Healthcare issues, drug trials and medication never seem too far from the news headlines, so the success of a pharmaceutical firm depends not just on how well its products can prevent and cure illness, but on the company’s integrity and ethical stance. Maintaining a positive public image can be a tough challenge for organisations operating in this sector. As a result, healthcare and pharmaceuticals company Novartis is focused on doing the right thing for the right people.
Applying this strategy to its own employees, however, can present a further challenge. Despite the scientific focus of the majority of its workforce, employees in this field must also be creative and be able to come up with original ideas in order to make new medical discoveries, such as the development of Telbivudine, an antiviral drug used to treat Hepatitis B, which Novartis launched in 2006.
To help cultivate these skills, the firm has put in place a strong training and development programme. However, Jeanette Piorkowska, head of reward at Novartis, explains that after the company has invested in developing its employees, a number are lured away by its competitors. “At Novartis, we pride ourselves on developing our individuals, but when I started here I realised our competitors saw Novartis as a place for growing staff but not retaining them,” she explains.
Another challenge facing Novartis is the integration of new businesses and workforces following a series of mergers and acquisitions. Created from a merger in 1996 of Sandoz and Ciba-Geigy, Novartis went on to combine its agricultural division with that of AstraZeneca to create Syngenta in 2000. Other acquisitions have included the American Chiron Corporation in 2006.
In its most recent move, last month, Novartis signed a deal to acquire 25% of American eyecare group Alcon from Nestl». The deal also means that Novartis has the right to acquire Nestl»’s remaining 52% stake in Alcon in 2010 and 2011.
As a result of Novartis’ acquisition activity, the benefits offered across its 11 UK sites varied, so staff were not familiar with their parent company and how any changes would affect them. A major task for Piorkowska and the reward team, therefore, has been to harmonise the benefits across the company and adopt a holistic strategy through which staff become more engaged with Novartis. “We wanted to build a recognition and motivation culture so we can keep our people, not just grow them,” Piorkowska explains.
In the UK, Novartis is currently investing a great deal in its research activity and a large proportion of company finance is being pumped into this business strategy. As a result, the reward team has had to tighten its belt and devise a cost-effective benefits scheme that still has a big impact for employees.
It has already put in place a healthcare trust to provide medical cover for staff and carried out employee opinion surveys in order to ascertain what staff wanted from their employer and what would help to boost engagement. “We want all our people to be the central pillar of our organisation. They are the most costly resource but also the most valued resource,” explains Piorkowska.
Lunch talks and breakfast meetings were also held across all Novartis sites so staff could put forward their opinion. This feedback was used to shape the organisation’s engagement and motivation strategy. Employees had already been issued with total reward statements and managers had sat down with individuals to take them through these so that staff were able to give feedback from a position of knowledge.
This staff feedback has led the organisation to consider implementing a flexible benefits scheme. Novartis is currently in the process of designing a plan that it intends communicate later this year and roll out at the beginning of 2009 subject to approval.
Piorkowska explains that the benefits which could be offered through flex may include experience days, dental insurance and holiday trading among others. “We don’t want to go with what is out there in the market, we want to lead. Staff wanted things in the package that are different and unusual so the company will look to support this,” she says.
Kim Honess, head of flexible benefits consulting at Watson Wyatt, says that flex is useful tool to help to boost employee engagement following a merger as well as to help retain staff. “Flex is one of the best ways of harmonising benefits. All employees are given the same thing going forward but benefits that they had in the past can be factored in. It’s a good way of dealing with all the issues of the past that everyone can be happy with,” she explains.
How flex is communicated will be a key factor in its success, particularly given the company’s aim of harmonising benefits across all its locations. “We are having a real campaign at the moment including workshops and road shows about benefits across all 11 sites so that staff know what benefits that they have now, and how they can trade them for other benefits with the arrival of flex,” says Piorkowska.
Communication is a vital part of the reward strategy at Novartis. Piorkowska believes it has had an impact on benefits and how these are viewed by staff. “When I first came here, people were most interested in their take-home pay, but that has changed because we have communicated the total reward,” she says.
To help in this communications task Novartis has created an online reward site for staff. “We try to be fair, consistent and transparent on everything that we do,” Piorkowska explains.
She believes the developments in benefits over the last couple of years have had a positive impact on employee engagement. “Three years ago, there were employees who wanted to keep their own culture and identity, and were reluctant to become part of the Novartis Group. That has really changed,” she explains.
When working to boost employees’ interest in reward, Piorkowska believes the culture of the organisation has also played a part. As a pharmaceutical company, for example, it is deemed ethically prudent to promote healthcare and wellbeing to staff. So in 2006, it introduced a healthcare trust for all employees, who are covered at the company’s expense. Staff can then pay to cover family members if they wish.
Implementing one healthcare scheme across the whole company has proved beneficial for Novartis, and fits with its long-term aim to provide similar schemes across the organisation for all benefits. “The Novartis [healthcare] trust has been a real achievement for us and something I would like to see in other benefits arenas. If I can get to that sort of position with all our benefits, I will be happy,” says Piorkowska.
