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Energized employees and performing teams

LANXESS aims to be a company whose success is driven by the personal commitment of each employee - aligning with our corporate slogan "Energizing Chemistry.” We have incorporated our values into the “Formula X” which consists of the following six principles of action seek solutions, keep it simple, take ownership, act as a team, think new and act fast. Following Formula X enables each of our employees to instill these practices in their daily work.

The central task of the Human Resources Group function is to provide the best possible support for the growth of LANXESS’s operating businesses. At the same time, global HR trends such as demographic change, globalization, the drive for agility and digitalization, and cultural and value-based transformation mean that, in many places, we have to break the mold. This is just what we have done – by successfully completing an extensive HR transformation project. In the past two years, we have not only implemented a “People Strategy” but also restructured our entire HR organization. The new organizational structure puts the focus on our business, brings our expertise into the regions with globally networked teams and offers effective services as well as global standards in a shared system landscape. In 2019, the transformation project won the renowned “HR Excellence Award” in the “Corporations: International HR Management” category.

Our “People Strategy” is based on four pillars and eight strategic action fields that clearly guide our HR work:

›› Enabling growth
With increasingly long-term and strategic workforce planning as well as a globally managed recruiting strategy, we are supporting the sustainable growth of our business in line with our corporate strategy.

›› Developing people
We pursue continuous talent management and a comprehensive training and learning concept with the aim of promoting cross-functional and cross-divisional career development, developing young talent from within our own ranks and strengthening expertise for the LANXESS organization of the future.

›› Enhancing and strengthening the HR function
We promote efficient and standardized HR processes, act as a global team with transparent structures and establish modern, digital HR systems and tools. We operate as a strategic partner for the businesses.

›› Intensifying dialog
We strengthen exchange within and outside the HR department in order to create greater transparency regarding HR products and services, to enhance the role of HR as a strategic partner and to address the needs of the various Group functions and business units in an even more targeted way.

We initiated or continued a great many projects and measures across these four pillars.

Targeted talent recruitment

Strategic recruiting remains an anchor of our human resources strategy and is critical to success and growth of LANXESS. With strong competition for talent across our core markets, and the continuing noticeable demographic challenges, we are investing in a distinctive employer brand in order to highlight the advantages of LANXESS as an employer and attract talent across a wide range of functions.

As part of our HR transformation, we have strengthened our global recruiter organization. In particular, the new software platform for recruitment and onboarding outlined above helps to make processes in connection with approaching and acquiring new employees more standardized, transparent and customer-focused. In order to approach interesting candidates in both an active and a targeted manner, we have also started building up a pool of active sourcing specialists, who will gradually replace external HR service providers. 

 Our international graduate trainee program is a fundamental tool for securing talent in Germany. Exceptionally well-qualified Master’s graduates are prepared for challenging specialist and managerial tasks and gather valuable experience abroad. In addition to an engineering orientation, LANXESS also offers attractive opportunities for economists. 

Experts from our own ranks

Professionally developing our own people has always been a high priority for us - both to secure the future of the company and as part of our social responsibility efforts. Vocational training is the foundation of our strategy to develop our own for our German sites.

In Leverkusen, we have developed a centrally-based Career Management division to support scientific, technical and commercial trainees, as well as our apprentices.

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Promoting personnel development worldwide

By continually investing in the training and further education of our employees, and by communicating clear, globally-binding values and standards, LANXESS can successfully recognize opportunities offered by changing markets.

LANXESS provides employees with a wide range of management and personnel development tools enabling and motivating them to act on the basis of values, rethink issues, develop solutions as part of a team, and implement them quickly. . With the global rollout of leadership training courses completed in 2017, we have achieved our goal of establishing our leadership principles and putting them into practice throughout the Group.

Our activities in 2019 centered on the further development of global, cross-divisional and cross-hierarchical talent programs, with which we want to retain particularly high-performing employees within our company and identify suitable successors for key positions at an early stage. In the previous year, we successfully established the new “eXplorer” program, which is aimed at employees who have the potential to develop toward major leadership roles at LANXESS in the next few years. Key “eXplorer” topics include dealing with complexity, new forms of collaboration and digital and agile leadership principles. We are now rounding off our range of Groupwide talent programs with “compass” and “navigator.”

