuses; February, drivers ballot, with 79% turnout and 71% voting for recognition; March, costings requested.

Source: Pennine Transit Ltd and Unite

Assess the impact of the driver shortage on Pennine Transit Ltd's ability to meet its contract with the local transport authority.

How did you do?

4
9 marks

Source A: Northvale Logistics Ltd

Northvale Logistics Ltd moves chilled and ambient food between farms, packhouses and supermarket depots across the north of England. It runs 92 lorries from two yards near Wakefield, employs 175 people and had revenue of £18.4 million in the year to March 2025, with an operating profit of £742 000.

Its problem is people, not vehicles. Northvale has 23 driver vacancies it cannot fill. In a bad week eleven lorries stand in the yard because nobody is licensed to drive them, and the work is passed to a subcontractor at a rate that leaves Northvale with nothing. The average driver is 51 years old and well over a third are past 55, so the gap widens every year even when nobody resigns.

The structure has not kept up either. There are only three levels between the managing director and the cab: one operations director, six supervisors, and the drivers. Each supervisor therefore looks after a large team spread across a region, most of whom they see for a few minutes a day at a weighbridge. Two supervisors have asked for help and one has gone off sick.

Olu Adeyemi, the operations director, has told the board that Northvale must decide whether to train its own drivers or outbid everyone else for the ones who are already qualified. Either way, she has said, the company cannot go on running a fleet it has nobody to drive.

Source: Northvale Logistics Ltd

Appendix A: Northvale Logistics Ltd selected data, year to March 2025

Table of selected data: employees 175; drivers 132; supervisors 6; drivers per supervisor 22; lorries 92; vacancies 23; average age 51; over-55 share 38%; revenue £18.4m; operating profit £742 000.

Source: Northvale Logistics Ltd

Appendix B: How Northvale's 132 drivers are spread across the six supervisors

Bar chart of drivers in six supervisors’ teams: Team 1, 18; Team 2, 20; Team 3, 21; Team 4, 23; Team 5, 24; Team 6, 26. Vertical axis: drivers, 0 to 30.
Table: drivers per supervisor are Team 1 18, Team 2 20, Team 3 21, Team 4 23, Team 5 24 and Team 6 26 (total 132). Measures: 3 management levels, 4 minutes per driver daily, 2 supervisors seeking help, 1 off sick, no written job description.

Source: Northvale Logistics Ltd

Assess whether Northvale Logistics Ltd's supervisors are being asked to manage too many drivers.

Calculate Northvale Logistics Ltd's operating profit margin to support your answer.

How did you do?

5
9 marks

Source A: Caledon Rail Services Ltd

Caledon Rail Services Ltd maintains track, signalling cabling and lineside structures under nine contracts across central Scotland. It employs 260 people, had revenue of £31.4 million in the year to March 2025 and an operating profit of £1.18 million.

Of those 260, 196 work trackside, mostly at night and in all weathers. The other 64 are managers and office staff. The median trackside wage is £34 600 and the median management salary is £52 800, so a manager earns about one and a half times what the people on the track earn.

Last September the union asked for 7.5%. Caledon offered 2.0%, explaining that its largest contract is fixed-price and runs for two more years. In November the trackside staff voted for industrial action, and in December the company improved its offer to 3.0%. Neither side moved after that, and in February there were four days of industrial action, the first in eleven years.

What the union keeps returning to is not only the percentage. The trackside rate at Caledon is below the median for the sector while the management rate is above it, and the company has no written code setting out how a dispute should be handled and no employee forum separate from the union. Everything has gone through seven meetings and a ballot.

Talks resumed in March with a conciliation service in the room, and the board has to decide what it is prepared to pay.

Source: Caledon Rail Services Ltd

Appendix A: Caledon Rail Services Ltd selected data, year to March 2025

Table of Caledon Rail Services data: 260 employees, including 196 trackside and 64 managers or office staff; revenue £31.4m; operating profit £1.18m; 84% unionised; gender pay gap reporting required; last dispute 11 years ago; 9 contracts; largest contract provides 31% of revenue.

Source: Caledon Rail Services Ltd

Appendix B: What Caledon pays, and what the dispute has cost

Bar chart comparing median pay in thousands of pounds: Caledon pays trackside staff £34.6k versus the sector’s £36.9k, while managers or office staff receive £52.8k versus £50.1k.
Table of dispute data: four days of February industrial action; cost per day £86,000; total cost shown as “?”; 91% of trackside staff took part; management pay is 1.53 times trackside pay; 41,800 overtime hours.

Source: Analyst

Assess the usefulness of the pay and dispute data in Appendices A and B to Caledon Rail Services Ltd's board.