The task of harmonising benefits and implementing an overall reward strategy, however, is still very much a work in progress. Some benefits still differ between sites and the reward team is in the process of ironing out discrepancies across these.
Its car benefits, for example, were previously inconsistent. Novartis currently has approximately 800 cars in its fleet, of which 570 belong to business need users, which were offered using a variety of funding methods.
As a result, from this month, the firm will offer its company car drivers either a contract hire scheme or a cash allowance plan. With the arrival of flex next year, Novartis also plans to implement an affinity scheme, offering discounts on cars for staff.
“I want to review the fleet benefits to make [the offering] less complicated and decide which is the best strategy for each division of the firm. I want to put more value on the benefit and for people to understand what they want and get the flexibility they need. For me it is still a very old fashioned benefit and an area I want to do more work on,” explains Piorkowska.
With further changes still in the pipeline, Novartis’ reward team is set for another busy year communicating benefits, designing and planning a flex scheme when given the go ahead, and tidying up loose ends from the harmonisation process. But the changes have also brought exciting opportunities as well.
“We have come a long way, but we are still on a journey. We want to look after staff, but not patronise them by giving them what we think that they need. I want to be the best but I want to be innovative, creative, quirky and different from the rest to make our firm really stand out,” says Piorkowska EB
Novartis at a glance†
Novartis was founded in 1996 following the merger of two Swiss chemical companies, Ciba-Geigy and Sandoz.
Novartis, which means ‘new skills’ in Latin, has four business divisions: vaccines and diagnostics, pharmaceuticals, Sandoz and Consumer Health.
Its business objectives are to discover, develop and successfully market products to prevent and cure diseases, to ease suffering and to enhance the quality of peoples’ lives.
In April this year, Novartis acquired 25% of eye care group Alcon from Nestl», with the agreement that it could own up to 77% by 2011.
Novartis is now the world’s third largest pharmaceuticals company in terms of the number of products sold. The Swiss company currently employs over 81,000 members of staff in 140 countries.
In the UK, it employs approximately 3,000 employees over 11 sites with its head office in Frimley, Surrey.
The UK is a major centre for research and development, sales and marketing, and manufacturing activities.
In 2007, its worldwide year-on-year net sales across the group rose by 8% to $39.8 billion.
Jeanette Piorkowska has been head of reward at Novartis since 2005.
Like many reward professionals Piorkowska found her way into the field by chance, having started her career as an officer in the Metropolitan Police force and moving into an HR-related training role during this period. She soon discovered that HR, particularly reward, suited her personality. “I enjoy a challenge and I really enjoy getting real value out of something rather than just doing it,” she says.
From the Metropolitan Police, she moved on to become HR manager at telecommunications firm Motorola, before spending four years as European compensation and benefits manager at chemical manufacturer Rohm and Haas.
Immediately prior to taking up her role at Novartis, she spent two years as vice president – compensation at Citigroup Corporate Investment Bank.
In her current post, Piorkowska is responsible for a team of five reward professionals who manage all reward activities within Novartis.
“This job is very progressive. I really enjoy the chance to improve efficiency and productivity,” she explains.
Helping convert overtime into a retention tool
Brian Desantos, IT manager at Novartis’ head office in Frimley, has worked for the firm for seven years.
“It was not the benefits that attracted me to Novartis, but they give employees [healthy] lifestyle [options] that the firm tries to promote. Staff work hard for the firm so they try to support us,” he says.
Desantos values the organisation’s flexible working policy that enables him to convert his overtime hours into a maximum of two days off each month.
Another benefit that Desantos finds valuable for himself and his family is the peace of mind he gets from Novartis’ private healthcare trust. He also enjoys using the on-site staff gym, which is located in the head office car park.
As a parent, he appreciates the childcare voucher scheme, which is offered through a salary sacrifice arrangement. “I only recently found out that childcare vouchers can be used for after-school activities and education centres. I have older children so I was able to save a lot of money from the vouchers and they gave me quite a lot of options,” he explains.
Novartis: the benefits
• Defined benefit scheme that closed to new members in 2005.†
• Defined contribution plan into which staff must contribute 4% of salary in order to qualify for Novartis’ 8% contribution.†
• Flexible working arrangements which enable staff to bank any overtime in order to take up to two extra days off per month.†
• Home working and part-time working. Some staff work full time during the winter months and take summer weeks off.†
• Up to one year’s sabbatical after five years’ continuous service.†
• Childcare vouchers available through a salary sacrifice arrangement.†
• 25 days holiday plus eight bank holidays as standard.†
• Healthcare trust provides employer-paid medical cover for all employees. Staff can pay to add family members to their cover.†
• On-site gyms and fitness classes at some locations.†
• Employee assistance programme.
Organises events such as children’s Christmas parties and theatre trips.
From 12 May, a contract hire scheme and a cash allowance will be offered across all sites in place of the numerous previously disparate offerings.
Bonuses are based on varying objectives for different departments covering areas such as health and safety, finance, sales, and low product wastage.
If employees purchase two shares in the organisation through a share incentive plan (Sip), Novartis will provide them with one free share.