- Workforce development: Decline in employee numbers
- Short-time working: A key instrument of personnel policy in the crisis
- Almost 1,400 young people start careers
- Partial retirement and company pension plans
- Universities and graduates
- Global commitment to health and safety
- ThyssenKrupp PerspActive expanded
- Tailored and performance-related compensation systems
Employees
For our customers, suppliers and other business associates, they are the face of the Group: Almost 190,000 employees develop, produce and negotiate every day on behalf of ThyssenKrupp so that we can provide innovative products and attractive services for our customers throughout the world. Although the economic downturn made shorttime working and job cuts necessary, we were able to reduce the workforce in a socially compatible way and maintain a high level of apprenticeship training.
Workforce development: Decline in employee numbers
Against the background of the economic downturn, there was a sharp fall in employee numbers. On September 30, 2009 ThyssenKrupp had 187,495 employees worldwide, a decrease of 11,879 or 6% from the end of the previous fiscal year. With the exception of Elevator, where the headcount remained virtually unchanged, all other segments reported – in some cases significant – job cuts.
| Sept. 30, 2005 | Sept. 30, 2006 | Sept. 30, 2007 | Sept. 30, 2008 | Sept. 30, 2009 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Steel | 39,828 | 38,840 | 39,559 | 41,311 | 39,156 | |||||
| Stainless | 12,201 | 12,197 | 12,182 | 12,212 | 11,755 | |||||
| Technologies | 56,448 | 54,757 | 54,762 | 54,043 | 49,056 | |||||
| Elevator | 34,151 | 36,247 | 39,501 | 42,992 | 42,698 | |||||
| Services | 35,067 | 40,163 | 43,012 | 46,486 | 43,235 | |||||
| Corporate | 8,237 | 5,382 | 2,334 | 2,330 | 1,595 | |||||
| ThyssenKrupp Group | 185,932 | 187,586 | 191,350 | 199,374 | 187,495 |
Employees by segment
Compared with September 30, 2008 the number of employees in Germany fell by 5% to 81,229. The workforce outside Germany decreased by 7% to 106,266.
| Sept. 30, 2005 | Sept. 30, 2006 | Sept. 30, 2007 | Sept. 30, 2008 | Sept. 30, 2009 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Germany | 87,141 | 84,052 | 84,999 | 85,097 | 81,229 | |||||
| Other EU | 40,009 | 39,688 | 41,522 | 42,503 | 38,252 | |||||
| Americas | 44,346 | 46,240 | 44,228 | 47,561 | 42,897 | |||||
| Asia/Pacific | 10,369 | 11,956 | 14,890 | 17,881 | 18,481 | |||||
| Other countries | 4,067 | 5,650 | 5,711 | 6,332 | 6,636 | |||||
| World | 185,932 | 187,586 | 191,350 | 199,374 | 187,495 |
Employees by region on September 30, 2009 in %
At €9.7 billion, personnel expense in 2008/2009 was at the same level as the year before. The following graphic shows the development of personnel expense over the past five years:
Personnel expense in million €
Short-time working: A key instrument of personnel policy in the crisis
The severity of the slump in orders that impacted numerous segments of the Group at the beginning of the reporting year made it necessary for us to use human resource management tools to adjust to the new situation. Working time account balances and residual leave entitlements helped cushion underutilization in the plants. In addition, the Group subsidiaries restricted the use of temporary employees. But after the first few weeks this was no longer enough.
It is part of ThyssenKrupp's corporate culture to carry out all adjustments necessary in times of crisis with a strong sense of responsibility towards our employees. Structurally necessary personnel cutbacks are implemented in a socially compatible way. Cyclical employment problems are solved with the help of all available flexibilization measures to prevent redundancies wherever possible. Many of the Group's subsidiaries therefore introduced short-time working for their employees in the past fiscal year.
On average approx. 20,000 ThyssenKrupp employees worldwide worked short hours in 2008/2009, 7,300 of them based outside Germany. The main segment affected was Steel, where almost 8,000 employees had their working time reduced – roughly 21% of the segment's total workforce. In the Stainless segment, 1,500 employees – or over 13% of the workforce – worked short hours. At Technologies around 8,400 employees – or 17% of the workforce – had their hours reduced. In the Elevator segment only 150 employees were affected by short-time working, which is less than 1% of the workforce. In the Services segment around 1,900 employees (approx. 4% of the workforce) worked short hours in the course of the fiscal year.
Short-time working reached its peak in April 2009, when 38,000 had their hours reduced. After this we were able to reduce the number of employees on short hours. Altogether some 49,000 employees worldwide were affected by short-time working at some stage in 2008/2009.