Calculate the cost of the four days of industrial action to support your answer.

How did you do?

1
15 marks

Source A: Royal Mail

Royal Mail delivers letters and parcels to every address in the United Kingdom. It is part of International Distribution Services, which also owns the European parcel business GLS and which employed 153 552 people in 2024 and had revenue of £12 679 million. Around 85 000 of Royal Mail's people are postal delivery workers, and the business takes on about 16 000 extra temporary workers each year between late October and January to cope with the Christmas rush.

In June 2025 the company stopped being a public limited company listed on the stock market. EP Group, controlled by the Czech businessman Daniel Křetínský, completed a £3.6 billion takeover that the UK government had approved in December 2024 and that became unconditional on 30 April 2025.

Most of Royal Mail's people belong to the Communication Workers Union, and relations with that union have been difficult. Strikes ran from August to December 2022, and before the two sides returned to talks Royal Mail said it was losing up to £1 million a day. The dispute ended in July 2023 with a three-year deal worth a 10% pay increase and a £500 one-off payment, accepted by 76% of those who voted on a 67% turnout.

A second three-year deal followed on 3 July 2025: 4.2% in 2025, then increases linked to the Consumer Prices Index of at least 2% in 2026 and at least 2% in 2027, worth more than 8% in total and backdated to 1 April 2025. The company also promised no compulsory redundancies for the life of the deal.

Service quality remains a problem. In October 2025 the regulator Ofcom fined Royal Mail £21 million for missing its delivery targets in 2024/25, the third year in a row it had been fined. The fine was reduced from £30 million because the company admitted liability and settled. Royal Mail returned to profit in 2024/25, reporting £12 million.

Source: International Distribution Services, Ofcom and Communication Workers Union announcements, 2022 to 2026

Appendix B: Selected data for Royal Mail and International Distribution Services

Table: IDS had 153 552 employees and £12 679m revenue; Royal Mail had £12m profit, 85 000 delivery workers and 16 000 Christmas workers. On-time delivery: first class 77% versus 93% target; second class 92.5% versus 98.5%; Ofcom fine £21m.

Source: International Distribution Services and Ofcom

Appendix C: Pay and employee costs at Royal Mail

Royal Mail pay and employee costs table (£, 2024/25): postal worker 28 400; team leader 36 900; area manager 58 200; senior manager 112 000; chief executive 1 420 000; employee costs £5 920m; revenue £8 460m.

Source: Analyst

Appendix D: Royal Mail's delivery workforce

Line chart of Royal Mail delivery-worker employee turnover, rising each year from 9.8% in 2021/22 to 11.6% in 2022/23, 13.1% in 2023/24 and 14.2% in 2024/25.
Two tables, followed by a single measure. Employee turnover among delivery workers: 2021/22 9.8%; 2022/23 11.6%; 2023/24 13.1%; 2024/25 14.2%. How the delivery workforce is employed: permanent full-time 70 700 employees; permanent part-time 14 300 employees; temporary, at the Christmas peak only, 16 000 employees. Working days lost to absence for each employee in 2024/25: 11.4.

Source: Analyst

Royal Mail needs to reduce its employee costs.

Evaluate two ways in which Royal Mail could reduce its employee costs and recommend which one it should choose.

Calculate Royal Mail's employee costs as a percentage of its revenue in 2024/25 to support your answer.

How did you do?

2
15 marks

Source A: Castlebrook Veterinary Group

Castlebrook Veterinary Group runs seven veterinary practices across the Midlands. It employs 95 people, of whom 30 are qualified vets, and in the year to September 2025 it had revenue of £9.4 million and an operating profit of £710 000.

It did not grow by opening practices. It grew by buying them. Four of the seven were independent practices bought in the last five years, each with its own name over the door, its own way of booking appointments and its own long-standing clients. Castlebrook kept the names.

The problem is vets. There are not enough of them in the United Kingdom, and small animal practices compete for the same small pool. Six of Castlebrook's thirty vet posts are unfilled. When a practice cannot cover a day it books a locum, a self-employed vet who works for a day rate, and that day rate has risen every year. A locum does not know the animals, cannot be booked for follow-up appointments, and will not take part in the out-of-hours rota.

How much each practice decides for itself is now under review. At present each practice manager sets their own prices, chooses their own suppliers and recruits their own staff. The group's clinical director, Marcus Oyelaran, argues that this is why the group pays four different prices for the same vaccine and why recruitment takes eleven weeks. The practice managers argue that their clients came to them, not to Castlebrook, and that a practice in a market town cannot charge what one in a city suburb charges.

