Annual Report 2013

Economic report

Employees by region in 2013
At December 31, 2013
Employees by business unit
At December 31, 2013
Employees by activity
At December 31, 2013
Employees by age group
At December 31, 2013

Around 32 %
of our managers
are women.

Employees

Photo left: All people manag­ers at Henkel participated in one of around 350 workshops to discuss our new Leadership Principles. Here in Moscow, from left: Samvel Galustyan, Irina Eliseeva, Kurt Naxera, and Inna Frolovicheva.
Photo right: By the end of 2013, we had trained around 1,500 employees as “sustain­ability ambassadors” to pro­mote the topic in talks with colleagues, customers, sup­pliers, and school children. Here, Norbert Koll, President, Henkel Consumer Goods Inc., in the USA, at the Copper  Canyon Elementary School in  Scottsdale, Arizona.  

At the end of 2013, Henkel employed around 46,850 people around the world (annual average: 46,800). As part of our strategy, we have relocated business proc esses to our shared service centers and consolidated various sites. As a result, the number of employees in our mature markets declined by around 1 percent, but increased in our emerging markets. Personnel expenses were 2,570 million euros.

High-performance teams are the basis for achieving our business success. By hiring employees of diverse nationalities, genders, and ages/professional experience, we ensure that our teams are optimally aligned to our global business. At the same time, our integrated global talent management process both enables us to develop the necessary skills of our employees at an early stage and enhances our attractiveness as an employer.

This attractiveness was again confirmed in 2013, with Henkel once more performing well in numerous employer rankings, and increasingly so in important emerging markets. For example, in China we were distinguished as a top employer in the “Universum Top 100 Ranking” for the first time. The renowned CRF Institute ranked Henkel again among the very best, awarding us the title of “Top Employer in Germany,” as well as the highest possible ratingrating
Assessment of the creditworthiness of a company as published by rating agencies.
for four out of the five subcategories assessed.

To address talented potential applicants, we focus strongly on online channels – in addition to our recruiting events around the world. We intensified this focus in 2013 with a strong global presence on the important social media channels, Facebook and LinkedIn. In total, we have so far connected with 250,000 “fans” worldwide through our career pages in the social media channels, and this figure is growing rapidly, particularly in the emerging markets. Our activities have helped to position Henkel even more effectively as an employer of choice, and to attract new talent.

The “Henkel Innovation Challenge,” a successfully established innovation competition for students, is a case in point. The seventh edition of the competition kicked off under the motto “Create.Learn. Grow.” All business units take part in the student competition in 30 countries on all five continents, using a mentoring program to actively assist the participants. To supplement this, students receive early assistance through electronically assisted learning (“eLearning”) on the internet, covering topics such as marketing strategy, financial planning, and presentation techniques. The professional framework of the “Henkel Innovation Challenge” is generating a steady increase in the inflow of qualified job applications.

Attracting interested and qualified applicants to Henkel requires a professional approach to recruiting. We therefore introduced a new applicant management system in 2013 that efficiently organizes and simplifies the recruiting process. We are also expanding our use of video-based interviews and electronically supported selection procedures. These methods help us to accelerate the process while reducing travel expenses in the selection procedure. Furthermore, we ensure that our global talent management criteria are applied when hiring candidates.

In Germany, Henkel offers more than 20 apprenticeship professions, for which we again took on 167 apprentices in 2013. The new recruits also included 29 students who are taking part in our dual-track study program. Currently, 487 apprentices and students are learning a profession at Henkel. All our trainees successfully completed their final examination with the German Chamber of Commerce and Industry (IHK) or received their bachelor’s degree.

To promote optimal career development for all employees, we significantly expanded our program of globally harmonized training schemes offered by the “Henkel Global Academy” in 2013. We added new strategic and operational content and introduced additional, innovative delivery methods – particularly in the area of virtual learning.

In addition to offering training programs that are available for all employees, we cooperate with internationally renowned business schools to further develop selected executives in the areas of management and leadership. To this end, we have designed challenging content that is specifically aligned to our strategy.
High-performing, high-potential employees who have qualified for the “Executive Resource Program” once again attended selected courses at Harvard Business School in 2013. The new Leadership Principles that we introduced in 2013 were based on the project work of this group.

These Leadership Principles represent a globally uniform standard of what we expect of our people managers. The Leadership Principles are based on our vision and corporate values and contribute to the successful implementation of our Strategy 2016. In order to embed these principles worldwide, we have developed a series of interactive workshops. In around 350 workshops worldwide, a lively cross-functional exchange of experiences took place on the subject of leadership among the nearly 6,800 people managers at Henkel. Furthermore, we have consistently integrated our Leadership Principles into our performance evaluations.

