As at 31 March	2002 '000	2001 '000	2000 '000
UK	100.1	106.4	115.9
Non-UK	8.5	10.4	4.9
Total continuing activities	108.6	116.8	120.8
Total discontinued activities	-	20.2	16.0
Total employees	108.6	137.0	136.8

At 31 March 2002, BT employed around 108,600 people throughout the world, with 100,100 in the UK, making us one of the UK's largest employers.

The sale of the Yell directory business resulted in a reduction in BT employees of approximately 5,300 in June 2001. The demerger of mmO2 resulted in a further 15,800 people leaving the group in November 2001. The unwind of Concert is expected to lead to over 2,300 employees joining BT in the 2003 financial year.

During the 2002 financial year, as part of the continuing programme of reshaping the group, approximately 4,200 people left BT voluntarily, by leaver payments or voluntary redundancy.

Our search for new talent attracted 274 high-calibre graduates, 306 Modern Apprentices and 2,456 other new entrants. There were also 8,043 career development moves during the year.

We recognise that our people are critical to our success and believe that a reputation as a good employer helps win and retain an excellent workforce, which enhances our ability to serve our customers and generate revenues.

As part of this responsibility, we take the wellbeing of our people seriously. Stringent targets have been set for the reduction of occupational injury and ill health over the next four years and have been published in Better World, our social and environment report. These targets are aligned to, but are more challenging than, those set by the UK Government as part of its "Revitalising Health & Safety" strategy.

We recently won the Parents at Work/DTI Employer of the Year Award for our approach to helping our people balance their work and home lives. We have a wide range of options to support individuals throughout their working life, including home working, alternative attendance patterns and career breaks. In addition, we recently introduced a flexible retirement policy, giving employees greater choice about the nature and timing of their retirement.

During the year, we further developed our range of internal electronic people management systems. We have an award-winning e-human resources (HR) programme, which provides our people with an online, self-service approach to a broad range of HR products and services.

These HR services are provided to BT by e-peopleserve, our former joint venture with Accenture, under one of the biggest HR outsourcing contracts agreed to date in the UK. In February 2002, we sold our 50% interest in e-peopleserve to Accenture. A successful strategic partnership is being forged with e-peopleserve to the mutual benefit of both companies. Outsourcing HR transactions in this way, using the best technology platforms, has enabled a smaller HR team to focus more closely on its strategic agenda.

We encourage our employees to acquire shares in BT Group to enable them to share in our success. Following the introduction by the UK Government of the new tax-advantaged Share Incentive Plan, during the year we launched the BT Group Employee Share Investment Plan (the ESIP). From December 2001, we have operated the partnership shares section of the plan, which gives employees an opportunity to purchase shares in the company out of pre-tax salary.

In previous years up to and including 2001, generally we have provided free shares annually to employees through our profit sharing scheme, the BT Employee Share Ownership Scheme. Since those schemes will cease to qualify for beneficial tax treatment, an amount of £25 million has been set aside under the ESIP for the allocation to employees in 2002 of free shares, which are held in trust for a minimum of three years. For 2003, the number of free shares allocated to employees will be linked to performance measures set by the Board.

In addition, employees have the opportunity, from time to time, to buy shares at a discount under the BT Group Employee Sharesave Scheme, a savings-related share option scheme. Share options are normally exercisable on completion of a three- or five-year save-as-you-earn contract. There is a similar savings-related scheme for employees outside the UK, and an employee stock purchase plan for employees in the USA.

Most of our employees are members of the BT Pension Scheme or the BT Retirement Plan, which are both controlled by independent trustees.

The BT New Ideas scheme, under which our employees are encouraged to put forward suggestions for improvements in the company's activities, generated more than 5,000 suggestions in the year, contributing to savings estimated to be around £30 million.

We run CARE, an annual employee attitude survey, and encourage managers and their teams to put in place action plans to address the issues that it highlights. Although it was a particularly challenging year for BT people, the annual survey revealed a modest but encouraging improvement in peoples' satisfaction with BT overall and with their respective line management.

An estimated 75% of our UK employees belong to one of two main trade unions recognised by the company. We have a good record of industrial relations and continue to have constructive relations with both unions, built on partnership and mutual respect.

We are an equal opportunities employer and are committed to developing a working culture that enables all employees to make their own distinctive contribution. During the financial year, we continued to demonstrate our commitment to equal opportunities and diversity. Throughout the year, we took a number of initiatives to widen our talent pool, ensuring that we are able to meet the needs of people with disabilities, caring responsibilities and mental health issues.

We are an active member of many equal opportunity and diversity organisations, including Opportunity Now and Race for Opportunity (RFO). These organisations enable us to benchmark our practice - achieving Gold standard from Opportunity Now and being recognised as the top performing private sector organisation by RFO.

Our supplier diversity programme, which aims to aid the growth of minority business enterprises in the UK by providing business-to-business mentoring, was recognised as an example of best practice in this area. We also provide sponsorship in support of a wide variety of activities in the equality and diversity arena. For example, earlier in the financial year, we supported the BT Ethnic Multicultural Multimedia Awards (EMMA).

BT aspires to be a true learning organisation. We spend around £200 million a year on the training and development of our employees, who have access to a comprehensive portfolio of development and training options, including technical and commercial training, personal skills and management development.

We are making increasing use of the internet to deliver training and development programmes.

The BT Academy, a virtual corporate university, brings together all forms of learning, enabling BT people to access an extensive range of instructor-led and e-learning events, from short "just-in-time" training to Masters degrees. Links with professional bodies, the University for Industry (learndirect) and other learning communities help to enhance skills across the company to meet changing business needs. Our strategic imperatives are underpinned by the rapid deployment of new learning packages, using the Academy Learning System, one of the largest corporate learning management systems in Europe.