Our employees are crucial to our success. Therefore, it is particularly important to recruit the right talent with the right capabilities at the right time to Merck, as well as to develop and retain them.
As of December 31, 2015, we had 49,613 employees worldwide (2014: 39,639). The increase in the headcount is due primarily to the integration of Sigma-Aldrich. In 2015, we were represented by a total of 211 legal entities with employees in 66 countries.
by region (Merck incl. Sigma-Aldrich)
Sigma-Aldrich became part of Merck on November 18, 2015. As we are currently in the integration process, the remaining text in this chapter refers exclusively to Merck, without Sigma-Aldrich. The Sigma-Aldrich figures that are already available can be found in the table at the end of this chapter.
As part of our Group strategy we place particular emphasis on talent development, performance management and compensation. In addition, we want to foster employee diversity in order to be optimally prepared for future global challenges. In order to support the Group strategy by providing suitable programs and initiatives, we have defined three focus areas:
The developments and the objectives achieved in these areas are presented in the following.
In a continuously changing world, qualified employees capable of innovative thinking are of tremendous importance to the success of any company. Therefore, the aim of our human resources strategy is to develop employees of all age groups and to prepare them for new challenges.
Innovation plays a particularly important role at Merck. In order to further enhance the preconditions for innovation, in 2015 we opened the modular Innovation Center in Darmstadt. This gives employees the possibility to focus on their ideas and work on projects in an environment that stimulates creativity. After all, innovation calls for innovative employees and scope for creativity. The Innovator Academy, which offers our employees various training courses, for instance on design thinking, creativity techniques and the business model canvass, is an important element of the Innovation Center. Internal project teams, start-ups and the Merck Accelerator program as well as further interested colleagues from various areas throughout Merck make extensive use of this offer.
The basic and advanced training of our employees remains a special area of focus. In 2015, we maintained a consistently high vocational training rate in Darmstadt, Merck’s largest site. More than 500 young people were enrolled in vocational training programs here in a total of 23 different occupations in 2015. Upon the successful completion of their training, we offer unlimited employment contracts to all apprentices working in occupations for which we have sustainable demand. On average, the post-apprenticeship hiring rate – taking voluntary terminations into account – was more than 90% over the past five years. We also continue to offer vocational training to a large number of young people at other sites.
“Start in die Ausbildung”, a German program to prepare young people for an apprenticeship, was continued with 20 interns, the same number as in 2014. The program is for young people between the ages of 16 and 25 who have completed secondary school without having successfully found an apprenticeship for at least one year after completing school. We promote the professional expertise of our apprentices through numerous regional and global project activities. These include supporting a center for homeless children in Kenya. We were recognized for this and other activities to promote the social skills of apprentices. At the 2015 Hermann Schmidt Award ceremony, Merck received a special prize for innovative vocational training from the German Federal Institute for Vocational Training.
Our global advanced training program ensures that all of our employees and executives around the world develop the skills that they and we need to implement our company strategy and to remain successful in the future. For instance, we offer them a range of globally aligned classroom training courses on 17 selected subjects. In 2015, more than 4,000 employees participated in these programs. Moreover, we make various e-learning and language courses as well as book summaries and development tools available to our employees. In addition, local, business, and function-related offers exist to ensure the continuous further development of our employees. Our Team Performance workshop supports the participants in improving their effectiveness and cooperation.
We also offer our top talent and senior executives a range of advanced training programs. One of the aims of the seven-month International Management Program is to promote global thinking among young talent and to strengthen their leadership competencies. Additionally, in cooperation with top international universities, the Merck University has been offering a multi-regional, modular one-year program since 1999. To date, 345 members of top management have taken part in this program. Furthermore, Merck cooperates globally with universities in order to support employees who wish to study for an Executive MBA, for instance. In 2015, we launched the Growth Markets Management program in India and Latin America for local executives. This program, which encompasses business and company-specific topics, is also offered in China and Turkey. The programs had participants from a variety of countries and regions such as Africa, the Middle East, Japan, and Russia. Globally, a total of 98 managers took part in these programs in 2015. Moreover, in 2015 the Managerial Foundation Program was conducted in 15 countries with 507 participants and the Advanced Management Program was attended by 110 participants in four countries.
Through our investments in leadership quality, talent development and advanced training, we strengthened the loyalty of employees in countries with relatively high turnover rates such as China and India.
Furthering the performance culture at Merck is another focal point of our human resources work. In this context, differentiated compensation and advanced training opportunities are important incentives. In order to establish this type of culture, we consider it particularly important for managers to set an example through their attitude and behavior. Selecting and positioning the right employees, both internally and externally, are crucial here.
