Case Studies | Novartis Pays Social Dividends with Wages
The Challenge
Novartis needed help meeting its commitment to pay competitive and fair wages—which clearly exceed what is needed to cover basic living needs—and to provide employees with time for family, social activities and leisure. To achieve this standard established in its Corporate Citizenship policy, Novartis must pay wages that cover the market price of a basket of goods and services representing the necessities for an average worker in the countries where Novartis operates. This basket should include reasonable housing, transportation, health care, clothing, nutrition, and education for dependent children in accordance with local standards.
Our Strategy
Since 2003, we have worked with Novartis to calculate the basic needs wages for every country where the company has significant operations. These wages are then used in Novartis' Corporate Citizenship reporting process. Beyond calculating wages, BSR has also researched and implemented improvements to the calculation methodology, reached out to Novartis personnel in many different countries to check the veracity and practicality of the wages, and interviewed academics and other organizations that work on these issues.
Impact
Novartis is one of a handful of companies that has committed to paying a living wage to all of its direct employees around the world and that has taken the next, more difficult step of actually establishing a system for assuring that it meets this commitment. Since 2004, Novartis has adjusted the salaries of employees in various countries in line with BSR's living wage figures, positively impacting the lives of many workers and their families. As the living wage program evolves, it will further engage external stakeholders and other companies to not only improve its methodology and implementation, but also to raise the bar for other companies' social policy efforts.