Our commitment to increasing diversity at LANXESS is reflected in a specific target for the composition of the three talent programs. Every year, the programs’ participants should be at least 30% female and 40% non-German. 

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LANXESS

Employee commitment as a key success factor

Committed employees are the key to strong company performance, successful change and ultimately long-term corporate success. Accordingly, we pay close attention to encouraging the commitment of our employees. Good management helps here, as do personal development prospects, a high degree of flexibility in job design and company values with which our employees can identify. All these factors, among others, shape the LANXESS corporate culture, which we actively cultivate and develop with regard to the constant new challenges in our markets. An important forum for this is the annual Performance Culture Day, which in 2019 was devoted to our “Think New – Act Fast” principle. We also want to lend greater weight to the aspect of “cultural fit” when it comes to acquisitions – so a corresponding analysis will become a fixed element of the due diligence process in the future.

Regular and structured feedback is another important element of our corporate culture. To this end, we use a wide range of survey formats to allow feedback relating to the satisfaction and commitment of the various employee groups. In 2019, countries where local surveys were carried out included Brazil, France, the UK, India and Spain.

We regard the turnover rate based on voluntary resignations as a key indicator for the commitment of our employees. Our goal is to continuously keep this ratio below 3.5% until the end of 2023. In the reporting year, the global voluntary turnover rate was 3.0%, meaning that we reached our target for this year. In Germany, the rate was 1.2%. The percentage of employees who left our company of their own accord within three years of being hired stood at an average of 1.2% worldwide in 2019.

We rate our performance in relevant rankings and competitions as a further sign of our employees’ satisfaction and the attraction of LANXESS as an employer. LANXESS was named as a top employer or as an employer of choice in various countries, e. g. Brazil and China, in 2019.

Diversity as a success factor

We regard diversity as a strategic advantage. Therefore, we aim to enhance diversity at LANXESS and use its positive effects for our company and employees. An appreciative organizational culture that is open to all people – regardless of age, gender, nationality, disability or ideology – helps us to become more innovative and efficient and to attract and retain promising talents. Recognizing and appreciating diversity is therefore ingrained in our values, our guiding principles as well as our leadership principles.

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Equal Remuneration

Our remuneration policy provides fair and competitive compensation based primarily on relevant external benchmarks, level of industry experience, and overall quality of job performance regardless of the employee's gender.
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LANXESS

Overcoming demographic challenges

Two regions of commercial significance for LANXESS – Europe, especially Germany and Belgium, and the U.S. – are hit particularly hard by the problem of the increasing average age of our employees. Accordingly, competition for qualified young talent is intensifying. In the medium term, illness and retirement – both regular and early – will mean that many vacancies require filling, especially in career paths such as chemical production technician, mechanic/fitter and engineer. Against this backdrop, another 30 additional “demographic jobs” were approved in the reporting year. This means that we have so far created around 110 demographic jobs.

After two successful pilots, we also adopted our newly established, global strategic HR planning process in day-to-day business in the reporting year. The aim is to simulate the long-term staffing supply – taking into account retirements, natural turnover, etc. – and compare it against our long-term staffing requirements, taking into account the corporate strategy and technological changes. This enables us to identify staff shortages at an early stage and instigate appropriate HR measures

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Rewarding performance appropriately

In the context of the digitalization of our working world, longer working lives and shifting social trends, employees’ expectations of their employer are also constantly changing. This means that existing offerings to employees must be regularly reviewed and, if necessary, adapted to different needs.

In addition to fair monetary remuneration, flexible working conditions and benefits are becoming increasingly important. As components of total remuneration at LANXESS, they make a material contribution to the wellbeing and productivity of our workforce. It is important to us that the benefits granted support our corporate targets, values and culture and address the relevant needs of our employees. Some benefits are equally essential for all employees, such as:

  • Company pension plans and insurance benefits for financial security
  • Flexible working conditions and other offerings that support our employees’ work-life balance
  • Programs for prevention and long-term preservation of our employees’ health
  • Education and training

When designing these benefits, we often go further than the respective statutory framework. In addition, we always aim to account for individual needs and every life situation in the best possible manner.