Our managers are expected to drive our innovative business model. They achieve this by recognizing and making use of the opportunities offered by the diverse cultures and experiences of employees. At the same time, executives are to set an example, for instance by living the company values and nurturing a feedback culture. As part of an evaluation of our leadership and business model, not only were roles adapted, but leadership was also singled out as a central topic. Therefore, in October 2015, a new strategic competency model was introduced to further develop and support our business strategy and thus the related leadership culture. The strategic competencies according to which managers and employees are to behave are purposeful, future-oriented, innovative, results-driven, collaborative, and empowering. We will use the new model to build and expand these central competencies in line with our future strategic direction.
Within the framework of the “Fit for 2018” program, we launched the capability initiative “ONE Talent Development, Rewards and Performance Management” as part of our Group strategy. The aim is to attract highly qualified graduates from around the world to Merck and to retain them.
We consider it important to identify employee potential early on and foster it on an individual basis. We want to offer our employees interesting career opportunities, continuous personal and professional development as well as prospects within the company. We are therefore continuously working to strengthen the performance and development culture within the company. Our processes are intended to support this and to ensure that internal positions are filled in an even more efficient manner. In order to achieve this, talent and performance management processes are globally aligned for all employees in accordance with the same principle and are part of a shared IT system. We systematically combine talent recognition with performance management. Regular, individualized performance evaluations make it easier to identify employees with high potential and to develop them accordingly. Clear objectives, differentiated and open feedback and individual development plans are important prerequisites for personal development, as well as for the success of the company.
In 2015, we further expanded our workforce pool to internally fill management positions when they become vacant. The vast majority of management position vacancies were also filled by internal candidates in 2015. In addition, we recruited external executives in order to add new perspectives to our long-standing in-house expertise.
Merck is using the motto “Make great things happen” to position itself in the global job market, which conveys to potential applicants a sense of what makes Merck unique: an inspiring, motivating work environment in which innovations thrive; an environment in which everyone has the opportunity to apply their ideas and engagement to benefit customers and the company, while at the same time developing themselves as employees. Further increasing Merck’s attractiveness as an employer was an important reason for the repositioning of the corporate brand in 2015. In late 2015, we started an analysis of the impact of the new corporate brand on employer branding. It is essential to harmonize employer branding and messages with the new brand in order to position Merck as an attractive and authentic employer.
In recruitment, we focus our efforts on successfully attracting talent while paying attention to costs. For this, a globally uniform and binding process was introduced. This starts with a search in the internal talent pool and an internal job posting before external channels such as job portals and recruitment agencies are utilized. On the one hand, the process offers employees better development opportunities, and on the other hand it minimizes the costs incurred during external recruitment.
In order to support executives in making hiring decisions and to establish uniform quality standards, we offer interview training courses for employees with personnel responsibility. In the courses, the participants learn proper interview behaviors, professional question techniques and how to incorporate diversity aspects into the hiring decision.
Competitive and appropriate total compensation is a core element of our attractiveness as an employer as well as motivating and retaining our employees. For this reason, several years ago we implemented global and IT-based processes and programs that help us to implement our philosophy of transparent, consistent and competitive compensation sustainably. Moreover, it is our objective to offer compensation that is both performance- and position-based in both internal and external comparisons. As a family-owned company, total compensation offered by Merck focuses not only on monetary salary components but also includes attractive non-monetary fringe benefits. Since 2015, it has been possible for individual performance to have a stronger impact on the variable bonus. In this way we create greater incentives for employees to achieve top performance, while at the same time allowing them to participate to a greater extent in the success of the company.
An open corporate culture and a diverse workforce contribute substantially to our business success. Therefore, promoting diversity and inclusion as well as making employees more willing to embrace cultural change are special areas of emphasis of our human resources work.
To us, diversity means much more than having a certain gender ratio. Therefore, as part of our strategy, we focus on topics such as internationality and demography. Diversity is not only important to us on a managerial level, but also throughout the entire workforce. Together with a culture of inclusion, diversity promotes innovation and improves team performance. One of the strategic goals is to recognize the strengths of such a diverse workforce and to appreciate individual differences. It is important to us to create an integrative work environment in which all employees have the possibility to realize their full potential. With respect to three of our six company values, namely respect, transparency and integrity, multifaceted ideas are furthered and perspectives strengthened in order to drive innovation and to add more value. By signing the Equal Opportunity Charter of the German Mining, Chemical and Energy Industrial Union (IG BCE) in 2015, we underscored our commitment to fairness and tolerance in the workplace.
