Note 7: Employees

By focusing on the success and sustainability of our business, we’re able to attract, retain and motivate our employees. Sustainability is one of our core principles, it helps to define who we are and what we stand for.

Our talent and development programs are a vital investment in our human capital – the skills and knowledge of our employees. They’re key to ensuring that we’re equipped to drive the company’s growth and profitability.

Cultural shift and supporting initiatives

In 2019, we continued the roll-out of our people agenda and HR annual operating planning process across all businesses and functions. As part of this process, we introduced a set of strategic performance indicators for the HR function which allows us to measure the progress and impact of our key strategic initiatives.

We also implemented a new core HR system to deliver an employee experience that is more simple, reliable, engaging and empowering. In addition, to support our HR practices across the globe, we rolled out a workforce analytics tool which allows us to make better informed decisions about AkzoNobel and its people. With this foundation in place, we intend to build a data-driven culture during the coming years.

Attracting, developing and retaining talent

Our renewed employer branding campaign on social media, along with our efforts to create an outstanding candidate experience, resulted in continued recognition as a leading employer in many of our key countries, including Brazil, China, France, the Netherlands, Poland, Sweden, the UK and the US.

As part of our transition to growth-based talent management, we put significant effort into creating a sustainable leadership pipeline for critical positions to ensure business continuity. This resulted in a balanced approach to promote our future senior leaders from within the organization, while continuously enriching our pipeline from external markets. The outcome was that we filled 53% of our executive roles internally.

In 2019, overall employee turnover was 14% (2018: 14%), while the voluntary turnover was 7% (2018: 8%). The difference between our overall and voluntary turnover was mainly caused by our continued transformation journey and resulting restructuring. High potential employee turnover totaled 4% (2018: 8%), a decrease from previous years, as we expected.

Capability building to drive our 2020 ambitions

We’re focused on building the capabilities of our people in order to meet our strategic ambitions and ensure we drive a performance culture where our people learn quickly, grow and proudly deliver on their commitments. In 2019, we continued to build capabilities in our key functions through Marketing Development Centers, Site Manager Development Centers, our Emerging Leader Program and a Top Leadership Development Program.

Our people managers play a pivotal role in building a high-performance culture through effective onboarding, continuous feedback, recognition and engagement of their teams. We therefore continued our Manager Development Program to provide them with the right tools to build high-performing teams.

To ensure our entire workforce is fit for the future, we continued to update our competency frameworks for research and development, information management, sales and marketing, business services and finance, and offer access to online programs across the organization.

Human capital ambitions

 

2016

2017

2018

2019

Ambition
2020

1

2016-2017 data includes discontinued operations.

2

Top quartile.

Organizational health score

 

 

58

61

742

Female executives (in %)1

19

19

20

18

25

Increased awareness of diversity and inclusion

We are developing an increasingly engaged, diverse and capable workforce to deliver our strategy. 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.

In 2019, we established the Diversity and Inclusion (D&I) Sounding Board, with regional teams designed to address local needs. It provides thought leadership and recommendations on significant D&I issues and ensures D&I priorities and actions support – and are aligned with – the company’s overall strategy and values. As part of our commitment to foster an inclusive and respectful working environment, we launched training to increase awareness around unconscious bias in the workplace. We revitalized our efforts around facilitating diversity and inclusion networks focusing on women in the workplace and the lesbian, gay, bisexual, transgender and intersex (LGBTI+) community. We have also become a member of the Workplace Pride organization.

In order to create strong and diverse high-performing teams across the company, we implemented a global recruitment guideline for an inclusive and unbiased hiring practice of internal and external candidates.

This year, we also rolled out a global mentoring platform; a virtual place for mentors and mentees to connect and build professional relationships to advance talent in our organization.

Change management is key to a healthy organization

COO Ruud Joosten helped to unveil a powerful new mural in Australia (photo)

Our COO, Ruud Joosten, helped to unveil a powerful new mural in Australia designed to inspire young girls to use their voice. Located beside Melbourne Central Station, the artwork – created by Daiana Ingleton – was also part of the celebrations to mark the 25-year partnership between AkzoNobel and Plan International Netherlands.

The ambitious transformation journey we have embarked on is well underway. The cultural shift we aspire to – one that will make us the reference in our industry – is substantial. The right balance between performance and organizational health is an instrumental part of that journey to ensure our transformation has a lasting impact. We therefore continued to survey our organizational health in 2019 by asking all employees for their input on a quarterly basis, resulting in an OHI score of 61 (2018: 58).

In total, 85% of our employees indicated they really care about the company, while 88% are willing to put in a great deal of effort – beyond what’s normally expected – in order to help AkzoNobel be successful.

Based on insights from last year’s survey results, we developed a program for our leadership teams to support them in their transformation journey to make AkzoNobel a high-performing organization. This, along with other initiatives, has led to an increased understanding among our top management (and their respective teams) of the direction the organization has taken, which is reflected in our increased organizational health scores. We also notice a positive relation between leaders who are new in their position and the health scores in their teams – the teams of newly appointed leaders show higher health scores. The insights gained from the survey also show a need for continued focus in four specific areas: employee involvement, inspirational leaders, rewards and recognition, and talent development.

As part of our transformation journey, we need to check our progress on a regular basis. It’s therefore vital that we continue the organizational health checks. The outcomes are reflected in action plans (overall, per business and per function), and help us steer our culture and organizational change management agenda. The culture and transformation teams – supported by a network of colleagues around the world who facilitate and drive our culture and change programs in their respective areas – will assist in the roll-out of the agenda.

The indicators that fall within the scope of limited assurance of our external auditor are marked with this symbol