 

Fair Remuneration and Comprehensive Benefits

LANXESS pays its employees worldwide transparent remuneration in line with market conditions that also includes a bonus system geared toward the company’s long-term success. In total, 88% of our employees worldwide receive variable remuneration.

Above the pay scale, and, in most countries, within the pay scale, we also provide a performance-related remuneration component on top of fixed pay. This is the Annual Performance Payment (APP), which goes to employees in countries that participate in this program. This bonus payment is linked to the Group’s attainment of a defined EBITDA target. Further individual targets in areas such as safety and sustainability additionally apply to top management. In 2019, we shared around €96 million of our profits for 2018 with our employees worldwide.

Furthermore, through the Individual Performance Payment (IPP), managers can also reward outstanding performance of an employee during the year promptly and with no red tape. Around €12 million was assigned for outstanding individual performance alone in fiscal year 2019 (including around €8.5 million in Germany). At present, around 79% of our employees worldwide are entitled to receive the IPP. In relation to this, they also receive a prompt assessment of their performance and their career prospects.

In addition, we offer a long-term incentive program for our managers in Germany. There are similar programs in the U.S., India and China. The Long-Term Stock Performance Plan (LTSP) 2018 2021 consists of four tranches commenced each year and tracks the performance of the LANXESS share compared with the MSCI World Chemicals Index, over a period of four years in each case. The four-year term and the potential growth in value make this program an attractive longterm incentive and retention tool. In addition, there is a new Share Ownership Guideline (SOG) for the Board of Management and our top-level managers. This guideline emphasizes trust in the strategy and long-term success of LANXESS. 99.9% of those eligible participated in the current program in 2019.

In 2019, our employees and directors held around 1% of the LANXESS shares in total in the context of participation programs.

Another core element of our offering is the company pension plan for plugging potential gaps in provision in old age. The design of the company pension plan differs from country to country depending on the state pension system. However, LANXESS’s pension commitments often go beyond what is required by law. They are funded by employer and/or employee contributions. Employees in Germany can voluntarily increase their pension and receive additional contributions from LANXESS. 76% of employees participate in the supplementary component of the current pension plan. In turn, other offerings enable a smooth transition into retirement, such as the long-term account for pay-scale employees in Germany. The participation rate here remained at a high level of around 92.4%.

Optimally balance work and life

In line with our employees’ desire for more flexible working and working-time models as well as greater transparency regarding existing options, we introduced and communicated global flexibility principles in 2018 under the heading “Xwork – Flexible Work.” On this basis, we developed specific guidelines on flexible working conditions and introduced corresponding models in a number of countries in the reporting year, for example a pilot project for flexible working hours at several U.S. sites. All measures count toward our new goal of 95% of all countries in which we operate having derived and implemented specific guidelines and/ or corresponding models for flexible working conditions from our global “Xwork” principles by the end of 2022. At the end of 2019, the coverage ratio was already 74%.

The “flexitime” model introduced in Germany in 2017 aims to enable employees in senior management to work parttime in an intelligent way. In the Flexi-95 model, the level of employment is reduced to 95% with a corres-ponding adjustment to remuneration, meaning that a full-time worker is entitled to 13 extra days off per year. All non-pay-scale employees have been able to participate in the program since 2019. At the end of fiscal year 2019, we already counted around 130 participants, of which 45 in senior management.

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Work/life balance matters to an ever-growing number of employees. A total of 7% of our employees in Germany aged between 20 and 40 were on parental leave for a time. Of this figure, 58% were fathers. 97% of the employees who ended a parental leave period in 2019 returned to a job at LANXESS, 99% of which still worked in the company at the end of 2019.