Wherever appropriate and possible, ThyssenKrupp endeavors to use periods of short-time working to upgrade the skills of the employees affected. Despite considerable administrative hurdles, our subsidiaries have found various solutions for this. While ThyssenKrupp Steel organized thousands of training shifts with in-house trainers in April and May 2009 alone, smaller subsidiaries – for example in the Services segment – worked increasingly with external service providers. In addition, affected companies made intensive use of our Group e-learning platform to upgrade the skills of their employees.
Almost 1,400 young people start careers
By tradition ThyssenKrupp attaches great importance to giving young people the opportunity to train for skilled work. Around 170 full-time trainers and numerous training officers are helping give almost 1,400 apprentices a successful start to their careers.
For many decades our subsidiaries have trained in excess of their own needs to ensure as many young people as possible have the opportunity to complete an apprenticeship. At 6% our already high apprenticeship training rate, i.e. the ratio of the number of apprentices to the Group's overall workforce in Germany, was increased further in the past fiscal year. High-quality, practical training courses improve the employment prospects of the young people later on.
Around 80% of apprentices were offered a job with a ThyssenKrupp company on successfully completing their training. Anyone who completes an apprenticeship in the metalworking or steel industry in Germany benefits – especially in times of crisis – from the one- and two-year retention guarantees provided under the collective agreements. To honor these guarantees, companies severely impacted by underutilization need to come up with a range of creative ideas. One such idea is a pilot project – unique in Germany – being run by ThyssenKrupp Nirosta: 100 young skilled workers, for whom no work is available following the dramatic slump in orders, work short hours for one year ("zero hours"). However, rather than spend this time at home they undergo further training in the company so that they will be able to meet future challenges in the workplace.
Participation in the training pact
ThyssenKrupp continued to participate in the training pact between government and industry in 2008/2009. We created 50 additional apprenticeship places and offered over 40 initial training placements. More than 60% of the young people who have so far completed an initial training placement subsequently signed an apprenticeship contract. This success is due primarily to the intensive specialist and educational support provided by ThyssenKrupp trainers.
Partial retirement and company pension plans
Block model of partial retirement popular
In the Group, 4,170 employees were in partial retirement at the end of September 2009. Almost all of them opted for the so-called block release model – with a full-time work phase followed by a release phase. Partial retirement is as attractive for our employees as it is for our companies: It allows employees a smooth transition into retirement and also speeds up the process of change in the age and skill structure of the Group's workforce. The table below shows the number of employees in partial retirement in the individual segments:
| Working phase |
Release phase |
Total | ||||
|---|---|---|---|---|---|---|
| Steel | 1,002 | 890 | 1,892 | |||
| Stainless | 226 | 150 | 376 | |||
| Technologies | 629 | 797 | 1,426 | |||
| Elevator | 106 | 71 | 177 | |||
| Services | 119 | 116 | 235 | |||
| Corporate | 31 | 33 | 64 | |||
| Group | 2,113 | 2,057 | 4,170 |
Modern company pension plans
Employees are increasingly aware of the importance of company pension benefits. This is partly the result of numerous legislative changes introduced in recent years – including the rise in the retirement age, increased need for private pension provision and reduced benefits under the statutory pension system. At ThyssenKrupp company pension plans are a key element of compensation policy. For this reason the plans were reorganized and modernized many years ago. Today employer- and employeecontribution plans are combined, with the employee contributions qualifying for additional rewards from the employer. The employee-contribution pension plans available cover the entire spectrum of tax-deductible options. The Group's own deferred compensation plans are particularly popular. ThyssenKrupp secures the pension entitlements of its employees and pensioners in accordance with the statutory provisions and also provides additional protection for its employee-contribution pension plans.
Universities and graduates
In our university marketing activities, we intensified our contacts with students and expanded our news system for reporting on career opportunities in the Group.
Our redesigned internet careers portal provides an attractive overview of graduate entry schemes, events and development opportunities in the Group. With the help of multimedia technology, potential applicants can browse the personal reports, videos and targeted information on our website to find out about activities and jobs in the Group. The successful redesign has received international recognition. In the top career websites rankings of the market research company Potentialpark, our careers portal is currently in 4th place.
In addition, our new application management system has made a major improvement to the job application process. New functions allow applicants to submit transparent and professional applications quickly and easily online. All ThyssenKrupp companies in Germany are now making successful use of this new system.
We cultivate strong links with outstanding students through our entry programs, such as our "NEXT GENERATION" intern retention program and "YOUR INNOVATION" program for doctoral students. Under the extensive activities in place, up to 120 talented engineering and business administration students receive support and preparation for careers in our Group.