An important part of our concept of leadership is pro-active planning for the next generation of executives. This is a particular challenge in the emerging markets, where rapid business growth creates especially high demand for qualified managers. To address this, we have developed a program in the Asia-Pacific region for the targeted development of selected new leadership talent. The program extends across functional areas and entails strategically relevant project assignments and work on case studies combined with training and coaching. The selected participants also receive support from our experienced executives.

Competitive remuneration is an important component of our performance culture. Our remuneration system rewards both individual achievement and corporate success. Our incentive systems play an important role in this regard. The incentives are aligned to the attainment of our medium-term financial targets. They inspire outstanding performance and vary according to individual levels of achievement. In 2012, we reviewed our global long-term incentive plan (LTI) for upper management and made adjustments in the LTI structure for the 2013 cycle. The adjustments were aimed at further strengthening the performance incentive and supporting the achievement of our financial goals. Our enhanced LTI scheme is also aligned to successfully addressing the growth in competition for management talent and keeping the turnover in executives with career potential low.

Employees1
(at December 31)2009 % 2010 % 2011 % 2012 % 2013 %
Western Europe16,25033.0 16,25034.0 15,35032.5 14,60031.3 14,40030.7
Eastern Europe8,80017.8 8,60018.0 8,85018.7 9,15019.7 9,60020.5
Africa / Middle East 5,90012.0 5,20010.9 5,30011.3 5,10011.0 4,80010.2
North America5,70011.6 5,45011.4 5,25011.1 5,20011.1 5,15011.0
Latin America4,0008.1 3,7007.7 3,7007.8 3,6507.8 3,7508.0
Asia-Pacific 8,60017.5 8,65018.0 8,80018.6 8,90019.1 9,15019.6
Total 49,250 100.0 47,850 100.0 47,250 100.0 46,600 100.0 46,850 100.0

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Diversity in our teams plays a key role in Henkel’s success, and drives our innovations and creative business processes: with over 120 nationalities, diverse skills, abilities, educational backgrounds, and experiences. We believe the global nature of our business should also be reflected in our teams. Thus the emphasis on assignments abroad remains an important component of personnel development at Henkel. Our employees gain important experience in new working environments while intercultural understanding is strengthened.

This focus on mobility at an early stage in an employee’s career also remains an important aspect in career planning for women. We remain committed to our goal, within the framework of the voluntary declaration of commitment undertaken by all DAX 30 companies, of increasing the share of women in management positions by one to two percentage points per year. In 2013, Henkel raised this figure to around 32 percent.

Furthermore, we are taking steps to improve the flexibility of working hours worldwide, and we support career paths for women. This was acknowledged, for example, in the Africa/Middle East region, where in 2013 we were named “Most Women-Friendly Employer in Middle East.” In South Korea, Henkel was distinguished as “2013 Great Place to Work for Korean Women.”

Above all, successful diversity management requires the active inclusion of all employees with their widely varied backgrounds and experiences. At Henkel this is based on a cooperative and appreciative management style. To promote this, we introduced a new training program in 2013 for all managers, which is designed to raise awareness of potential prejudices that may affect management behavior.

In addition, our global Diversity Weeks provided opportunities for an in-depth experience with diversity and sharpened awareness in this area. 100 different global, regional, and local events and activities took place in spring 2013, including discussion panels with senior management and one-day job rotations.

An integral part of our understanding of responsible behavior is our social engagement – also referred to as corporate citizenship. It encompasses support for volunteer work by our employees and retirees, social engagement by the corporation or the individual business units, as well as international disaster relief. This year again, Henkel responded quickly and unbureaucratically to provide aid in the wake of a number of natural catastrophes. For example, we sent immediate financial assistance and product donations in early summer after the floods in Germany, Austria, and the Czech Republic. Later, following the disastrous effects of Typhoon Haiyan in the Philippines in August, Henkel provided support to those affected, including Henkel employees and their families.

The social engagement of our employees is a significant success factor in the area of international corporate citizenship. The successful implementation of our sustainability strategy is also built on the involvement of all our employees. The issue of sustainability in 2013 was further addressed in our internal communications. Activities included internal rounds of talks in which senior management and employees at all levels had the opportunity to discuss sustainability in depth. The faithful integration of this topic within existing training and development programs leads to the firm establishment of the concept of sustainability in the corporation.

We also promote the involvement of our employees through our “sustainability ambassadors” program. Our ambassadors promote sustainability among colleagues, suppliers, and customers. As sustainability ambassadors, Henkel employees also inspire interest and awareness for sustainable behavior in everyday life among school children. By the end of 2013, around 1,500 employees had been trained as sustainability ambassadors.