As of December 31, 2013, the LANXESS Group had a total of 17,343 employees, against 17,177 at the closing date of the prior year. This represented a slight year-on-year increase of 166 worldwide, resulting from longer-term growth and investment projects. Headcount was slightly higher during 2013 but toward the end of the year was impacted by Advance, our extensive efficiency and restructuring program that is expected to lead to headcount reductions of 1,000 employees worldwide by 2015. 14,139, or 81.5%, of our employees were men and 3,204, or 18.5%, were women. The number of employees who were non-German nationals was 9,639. In addition, we had 819 employees worldwide working on temporary employment contracts. LANXESS AG had 144 employees as of the reporting date, versus 141 the year before.

Part-time employees accounted for 7.6% of the workforce at our German core companies as of the reporting date. Individuals with severe disabilities made up 5.4% of the workforce at our German companies. In addition, we routinely award contracts to work centers for the disabled.

In the EMEA region (excluding Germany), the number of employees as of December 31, 2013 was 3,444, up from 3,442 in the previous year. In Germany, the headcount grew from 8,072 to 8,117. The number of employees in the North America region fell to 1,526, from 1,553 as of December 31, 2012, while Latin America saw its workforce shrink from 1,626 at the end of last year, to 1,560. At the reporting date, we employed 2,696 people in the Asia-Pacific region, which is 212 more than a year ago.

Personnel expenses totaled €1,339 million in fiscal 2013 (2012: €1,392 million). Wages and salaries, at €1,006 million (2012: €1,097 million), accounted for the greater part of this figure. Social security contributions were €194 million (2012: €193 million), while pension plan expenses totaled €128 million (2012: €92 million), and social assistance benefits came to €11 million (2012: €10 million).

Employees by Region
Graphic: Employees by Region
Employees by Segment
Graphic: Employees by Segment
Employees by Functional Area (Annual Average)
Graphic: Employees by Functional Area

Working conditions and HR policy

Our entrepreneurial success is fundamentally based on the performance, implementation skills and commitment of our employees. Only through their ongoing training and development – especially with regard to change and innovation – can we safeguard our ability to pursue our corporate goals and further enhance LANXESS’s competitiveness in the long term, even in a challenging business environment. By actively exercising social responsibility, providing attractive jobs in an international environment, offering performance-based, market-rate compensation, and promoting a culture that inspires diversity, leadership and openness to change, we give our employees access to career development opportunities, also outside their home countries.

In fiscal 2013, several national and international awards underscored the success of our HR policy. For the first time, we took top place in the annual sentiment survey conducted by the VAA (Association of Academic and Managerial Employees in the German Chemical Industry). In China, the CRF Institute named us China’s Top Employer for the third time, after honoring us in 2009 and 2011.

A major focus of our HR activities in the year under review was on identifying internal and external drivers of change for which we could define strategically coherent responses for global application throughout the organization. The areas of activity include quality management, leadership and dialogue, diversity and inclusion, organizational consulting and change management.

In addition to developing and implementing innovative concepts for addressing the challenges resulting from demographic change, our top long-term strategic human resources goal is to attract and cultivate a range of talented employees for LANXESS. We aim to strengthen our diversity, particularly in terms of age, national origin and gender, and have made this the focus of our Board of Management’s Diversity & Inclusion initiative. As part of this initiative, we have set a clear goal for the company: to voluntarily increase the proportion of women in middle and upper management to 20% by 2020. The figure currently stands at around 15.1%. We continually develop new tools for positioning LANXESS as an employer brand that enables us to recruit, integrate and retain talented young people and experienced professionals for the company worldwide. We involve our existing employees at numerous internal and external events to provide an authentic picture of LANXESS as an employer. Working together with our specialist departments, we have systematically expanded our network of contacts and built alliances with research institutes, colleges and universities, and student initiatives worldwide. This includes the “Germany Scholarship” program, a German government initiative. In the year under review, we again funded scholarships for a total of 50 students at eight universities.

Our management training programs focus on a holistic leadership approach. These programs and ILSA, our global sales academy, support the sustainable growth of our company worldwide by enhancing our organization’s productivity and openness to change.

A key pillar of our HR policy is close cooperation between employee representatives and management, including trade unions and employers’ associations, in line with the principle of active codetermination. Worldwide, 68% of our employees are covered by the terms of collective agreements; in Germany, this figure is nearly 90%.

We maintain a close dialogue with employee representative bodies in Germany, Europe and around the world to regularly discuss our corporate goals and involve these bodies in organizational change processes at an early stage. In Germany, the minimum notice period for any substantial operational changes is four weeks.

Employee compensation and benefits

We strive for a merit-based compensation system that reflects both our company’s success and employees’ individual performance. Compensation systems that include variable compensation components in addition to fixed compensation have been implemented for 88% of our employees. Our managers are able to reward outstanding employee performance quickly and unbureaucratically. In fiscal 2013, this resulted in payments of €9.1 million worldwide for outstanding individual performance.