In addition to the Chief Diversity Officer, who is responsible for strategically managing diversity within the company, Merck also established the Diversity Council in 2013. Its aim is to build further buy-in for diversity and inclusion within the company. The council consists of high-ranking managers from all parts of the company. In 2015, the Diversity Council worked to introduce our Diversity Framework, which bundles the diversity and inclusion strategies. It focuses on the following four topics: recruiting the right people to work for Merck, developing and retaining them, promoting efficient collaboration, driving innovations and improvements, and serving customers with diverse needs. In addition, we support specific employee networks in order to foster exchange among like-minded individuals.
In September 2015, we celebrated Global Diversity Days with a campaign entitled “It starts with YOU– Diversity & Inclusion at Merck”. The objective of this year’s initiative was to heighten awareness of diversity and inclusion among our workforce through global events. Globally, employees on five continents took part in one of 27 events.
Our goal is to anchor knowledge about our growth markets within the company. People from a total of 122 different nations work for Merck. Only 26% of our employees are German citizens, and 72.2% work outside Germany.
Women currently make up 41.3% of the workforce. Since the ratio of women to men varies widely across the different regions, businesses and functions, we have set ourselves the goal of increasing the percentage of female employees wherever they are underrepresented. Here we take into account the situation that is typical for the industry as well as regional differences.
In Germany as well as several other EU countries, Japan and the United States, we are preparing ourselves for demographic change. Since the average age of our employees in these countries is slightly more than 40, the need for urgent action does not yet exist; however, we assume that this figure will continue to rise in the coming years. While increasing automation and digitalization will certainly help to lower the burden, we are already using various programs to meet the demographic challenges in Germany. For instance, in 2015 we not only developed new shift models, but also successfully introduced preventive health measures for shift workers. Moreover, we are systematically analyzing positions at the Darmstadt site in terms of demographic suitability, and deriving measures from this analysis. The participation in a research project in 2015 focusing on “mindfulness” was a further step to sensitize the workforce to the limits of their own physical and mental resources.
We are convinced that balanced diversity among management enhances career advancement opportunities for talented employees while also helping to provide a broad experience base within the company. In addition, it allows for differentiated decision-making, thereby making a significant contribution to the success of the company.
As a global company, we consider it highly important to have an international management team. Currently, 61% of our managers – meaning positions rated Global Grade 14 and above in our Global Grading System – have a nationality other than German. Altogether, 64 different nationalities are represented in such positions.
The percentage of management positions held by women (Global Grade 14 and up) is currently 26.8% Group-wide. Certain Group functions such as IT have a lower percentage of women in management positions. However, the figures are steadily increasing across Merck as a whole. We have achieved our strategic goal of raising the percentage of management positions held by women from 25% to 30% and intend to further increase this percentage by the end of 2016. The report on stipulations to promote the proportion of women in management positions at Merck KGaA pursuant to section 76 para 4 and section 111 para 5 of the German Stock Corporation Act can be found in the Corporate Governance section of this report.
As a responsible employer, it is especially important to us to do everything in our power to prevent workplace-related illnesses and accidents. We apply the lost time injury rate (LTIR) as an indicator to determine the success of measures aimed at accident prevention as well as occupational health and safety. This key performance indicator describes the number of workplace accidents resulting in lost time of more than one day per one million working hours. In 2010, we had set ourselves the goal of reducing the lost time injury rate to 2.5 by 2015. Our future target is even more ambitious. By 2020, we intend to sustainably lower the LTIR to 1.5. The aim is to permanently stabilize or outperform this challenging figure, which we achieved for the first time in 2015.
The continuous rate of improvement in recent years can be particularly attributed to the BeSafe! program, which was launched in 2010. This is a global initiative with harmonized standards as well as local modules to meet the specific requirements at individual sites. This program focuses on engaging managers in the safety culture and making safety an intrinsic value, thus empowering our employees to take responsibility for their own safety. In 2015, we continued to sensitize our employees to workplace hazards through numerous activities and awareness campaigns.
Since 2010, Merck has been presenting the Safety Excellence Award annually in order to underscore the importance of safety. It is granted to all production sites with no workplace accidents on record for the year. In 2015, 41 out of 61 production sites were recognized.
Despite our efforts to prevent accidents, there were two workplace accidents resulting in fatalities in 2015. In the United States, an employee died in a car accident. In Germany, an employee was killed in an accident with a fork lift.
We want to help our employees achieve a good balance between their professional and personal objectives. This maintains and strengthens their motivation and performance potential, enabling them to better schedule their lives to suit their own needs.
