Note 11: Our people

In the highly competitive markets in which we operate, it is our people who are the differentiating factor in ensuring our sustainable success. It is therefore our mission to create a work environment in which people feel valued, are engaged with our core principles and values and are given the right conditions in which they can perform at their best. We can only develop a high performance culture that focuses on operational excellence when all our employees are fully engaged to excel.

In 2013, we made significant progress. We embraced new values and behaviors that address habits which have held us back in the past, and support us in driving a culture of excellence in business performance and integrity. See the Strategy section for a detailed description.

In October, an awareness campaign was launched and we have taken initial steps to integrate our new values and behaviors into key HR processes – recruitment, assessment, performance management and talent development.

The new values and behaviors, and new talent management approach, strongly support the implementation of our strategy at all levels of the company, driving an engaged workforce focused on delivering leading performance.

Employee engagement

We want to be an employer of choice with an engaged workforce. Regularly measuring employee engagement helps us to manage and develop our human capital and stimulate growth through people.

We use our ViewPoint employee engagement survey to give employees the opportunity to have their say and to monitor progress. This is based on the Gallup Q12 survey and provides a comparison against nearly 500 organizations. Some 2013 highlights:

  • Almost 44,000 employees took part in the survey – 88 percent of the global workforce (2012: 88 percent)
  • Our overall engagement score improved to 3.88 on a scale from 1 to 5 (2012: 3.80), which is a step towards achieving our 2015 target of scoring above 4
  • The engagement scores for each Business Area were: Decorative Paints 3.93; Performance Coatings 3.85; Specialty Chemicals 3.87
  • Relatively high scores were achieved in the areas of commitment to quality and the feeling that opinions count. Scoring relatively low was clarity on what we expect from our employees
  • The biggest improvements came from teams that followed up their actions to improve engagement levels

ViewPoint score employee engagement (1 to 5 scale)

ViewPoint score employee engagement (1 to 5 scale) (bar chart)

Plans to remedy the gaps are already in place, including:

  • Embracing and living our company strategy through the implementation of new values and behaviors
  • Introduction of a new performance management system which includes our new values and additional functionalities to align and better track objectives, helping to further clarify expectations from our employees
  • Improving the communication from senior managers to employees by providing effective cascading tools
  • Further engaging HR business partners in coaching programs and a Community of Practice to support managers and help improve people management skills
  • Further grow and drive the global Community of Practice of engagement catalysts who influence and support people in their own environment to drive engagement
  • Assisting managers, particularly those with low scores, with follow-up action planning with their teams
  • Offering global webinars for all people managers to share best practice

In addition to actions that are taken around the ViewPoint survey, other activities are also in place that drive employee engagement:

  • Successful engagement of teams worldwide in community programs (see Note 13)
  • Onboarding program for new employees
  • Further implementation of internal social media channel (Yammer)
  • Further professionalizing Your AkzoNobel – an association of young, enthusiastic employees who have been working for the company for less than five years

Diversity and inclusion

Diversity and inclusion (D&I) at AkzoNobel is all about creating winning teams. Our D&I initiative is built around four key strategic ambitions:

  • Create a sustainable and diverse workforce
  • Build a strong and diverse leadership pipeline
  • Engage managers to build and lead diverse teams
  • Create a highly inclusive work environment

We have come a long way. Launched in 2008, our D&I ambition today is represented in various HR and business processes. We saw many positive D&I decisions in 2013 – both in business moving closer to customers and growing talents from within. Since 2008, female executives have doubled and representation of executives from high growth markets has increased by 40 percent. We achieved this by continuous application of various D&I interventions across business, function and corporate teams.

Other activities reflecting our progress made in D&I include:

  • We have extended disability reporting to regions not mandated by local regulations
  • D&I and mentoring are well represented in our Talent Management Process
  • Our recruitment policy now takes into consideration our D&I ambition
  • To build an inclusive work environment, virtual employee networks have been created
  • To increase gender diversity across AkzoNobel, we have now connected with an expert organization externally for training and skill building

As we move to the next phase of making D&I happen, our focus is primarily on diverse talent acquisition and diverse talent development. These initiatives will bring us closer to our D&I aspiration for 2015.

Female executives in %

Female executives in % (bar chart)

High growth market executives in %

High growth market executives in % (bar chart)

Talent management

In order to deliver diverse and inclusive talent development, we have integrated a new company-wide Talent Management core process (see the Strategy section). From the results of the annual ViewPoint survey, we see that we have continued to increase employee engagement scoring specifically on learning and growth. The ongoing investment in the AkzoNobel Academy, with its focus on functional excellence, has contributed to this improvement.

