Case study: Procter & Gamble
Procter & Gamble employees were first encouraged to buy company shares in the US during the mid nineteenth century.
The share habit quickly spread across the Atlantic and today the vast majority of P&G’s 4,500 UK staff take advantage of a scheme under which they can spend up to 2.5% of their salary on shares with the company matching every share bought.
Andy Sharman, employee relations and talent supply leader, estimates that between 80% and 90% of employees own shares. “It’s difficult to lose out on it. If you can afford to invest then you do,” he explains.
Nine years ago, Procter & Gamble tried to encourage more interest in the scheme by granting a free share to each employee. “It’s one of our key values within the company. Share ownership is a crucial part of the benefits package,” he adds.
The company closed its final salary pension scheme to new employees two years ago and switched to a defined contribution scheme. At the same time it recognised the importance of offering impartial financial advice to staff. All employees are now offered access to one-to-one sessions with a financial adviser. If they need further sessions, they can choose whether to pay a straight fee to the adviser or pay commission on the investments they make. “We have negotiated some favourable rates of commission,” says Sharman.
Initially, the company only offered forward planning sessions with financial advisers for employees aged in their fifties but following appeals from other staff who did not wish to be excluded, the service has been extended to employees in their mid twenties upwards. “The feedback was excellent. People have the chance to think about their retirement at the earliest possible age,” he says.