Our successful partnerships with technical universities in Germany, such as Aachen, Berlin, Bochum, Dortmund, Dresden, Freiberg and Hamburg-Harburg, and also in other countries are another channel we use to keep in close touch with promising students and advertise the full spectrum of opportunities available within the Group. As part of our unique cooperation with the university careers center for women "femtec" we support ambitious and talented female students taking degrees in engineering and science. As a direct point of contact, we not only help prepare these young people for working life and future tasks but also aim to raise enthusiasm and motivation for career opportunities in technology and engineering. For example, we organize field trips to demonstrate the full range of challenging jobs available and establish initial contacts.
Global commitment to health and safety
For ThyssenKrupp, the health and safety of employees is a key corporate objective of equal standing with product quality and business success. To continuously improve health and safety, we have combined all measures in the Groupwide "Zero accidents" initiative. A key area in 2008/2009 was the international exchange of experience with, for example, Italy, the United Kingdom, China and the USA.
As a result of our efforts to improve health and safety, the accident rate in the Group decreased again in the reporting year. The number of accidents worldwide was down by 22% from the previous year. The trend in Germany was also positive, with a 20% reduction in accidents.
However, the many successful health and safety activities have been overshadowed by a number of tragic accidents, as a result of which eight employees lost their lives in the reporting year. The Executive Board and Supervisory Board of ThyssenKrupp AG and all employees mourn the loss of these colleagues. Special sympathies go to the victims' families.
ThyssenKrupp PerspActive expanded
The motivation and skills of our managers are key to the way ThyssenKrupp is positioned in the global marketplace and the way we prepare for the challenges of the future. That is why we successfully continued and expanded our "ThyssenKrupp PerspActive" management development program in the past fiscal year.
At the heart of the program is a systematic, globally standardized assessment process. In the year under review, around 2,000 managers – representing the entire ThyssenKrupp PerspActive target group – were assessed by their supervisors for the first time on a standardized basis according to performance, potential and management competencies. The new management assessment and development system proved invaluable: Supervisors can use an intranet-based management information system that permits online assessments and supports planning of the next development steps. The increased transparency and comparability this provides enhances the Groupwide exchange of information and serves as a basis for strategic management development.
Targeted development of potential executives
The aim of sustained management development is to ensure that ThyssenKrupp continues to maintain sufficient numbers of high-quality candidates for its management teams at all levels. The identification and targeted development of potential candidates to fill key positions in the Group in the future is therefore essential. In the reporting year around 20 top potential candidates had the opportunity to participate in a discussion with three members of the Group Executive Board in the newly created "Landsberg round". In addition, the chairmen of the segment executive boards held meetings with selected candidates from other areas of the Group. The principal aim of these meetings was to strengthen communications between different areas of the Group and allow candidates and executives to get to know each other. In addition, so-called "PerspActive talents" were nominated for the first time with a view to building up a "talent pipeline" to aid the targeted fast-track development of promising talents.
Academy focuses on general management and leadership training
As part of a strategic Group initiative, the ThyssenKrupp Academy successfully strengthened the management competencies of our top executives and prepared potential executives to take on challenging duties. In 2008/2009 almost 800 executives took part in the programs, which means that since it was founded in 2006, the Academy has registered a total of around 3,200 participants. The 54 programs conducted last year focused on general management and leadership training; the Academy held a total of 2,700 participant days.
Our executives value the individual support they receive from the Academy. All program feedback reports show that in terms of quality, organization and relevance the programs meet the high demands and challenges of the executives. In addition, the Academy supports the Group in the implementation of Group strategies and associated initiatives.
The Academy responded quickly to the tightening of resources by reducing its originally planned program offering in the past fiscal year. We scaled back the frequency and length of individual programs and adjusted our course contents, learning architectures, venues and employee numbers to save costs.
In a very short time the Academy has become an important center of learning, knowledge management and networking in the Group. This path is to be continued.
Tailored and performance-related compensation systems
Attractive compensation is important for winning and motivating employees and executives. In addition to a fixed salary, which is subject to the provisions of collective or individual employment contracts, the various target groups at ThyssenKrupp receive additional performance-related compensation components. Many of the Group subsidiaries pay their employees company-related bonuses to reflect good business results. Executives and employees under individual employment contracts also receive a variable compensation component linked to their individual performance and the company's performance. Our workforces outside Germany benefit from attractive compensation systems based on local regulations.
The Mid Term Incentive plan for top executives launched in 2003 was issued again in the reporting year. The development of the stock rights issued under this plan is based on the share price and ThyssenKrupp Value Added over a three-year period.