We again offered an employee stock plan in 2013. All LANXESS Group employees in Germany were given the opportunity to buy LANXESS shares at a 50% discount. The shares were purchased at an average price of €44.59 on the Frankfurt Stock Exchange. The participation rate was 76%. At the reporting date, our employees and Board of Management members held around 1% of LANXESS shares through stock plans.

For the period 2010 to 2013, a new long-term compensation component was introduced for the Board of Management and other senior managers to replace LANXESS’s Long-Term Incentive Plan (LTIP). The Long-Term Stock Performance Plan 2010–2013 (LTSP) comprises four tranches, each lasting four years. The plan compares the performance of LANXESS stock against the Dow Jones STOXX 600 ChemicalsSM Index over a period of four years. The participation rate is 89%.

Vocational training

LANXESS has always given priority to training young people as a means of safeguarding the company’s future and as an element of our social responsibility. In 2013, we once again strengthened the marketing activities for our vocational training programs using a range of media, attended all major regional career fairs and visited schools. Through events of our own such as “NeXt Azubi” (NeXt Apprentice), we address young people with an interest in our company and give them valuable guidance for their later career choices. We again took part in Girls’ Day in 2013. In addition, our one-year orientation program XOnce provides young people with useful guidance on their way to subsequent vocational training if they are not ready to take this route at the current time.

In Germany, young people can opt to combine vocational training at LANXESS with university studies, or they can complete a traditional scientific, technical or commercial training program in our plants and departments. To ensure the long-term availability of skilled workers, we added a combined vocational training and study program in engineering sciences during the reporting period.

Across Germany, 456 young people were being trained in 19 different career paths as of the December 31, 2013 reporting date. In the previous year, we trained 386 young people in 16 different career paths. We provide solid training opportunities for significantly more young people than we need to meet our own requirements. At the start of the new training year in fall 2013, 159 young people (125 men and 34 women) began their vocational training with LANXESS. A further 18 young people have chosen our five combined vocational training and study programs. In 2013, we gave permanent and temporary positions to almost 80% of those who completed their training with us in Germany.

Each year, under the motto “Prepare for the Future,” our LANXESS international corporate trainee program attracts highly skilled university graduates. Our aim is to prepare the participants for an international career within the LANXESS Group and establish a global pool of young managers with international experience. In fiscal 2013, the focus was on controlling, finance and engineering. Since the initiative started, we have offered a wide range of entry-level trainee positions to 67 university graduates with an interest in embarking on an international career. We also offer local trainee programs in various countries such as Brazil, China, India and the United States.

Employee development

We assign great importance to motivating employees throughout their entire career to undertake continuing professional development and accept new challenges within the Group regardless of their age. To promote the talents of individual employees, LANXESS has established a systematic, multi-tiered process of global HR development conferences where future managerial employees from around the world are regularly evaluated with regard to their performance and potential.

The LANXESS Academy continued offering special modular and multi-dimensional programs to prepare trainee managers for their future tasks. In the period under review, 188 employees – 43 of them women – took part in these corporate programs. As part of our Advance efficiency program, we have consolidated the leadership seminars for our managers at various levels and introduced a novel form of training which focuses on practical leadership skills and motivation for teams undergoing change processes.

In 2013, we continued offering functional training in optimized form for our global sales employees through the LANXESS Academy. The International LANXESS Sales Academy (ILSA) is a one-year modular program designed to develop both the specialist knowledge and soft skills of our sales employees. It perfectly complements the programs already in place in the business units and countries by facilitating communication and the sharing of best practices across business units and national borders. We consider the targeted qualification of our global sales employees to be a significant success factor in the further improvement of our customer relationships. It also gives us a competitive edge in today’s global markets. To date, some 250 first-level sales employees from all over the world have participated in the program.

Occupational safety

The lost time injury frequency rate (LTIFR), known as MAQ (injuries for every million hours worked) in Germany, is the key indicator used to assess occupational safety within the LANXESS Group. In 2013, the LTIFR was 3.2, compared with 3.4 in 2012. Our analyses have shown that the number of lost days per accident has decreased significantly, which indicates a decline in the severity of accidents. This can be attributed to our employees’ raised awareness for occupational safety, which was enhanced by our stronger focus on this issue throughout 2013.

Idea management

When LANXESS employees have good ideas for improving work procedures, plants and processes, these ideas pay off. Our idea management system fosters the development, processing and implementation of suggestions for improvements to ensure that we continually receive proposals for enhancing cost-effectiveness, occupational safety and environmental protection. In 2013, employees at LANXESS’s German companies submitted a total of 3,085 new suggestions, a rate of 417 per thousand employees. In the same period, 1,306 ideas were implemented, yielding total savings of €2.4 million. As well as cutting costs, 824 of these ideas led to improvements in occupational safety and environmental protection.