The share savings programme had a positive effect on employee retention, while also increasing the sense of ownership and commitment amongst employees, reveals Mark Quick, Executive Vice President, Corporate Development at Recipharm. He gives more details to Viveka Roychowdhury on the programme which enters the sixth consecutive year this year, as well as the impact of COVID-19 and the role of company’s operations in India
What are the benefits of the share savings programme 2020 resolved in Recipharm’s AGM on May 12, 2020?
The programme aims to support employee retention and engagement by offering shared ownership to those who choose to participate. Through the scheme we aim to increase our employees’ interest in Recipharm’s operations and results, bringing both greater motivation and an increased affinity with the business. We also expect that our share savings programme will be an attractive offering to support our recruitment efforts, allowing Recipharm to attract some of the best talent in the industry.
How many, and in which years, were previously such programmes rolled out?
First introduced by the AGM in 2014, the share savings programme is now entering its sixth consecutive year with the opportunity for participation being open to all employees.
If the objective of the share savings programme is to incentivise employees to perform better and stay longer with the company, can you share statistics which support that this was the result with previous such initiatives? (How many employees or what percentage of employees opted for this scheme, how many stayed three years to get the Matching and Performance shares, etc)
Almost 1,500 employees became shareholders through the 2014-2019 programmes, with approximately 450,000 Recipharm saving shares having been purchased. This represents an average shareholding of 300 shares per employee investment, and of the 1,500 employees that joined the scheme, 1,200 remain part of the company today. In 2019, 5,000 employees were eligible to participate in the programme. Based on the current total of 1,200 employees still holding shares, this represents a participation of 24 per cent of employees.
We conduct an annual evaluation of the programme with our subsidiaries general managers to assess how well the scheme is fulfilling its objectives. In 2019 the general managers assessed that the programme had a positive effect on employee retention, while also increasing the sense of ownership and commitment amongst employees. They also concluded that the programme is a good motivator for senior executives.
What measures has the company taken to protect employees from the pandemic, while working at Recipharm to keep up the supply of medicines?
While the ongoing pandemic provides a lot of uncertainty, the safety and health of employees remains our priority. Our safety protocols have been enhanced, with additional risk assessment undertaken and the introduction of workflow adjustments to maximise social distancing. We are also currently not permitting any visitor access to our sites. We intend to keep all protocols under continuous review for the foreseeable future.
What impact will the COVID-19 pandemic have on the revenues of Recipharm for the financial year 2020?
We have not seen a decline in demand for our services and our medium to long-term outlook remains unchanged. Despite this, the situation remains unpredictable and this is something that we are continuously monitoring.
How has the company coped with the disruptions in supply of inputs and finished good to customers?
Transport disturbances and raw material supply delays caused temporary disruptions to normal operating procedures in March, as well as a temporary suspension of manufacturing. While we remain cautious, more stability was seen throughout April and May and we have not seen major disruptions to finished good supply.
Recipharm’s proprietary molecule Erdosteine is to be tested as part of COVID-19 treatment. Any update on this and other initiatives to be part of efforts to tackle COVID-19?
There are no further updates currently (on the erdosteine news. We have also commenced manufacture of our chloroquine phosphate product in order to prepare for any demand increases following ongoing clinical studies.
In the interim report of January-March 2020, CEO Thomas Eldered, mentioned, ‘Of all the geographies we operate in, I am particularly pleased with the organic growth in Italy and India where conditions have been even more challenging than elsewhere.’ Kindly elaborate giving a sense of how does India figure in Recipharm’s global operations?
India is clearly an important part of Recipharm’s operations as we have several operations there and employ 1500 people. We see a lot of potential for growth in the country with high quality people and processes. India is a key part of Recipharm’s strategy for supplying emerging markets and cost-effective development and manufacturing.