Source: Castlebrook Veterinary Group

Appendix A: Castlebrook Veterinary Group selected data, year to September 2025

Appendix A table: 7 practices (4 bought), 95 employees, 30 qualified vet posts (6 unfilled; share ?), 62,000 annual consultations, £9.4m revenue, £710,000 operating profit and 11-week typical vet recruitment time.

Source: Castlebrook Veterinary Group

Appendix B: How Castlebrook covers its vet rota

Line graph of locum days booked, showing a steady rise from 540 in 2022–23 to 890 in 2023–24 and 1,300 in 2024–25; the vertical axis ranges from 0 to 1,400 days.
Tables show locum days and spending rising: 540 days at £470 and £253,800 in 2022–23, to 1,300 at £620 and £806,000 in 2024–25. Average permanent vet salary £62 000, 54% repeat clients, no out-of-hours locums.

Source: Castlebrook Veterinary Group

Appendix D: Two ways of covering Castlebrook's vet rota

Consultations needed each year = 62 000

Comparison table: Option 1 has 30 vets, £69,000 salaries, £2.07m annual cost, £100,000 recruitment and £2.17m total; Option 2 has 24 vets, £62,000 salaries, 1,300 locum days at £620 and 54% repeat clients. Costs per consultation are blank.

Source: Analyst

Castlebrook Veterinary Group is considering two ways of covering its vet rota:

Option 1: raise salaries and fill all thirty posts with permanent vets

Option 2: keep using locums

Evaluate both options and recommend which one Castlebrook Veterinary Group should choose.

Calculate the cost of each consultation under Option 2 to support your answer.

How did you do?

3
15 marks

Source A: Caledon Rail Services Ltd

Caledon Rail Services Ltd maintains track, signalling cabling and lineside structures under nine contracts across central Scotland. It employs 260 people, had revenue of £31.4 million in the year to March 2025 and an operating profit of £1.18 million.

Of those 260, 196 work trackside, mostly at night and in all weathers. The other 64 are managers and office staff. The median trackside wage is £34 600 and the median management salary is £52 800, so a manager earns about one and a half times what the people on the track earn.

Last September the union asked for 7.5%. Caledon offered 2.0%, explaining that its largest contract is fixed-price and runs for two more years. In November the trackside staff voted for industrial action, and in December the company improved its offer to 3.0%. Neither side moved after that, and in February there were four days of industrial action, the first in eleven years.

What the union keeps returning to is not only the percentage. The trackside rate at Caledon is below the median for the sector while the management rate is above it, and the company has no written code setting out how a dispute should be handled and no employee forum separate from the union. Everything has gone through seven meetings and a ballot.

Talks resumed in March with a conciliation service in the room, and the board has to decide what it is prepared to pay.

Source: Caledon Rail Services Ltd

Appendix A: Caledon Rail Services Ltd selected data, year to March 2025

Table of Caledon Rail Services Ltd selected data: 260 employees; 196 trackside staff; 64 managers and office staff; revenue £31.4m; operating profit £1.18m; 84% of trackside staff in the union; the company is required to publish its gender pay gap; 11 years since the last pay dispute; 9 contracts held; 31% of revenue from the largest contract.

Source: Caledon Rail Services Ltd

Appendix B: What Caledon pays, and what the dispute has cost

Bar chart of median pay by role, in £000: trackside staff, Caledon 34.6 against a sector median of 36.9; manager or office staff, Caledon 52.8 against a sector median of 50.1. The vertical axis runs from 0 to 60, in £000.
Two tables show pay and dispute data: trackside £34.6k versus sector £36.9k; manager or office £52.8k versus £50.1k. Four action days cost £86 000 each; participation 91%, pay multiple 1.53 and overtime 41 800 hours.

Source: Analyst

Appendix C: How the dispute has run

Two tables. A timeline: in September 2024 the union asks for 7.5%, pointing to the gap with management pay; in October 2024 Caledon offers 2.0% and says its largest contract is fixed-price; in November 2024 trackside staff vote for industrial action; in December 2024 Caledon improves the offer to 3.0%; in February 2025 there are four days of industrial action, the first in eleven years; in March 2025 talks resume with a conciliation service in the room. A table of measures: turnout in the ballot 76%; 84% of those voting voted for action; 7 meetings held between the company and the union; no written code setting out how a dispute should be handled; no employee forum separate from the union; the dispute has run for 7 months.

Source: Caledon Rail Services Ltd

Evaluate two things other than pay that Caledon Rail Services Ltd could change to reduce the chance of another dispute, and recommend which one it should do first.

How did you do?