We continue to make progress on the representation of both females and managers from high growth markets in our executive population. The increase in executive potentials from both groups suggests that the talent pipeline is also improving. Furthermore, we continue to improve the diversity of entry level participants to our Global Graduate Management Trainee Program, which specifically aims to recruit high potential graduates in under-represented groups. After a rigorous selection process, the graduates are given special development support and the opportunity to work in three different AkzoNobel businesses before being offered a permanent position.

We have also seen an improvement in the number of cross-business moves involving leadership talent from 5 percent to 7 percent, which has been helped by the Talent Matching Forums held on a quarterly basis in our key countries.

After a dip in 2012, we saw the percentage of internal promotions to executive level increase to 75 percent, which also reflects a strengthening of our leadership pipeline. Our retention of leadership talent also remains high, with the small decline from the previous year being impacted by divestments.

Learning and development

To ensure that we attract and retain the best global talent, we need to have an excellent learning and development platform in place that is fully aligned with the company strategy and its key focus areas and processes. To that end, we offer all employees, at all levels of the organization, opportunities to develop via on-the-job learning, new challenges and assignments within their current role, as well as online development opportunities. It is also crucial that all our employees are trained in the core principles underlying the new company values – safety, integrity and sustainability.

In addition, our performance and development review process, which is applicable for all employees, ensures an ongoing focus on individual development to improve job performance.

Based on the Gallup Q12 survey our “Learning and growth” score improved to 3.93 on a scale from 1 to 5 (2012: 3.85), which is a step towards achieving our 2015 ambition of scoring above 4.

ViewPoint score on Learning and growth (Q12) (1 to 5 scale)

ViewPoint score on Learning and growth (Q12) (1 to 5 scale) (bar chart)

In 2012, we launched the AkzoNobel Academy to drive functional and operational excellence. It is now an established learning portal for all employees, enabling company-wide sustainable performance improvement. In 2013, in line with our ambition to drive functional excellence, we integrated functional capability frameworks and a structured training curriculum for key functions, as well as a continuous improvement curriculum. We also offer special training programs to enable HR professionals to better support the business, in addition to tailor-made programs for our top talent at a number of prestigious business schools.

Also in 2013, the Academy introduced a number of new development tools, including:

  • Functional frameworks defining a set of competencies – knowledge and/or skills critical for successful performance within our key global functions to deliver on the company strategy
  • Generic role profiles and a Career Navigator connected to the functional competency frameworks giving our employees an impression of the deliverables and competencies required by various key roles within AkzoNobel
  • A Development Compass which has been designed to help our employees identify any gaps between their current competencies and those required
  • The addition of new 24/7 learning resources: GetAbstract and Virtual Ashridge
  • The design of 43 new functional training courses reaching initially 10,000 employees supporting targeted capability building
  • The embedding of the “lessons learned” from performance improvement program projects in the Academy curriculum

Recruitment

The quest to attract the best talent while managing costs continued with a major remodeling of the Recruitment function. A new e-recruitment technology platform has been launched in the Netherlands, UK, US, Sweden, France, Brazil, India and China as the first module in a future Talent Management Suite. This will improve the efficiency and effectiveness of the recruiters, lead to process standardization and increase direct sourcing, so reducing costs and improving quality.

We also took a major step in utilizing social media channels by partnering with LinkedIn, which resulted in a 160 percent increase in followers of our Linkedin profile, as well as imparting training globally to our recruiters.

This will help us tap into the passive labor market, provide a platform for communicating our new Employee Value Proposition and help avoid expensive indirect channels of recruitment.

A new global on-boarding program has also been launched whereby standard tools will now be used globally to welcome new employees and enable them to integrate as quickly as possible.

Winning two awards testifies to the progress we made in 2013 in terms of developing as a leading employer. AkzoNobel China was officially certified as one of the top employers in China for exceptional employee offerings by the renowned Top Employers Institute, which annually recognizes leading employers around the world.

The company was also ranked Favorite Employer in the Netherlands among Dutch graduates. The research was conducted by Memory Magazine, the largest national students’ magazine in the Netherlands.

HR Services

For basic administration, Human Resources is implementing a standardized OneHR Services organizational and working set-up. This is initially being introduced in our nine key countries, based on three linked elements: standardized processes, executed on a standardized IT platform (myHR), by HR staff in an HR Service Center. This will enable us to provide a consistent and quality service, while reducing costs to benchmark levels. In addition, the OneHR Services project will be pivotal to removing the different systems that exist in the function today, therefore providing the foundation on which we can focus on our core challenge – putting in place a healthy talent pipeline and strong succession planning.

During 2013, OneHR Services went live in India and Brazil, while the UK prepared for implementation. Furthermore, the Integrated Talent Management Suite was launched, a new global HR IT support for core HR processes such as performance and development, learning, talent management and succession planning.