Household products manufacturers

Making sure that their reward package outshines rivals’ is an all too familiar dilemma for firms making household products, says Neil Merrick

Case Studies: Procter & Gamble, Acdoco

Article in full

Like the goods they offer to their customers, organisations that produce household cleaning, soap and tissue products, come in a variety of different shapes and sizes. While the sector is dominated by a handful of large companies such as Procter & Gamble and Unilever, there are also a significant number of smaller firms with fewer than a hundred staff that have limited opportunity to expand or vary their benefits packages.

As one of the largest employers, Procter & Gamble (P&G), which produces Ariel and Bounty, does not face any specific recruitment or retention problems, but is still keen to ensure that the benefits offered to its 4,500 UK staff (about half of whom are involved in manufacturing) compare favourably with those offered by competitors.

Andy Sharman, P&G’s employee relations and talent supply leader, says: "We have not introduced any particular benefits programmes because of recruitment issues. But part of our company philosophy is to ensure that our total package, both in terms of salary and benefits, is comparable with other companies that are in the market for the same talent as we are."

In addition to its share and pension schemes, Procter & Gamble offers a private medical insurance plan under which the company matches contributions paid by employees on a 50:50 basis. Staff can choose the level of cover they wish to receive, depending on whether they want to extend it to their partner and family.

Although at present P&G does not provide childcare support, it is considering whether to offer childcare vouchers through a salary sacrifice scheme. "All of our benefits programmes are reviewed regularly to make sure they remain attractive to new employees and so that we retain those we already have. It’s particularly important as we are a build-from-within company," adds Sharman.

To encourage company loyalty, all P&G employees receive a free Christmas hamper of food and drink. And those based at the company’s headquarters in Weybridge, Surrey, can use a free mini-bus between the station and work. The firm also encourages car sharing.

Senior managers are entitled to a company vehicle, or cash option, and are eligible for cash or share bonuses according to P&G’s performance. All employees are placed in salary bands and are awarded pay rises that are partly based on individual performance.

Much of this is a world away from life at small firms, which tend to offer little beyond pay and holidays.

However Leeds-based London Oil Refining Company, which produces the Astonish range of cleaning products, gives all 60 staff the chance to join a final-salary pension plan, in addition to private medical insurance.

Some small companies, including Acdoco, make the most of their size by stressing the advantages of working for a family-owned business, even though they can’t compete with what is on offer at larger employers in the sector.

For example, employees at Unilever who are responsible for the firm’s household cleaning goods and are based in London, are encouraged to adopt a healthy lifestyle by making use of the firm’s in-house gym and yoga classes as well as hydrotherapy and massage services. Its gym was initially introduced several years ago following staff feedback around what the business could do to help improve employee health. It also subsidises many of the classes on offer and pays for personal training for some employees.

Richard Silander, head of employment policy and reward, explains this is linked to the company’s business strategy. "Part of our corporate values is vitality and we do try to extend that to the wellness of our staff."

Additionally, Unilever, which produces Domestos and Persil, provides an on-site dentist and chiropodist, and runs workshops on nutrition and healthy eating. Its emphasis on fitness and health has helped to reduce stress and absenteeism, particularly by improving the health of senior managers.

A key part of its approach to wellbeing is a strong work-life balance programme. Staff who wish to take advantage of flexible working arrangements are able to negotiate with line managers to come up with workable solutions, although some requests are obviously easier to accommodate.

The options on offer include childcare support, homeworking, job sharing, career breaks, and enhanced maternity and paternity benefits. Silander explains that offering good maternity benefits and work-life balance policies encourages more parents to return to work after having a child.

Other firms in the sector, however, focus on offering financial benefits. At Kimberley Clark, the manufacturer of Kleenex, employees can join a share scheme under which the company matches investments made by individual staff. Some employees receive performance-related pay while there are also opportunities for flexible working and employee counselling.

Reckitt Benckiser, which employs 1,200 people in the UK and manufactures Dettol and Finish, offers a defined contribution pension, private medical insurance and, for senior employees, cars. Senior staff can also take part in an executive share plan while all employees can buy shares at a 20% discount. John Beadle, director of compensation and benefits, explains that these tend to be valued by staff. "There is a pretty good take up."

Overall, Unilever’s Silander believes the majority of firms working in the sector tend to offer benefits packages on a par with one another. "We try hard, but I don’t think we’re doing anything that others aren’t doing."

Case study: Acdoco

Bolton-based Acdoco, which produces the Glo White range of soaps and detergents, prides itself on being a small, family-owned employer.

Requests for flexible working are considered sympathetically, providing they can be met without disrupting the business, and each summer the company organises an outdoor team-building event in Blackpool.

Acdoco employs about 90 staff and has grown by approximately one-quarter during the past two years. Thirty employees at management grade and above receive private medical insurance, while 10 sales staff and some senior managers are eligible for bonuses if they meet agreed targets.

Personnel manager Elizabeth Pilling says: "As we have grown in number, we have relied on a core of our staff to take on additional responsibility."

Employees who have been employed for more than 12 months have the opportunity to join a stakeholder pension scheme under which Acdoco contributes up to 5% of their salary providing the employee pays in at least 3%. About two-thirds of staff are members of the scheme. "If employees leave, they can transfer the pot of money with them," says Pilling. Staff can also opt to see a financial adviser to discuss their pension and other financial issues.

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.

Sign up to our newsletters

Receive news and guidance on a range of HR issues direct to your inbox

OptOut
This field is for validation purposes and should be left unchanged.

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.