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Note 8: Employees

AkzoNobel’s sustainability agenda is integral to our employee value proposition. By focusing on the success and sustainability of the business, we attract, retain and motivate our employees. Sustainability is our core principle, defining who we are and what we stand for.

Productivity and ROI of human capital

 

2015

2016

2017

Human capital ROI ratio

1.58

1.57

1.49

Return on human capital investment (%)

54

56

53

The company’s Integrated Talent Management programs are a vital investment in our human capital – the skills and knowledge of employees – to ensure that we are equipped to drive the company’s growth and profitability.

Workforce planning

Workforce planning is a mandatory process at strategic and operational levels to develop the organization in line with the future needs of each business, and sets the basis for our budgeting, recruitment, development and talent management processes.

As part of workforce planning, we identify critical roles and focus on the succession planning of these roles to ensure business continuity. To sustain and improve our talent pipeline, we are focusing on the identification and development of our internal talent through frequent management reviews and targeted individual development plans. In 2017, internal promotions at executive level were at 74%, up from 61% the previous year.

Attracting and retaining talent

We are proud to have been externally recognized as a leading employer in many of our key countries, including Brazil, China, France, UK, the Netherlands and Sweden.

In 2017, overall employee turnover was 12% (2016: 11%), while the voluntary turnover was 6% (2016: 7%). This puts us close to the chemical industry benchmark of APQC (10% overall turnover) and the Asian benchmark (AkzoNobel 14%, compared with the 14% benchmark). High potential employee turnover totaled 5%. Although up by one percentage point from 2016, this can be seen as a positive achievement in light of the business context.

Capability building

We are focused on building the functional and leadership capabilities needed to support sustainable, profitable growth. During 2017, we identified the required competencies for our key commercial roles and simplified and updated the competency and development frameworks for Communications, Finance, Human Resources, Research, Development and Innovation and Customer Service.

Human capital ambitions

 

2014

2015

2016

2017

Ambition 2020

*

2017 engagement data covers August to December and was gathered for the first time through regular Pulse surveys instead of a single annual survey.

Employee engagement score (0 – 5 scale)

3.97

4.03

4.17

3.95*

4.20

Female executives (in %)

17

19

19

19

25

Female executive potential pool (in %)

24

25

30

28

30

Executive vacancies filled internally (in %)

68

58

61

74

70

High potential turnover (in %)

 

6

4

5

<5

Throughout 2017, around 2,000 people managers participated in the Leadership Essentials program, which develops the leadership behaviors that are incorporated in our performance management system.

Diversity and inclusion

AkzoNobel is developing an increasingly engaged, diverse and capable workforce which can deliver our vision of leading performance in the markets in which we operate. We believe it’s also important that our management teams reflect the diversity of our overall workforce, because inclusive and diverse teams are better able to understand customer needs and innovate to meet their requirements.

Diversity and inclusion principles have been embedded in our people management processes and leadership training. We continue to analyze and look to close the 8% gap between the average male and female salary at executive level. Analysis showed that only 0.3% of the 8% overall gap can be attributed to gender, while the rest of the gap can be attributed to other factors such as function, age, salary grade and country of work.

Engaged employees

In response to the change agenda in the company, we launched a continuous process for surveying employee feedback in August 2017. A random sample of employees participated in short bi-weekly surveys. These regular “Pulse” surveys are helping management respond more quickly to employee needs during this period of transition.

The Pulse results for August to December 2017 show strong adherence to our core principles, a commitment to deliver quality and strong relationships at work. In view of the significant organizational changes we experienced, employees also expressed a sense of uncertainty and concerns about job security. Our leadership development curriculum has been adjusted to enable managers to provide stronger change leadership by acknowledging uncertainties and engaging with individuals about their development needs.

Restructuring and separation

We continued to restructure our business in 2017 to align with our company strategy. The primary focus was on the further implementation of our organization and creating two focused, high performing businesses. As part of the change process, we use employee and customer sounding boards to gather feedback from the organization and our internal customers.

GBS

Global Business Services, which covers functional support activities such as Human Resources, Finance and Information Management, as well as non-product related Procurement.