We offer our employees in Germany and the United States various flexible working models. The mywork@Merck working model initially implemented in 2013 at the Darmstadt, Gernsheim and Grafing sites in Germany for all exempt employees aims to strengthen a culture of performance and trust within the company. Employees can choose their working hours and work location freely. Since October 2014, non-exempt employees at these sites whose positions are suitable for this working model have also been able to make use of it. In addition, mywork@Merck was also introduced for Merck Accounting Solutions & Services Europe GmbH, Merck Export GmbH, Merck Schuchardt OHG, and Merck Selbstmedikation GmbH. At the end of 2015, a total of 4,122 employees made use of mywork@Merck. Globally, 5.1% of our employees worked part-time in 2015. 10.9% of our part-time employees are men.
In addition, we offer our employees throughout Germany targeted and independent information, advice and assistance with regard to finding childcare and nursing care, as well as home and garden services. At various sites, employees benefit from childcare options that we subsidize. A daycare center with capacity for 150 children between the ages of one and twelve has been operating at the Darmstadt site for 48 years. Since 2013, the daycare center has had expanded, year-round opening hours from 6:30 a.m. to 7 p.m., needs-oriented daycare hour options of 25, 35, or 50 hours per week, as well as an adjacent new building, which is used exclusively as a nursery for up to 30 children ranging in age from one to three years. A good staff ratio, which offers parents and children reliability with respect to the number of hours of care, is particularly important to us. While their children adjust to the new environment, our employees can make use of additional offices for parents at the daycare center premises.
A dedicated workforce is crucial in order to succeed as a global company. Honest and balanced feedback from our employees is thus important to us since it reveals, among other things, the factors that influence engagement and what the organization’s strengths and weaknesses are.
In 2014 and 2015, around 20,000 of our employees from all business sectors and Group functions took part in the McKinsey Organizational Health Index (OHI) survey. Using nine health dimensions, the OHI shows in a holistic and business-oriented manner how efficient an organization is. In comparison with the more than 1,000 companies that conducted the survey, our OHI score for motivation is in the second quartile.
Although opportunities for improvement were identified, the overall results show that in comparison, our score is above-average. The consolidated OHI results were presented to our Executive Board in 2015. Work on central topics derived from the survey has already begun. The topics identified in the survey are being monitored and further pursued within the scope of employee surveys.
Additionally, Merck received an important distinction in 2015 for the innovation programs Innospire and the Innovation Cup. These were awarded the Innovation Prize of German Industry, the world’s oldest innovation award, in the innovative personnel concepts category. Innospire fosters innovative employee ideas for new businesses; the Innovation Cup is aimed at top students from around the world. A further innovation program entitled Outcubation was realized in Heidelberg to promote young talent and was published in Nature Biotechnology, a renowned journal.
|Group (Dec. 31, 2014)||Group excl. Sigma-Aldrich (Dec. 31, 2015)||Sigma-Aldrich (Dec. 31, 2015)||Group incl. Sigma-Aldrich (Dec. 31, 2015)|
|Number of employees||global, total||39,639||40,718||8,895||49,613|
|by region||Asia-Pacific (APAC)||9,488||9,839||1,257||11,096|
and Africa ( MEA )
Number of employees
( FTE s – full-time equivalents)
|by region||Asia-Pacific ( APAC )||9,474.4||9,830.4||1,237.8||11,068.2|
and Africa ( MEA )
|Number of countries in which the company has employees||66||66||34||66|
|Number of legal entities with employees||146||146||65||211|
|Number of employee nationalities||global, total||122||122||–1||–1|
|Number of employees working outside Germany||71.8 %||72.2 %||93.1 %||75.9 %|
|Percentage of women in the workforce||global, total||41.3 %||41.3 %||42.6 %||41.6 %|
|in Germany||37.5 %||37.6 %||49.0 %||38.2 %|
|Percentage of women in management positions (Global Grade 14 +)||global, total||26.3 %||26.8 %||–1||–1|
|in Germany||26.1 %||27.3 %||–1||–1|
|Percentage of managers in the workforce (Global Grade 14 +)||global, total||5.5 %||5.9 %||–1||–1|
|number of nationalities||67||64||–1||–1|
|Percentage of employees working part-time||global, total||5.2 %||5.1 %||2.6 %||4.7 %|
|of which men||10.5 %||10.9 %||15.2 %||11.3 %|
|Percentage of employees aged 0 – 29 years||global, total||14.9 %||14.4 %||19.3 %||15.2 %|
|Percentage of employees aged 30 – 49 years||global, total||64.2 %||64.3 %||54.7 %||62.6 %|
|Percentage of employees aged 50 + years||global, total||20.9 %||21.3 %||26.0 %||22.2 %|
|Average length of service in years||global, total||10.1||10.0||–1||–1|