The statutory maternity rights in Germany and similar models in the European Union are by no means standard worldwide. Therefore, at our sites outside Europe, we are assessing whether we can introduce or expand country-specific models for our employees. For our employees in the U.S., for example, we approved a new paid parental leave model in the reporting year, which allows mothers and fathers to take parental leave of eight weeks on the birth or adoption of a child – while continuing to receive a full salary. The model will be implemented in 2020.

Against a backdrop of demographic change, care is a major issue in Germany. The centerpiece of the LANXESS care model is caregiver leave, which allows our employees to reduce their working hours by more than their pay during the care period and to work off the hours commensurate with the pay they received after their return. Caregiver leave and time off have been used by 109 employees in Germany since the LANXESS care model was introduced.

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Our occupational health management is based on raising all employees’ awareness of their own health and motivating them to act on their own initiative and adopt healthy behaviors in their professional and private lives.

In the context of our occupational health management, we again offered our employees at various German sites a medical check-up in 2019 – this time with a focus on catching poor posture early and preventing back complaints. Around 1,031 people took up this offer. As it proved so successful we will be offering a medical check-up again in 2020. In addition, our employees in Germany again received €200 credit for booking a wide range of health-related options on the digital platform “machtfit.” LANXESS pays 80% of the costs for each course booking until the budget is used up. Around 50% of German LANXESS employees are now registered. Up to the reporting date, a total of around 20,000 health units had been booked, with massage, fitness and yoga options proving most popular.

We also offer our employees wide-ranging measures to promote health and wellbeing at our international sites, e. g. medical check-ups, training on stress management and fitness, wellness or dietary options.

In 2019, there were no new confirmed cases of occupational illnesses at neither of our global sites. Two cases are still under review.

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Xact: Global initiative for more safety

We address the topic of occupational safety with our global safety initiative Xact. Xact pursues the goal of gradually lifting the safety culture of LANXESS to a higher level. Starting with top management, all employees are expected to work together to improve safety in the Group. We are doing this because we firmly believe that all industrial accidents are avoidable. As a specific target for occupational safety, we aim to reduce the lost time injury frequency rate (LTIFR, known as MAQ in Germany) by more than half by the end of 2025 compared to the reference year of 2016 (LTIFR of 2.0).

Indicators for the assessment of occupational safety at LANXESS are the recordable incident rate (RIR: number of incidents per 200,000 working hours that have to be reported according to the Occupational Safety and Health Administration) and the lost time injury frequency rate (LTIFR: accidents per million hours worked) for accidents with days lost. The LTIFR in 2019 was 1.6 and thus slightly higher than in the previous year. As in previous years, no fatal accidents occurred in the reporting period. The RIR, which also includes accidents with no days lost in accordance with OSHA rules, was 0.8 in 2019, and thus likewise slightly below the previous year’s level. Companies have been taking occupational safety increasingly seriously in recent years. This increased focus at all hierarchy levels has helped to continuously reduce reports of serious accidents on a lasting basis.
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Recognizing, promoting and using good ideas

With our ideas management system, we systematically promote the development and implementation of suggestions for improvement in order to keep on generating impetus for improving economic efficiency, occupational safety and environmental protection. Many good ideas were again implemented in 2019. 485 contributed to increased occupational safety, 398 to improved environmental performance.
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Engaging our partners

Dialog with chemicals social partners – trade unions and employer associations alike – as a principle of consultation in action is the global practice at LANXESS. As part of this, we also respect the freedom of association of our employees in accordance with the International Labour Organization (ILO) and the Global Compact and comply with collective bargaining agreements. We regularly seek dialog with employee representative committees in Germany, Europe and worldwide, provide information on our corporate objectives and involve employee representatives in organizational changes at an early stage.

Fair dealings with employee representatives and trade unions are also a top priority for us outside Europe. In South Africa, for instance, we comply with International Labour Organization (ILO) standards with respect to our employees’ freedom of association. This includes regular exchange between local management and trade-union representatives as well as binding, collectively agreed-upon regulations on remuneration and working conditions.
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LANXESS

Sebastian Röhrig

Head of Corporate Responsibility

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