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.
After the successful implementation of our global transformation project, we have a regionally and globally harmonized and well connected organizational structure in Human Resources. The new structure enables the Human Resources Group function to provide the best possible support for LANXESS’s operating business. In order to integrate further, since mid-2020 we have been working to make responsibilities and decision-making processes more transparent. With the ONE HR initiative, we intend not only to accelerate internal decision-making processes globally, but also to generate a shared understanding of central HR processes in the Group.
All measures in connection with our HR work serve the rigorous application of our “People Strategy,” which we check regularly for potential updates. Derived from our mission to motivate people and facilitate business growth, we adopted an updated version of the “People Strategy” in the reporting year.
Our “People Strategy” is based on four pillars.
>> 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 employees and leadership skills
Based on continuous dialog with our employees, we follow a comprehensive training and learning concept with the aim of promoting cross-functional and cross-divisional career development and strengthening the LANXESS organization of the future. The development of good leadership skills is particularly important to us, as they are a cornerstone of our corporate culture.
>> Enhancing and strengthening HR work
We promote efficient and standardized HR processes, act as a global team with transparent structures and consistently drive the digitalization of our HR systems and tools. We operate as a strategic partner for the businesses.
>> Acting as partners
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.
Against a backdrop of strong competition for talent in our core markets and the demographic challenges, we see recruitment as a strategic issue. We invest in a distinctive employer brand in order to highlight the advantages of LANXESS as a global and socially responsible employer. Our employer branding centers on authenticity and diversity. We communicate this branding via social media, where we share a mix of company, product and HR information in order to spark enthusiasm for our company among talented people from a wide range of functions.
Our global recruitment process is highly digitalized. The software platform covers all processes from digitalonboarding to the digital signing of employment contracts. Highly specialized LANXESS recruitment teams work in the U.S., China, India, Europe and Germany. The software platform helps to make processes in connection with approaching and acquiring new talent more standardized, transparent and customer-focused. In order to approach interesting candidates in both an active and a targeted manner, we also have a pool of active sourcing specialists, who will gradually replace external HR service providers. A total of 508 new employees joined the Group in the reporting year. The new employees predominantly filled technical positions.
Our international graduate trainee program is a fundamental tool for securing talent in Germany. Exceptionally well-qualified Masters' graduates are prepared for challenging specialist and managerial tasks and can gather valuable experience in Germany and abroad or in international projects. In addition to an engineering orientation, LANXESS also offers attractive opportunities for economists.
Training young people has always been hugely important to us, both in order to safeguard the company’s future and as part of our social responsibility. Vocational training is the basis of our strategy of developing specialist staff for the German sites from within our own ranks.
Only by constantly investing in training our employees and imparting clear, globally binding values and standards can we as a company keep on using the opportunities of changing markets successfully. Wide-ranging leadership and HR development tools enable and motivate our employees to act on the basis of values, rethink issues, implement them quickly and devise solutions in a team.
Our activities focus on the virtualization of the Group’s global, cross-divisional and cross- hierarchical talent programs. We thus ensure that, despite the restrictions due to the coronavirus pandemic, we can support particularly high-performing employees, retain them within our company and identify suitable successors for key positions at an early stage. While the talent programs’ study goals, key topics and study periods are to remain as unchanged as possible on the basis of the positive feedback from previous years, we have adjusted the teaching to the current challenges.
We offer "eXplorer", "compass" and "navigator" as Group-wide, cross-divisional and cross-hierarchical talent programs. Group-wide, cross-divisional and cross-hierarchical talent programs.
“eXplorer” is aimed at employees who have the potential to develop toward major leadership roles at LANXESS in the next few years. Key topics include dealing with complexity, new forms of collaboration and digital and agile leadership principles. Whereas there used to be three face-to-face modules, these have been replaced by shorter, monthly virtual meetings, which are supplemented by individual preparation and follow-up as well as experience-based learning in experimental groups.
“compass” for employees at the start of their career, offers guidance for their future career path. The format encourages practical development measures. The core element is a Development Center, which as of 2020 can be carried out entirely virtually.
The “navigator” program is aimed at managers with the potential to lead a business unit or Group function.
Committed employees are the key to strong company performance, successful change and ultimately long-term corporate success. Accordingly, we pay special attention to encouraging the commitment of our employees. Good management helps here, as do personal development propects, 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, the theme of which in 2020 was “Seek Solutions.” 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 different survey formats to allow feedback relating to the satisfaction and commitment of the various employee groups. In 2020, we asked our workforce throughout the Group how they found the working from home that was required during the pandemic. We conducted two global surveys on this in order to detect a potential change in mood. Around a third of all LANXESS employees took part in the survey.
In addition, we see the turnover rate on the basis of resignations as an important indicator of our employees’ commitment. 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 2.2%, meaning that we reached our target for this year. In Germany, the rate was 1.1%. The percentage of employees who left our company of their own accord within three years of being hired stood at an average of 0.8% worldwide.
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 2020, e.g. in Brazil and China once again. LANXESS in India was recognized by the Indian Chemicals Council for its HR management.
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.
Our remuneration policy offers fair and competitive remuneration worldwide, chiefly based on relevant external benchmarks, level of professional experience and quality of work, regardless of the gender of the employees.
The digitalization of our working world, longer working lives and societal changes also mean that our staff have different expectations of their employer. Therefore, we regularly review existing offerings to our staff and, if necessary, adapt them to altered needs and requirements.
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 promote 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 benefitsAs part of the transparent remuneration in line with market conditions, LANXESS offers its employees bonus systems geared toward the company’s long-term success. In total, 88% of LANXESS employees worldwide participate in our variable compensation systems.
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 2020, we shared around €73 million of our profits for 2019 with our employees worldwide.
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 long-term incentive and retention tool. In addition, there is a 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. 100% of those eligible participated in the current LTSP program in 2020.
Another core element ouf our offering is the company pension plan for plugging potential gaps in provision in old age. In the reporting year, we topped up the plan assets for German pension commitments by €100 million in order to further secure the company pension plan in the Group and thus the future of the employees’ pensions. The design of the company pension plan differs from country to country depending on the state pension system. 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 an additional grant from LANXESS. 75% of employees participate in the supplementary component of the current pension plan. Other offerings facilitate the 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 90%.
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 again developed specific guidelines on flexible working conditions and introduced corresponding models in a number of countries in 2020, for example at several Asian sites. All measures count toward our 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 2020, the coverage ratio was already 75%.
The "flexitime" model aims to enable employees in senior, management to work part-time in an intelligent way. In the Flexi-95 model, the level of employment is reduced to 95% with a corresponding adjustment to remuneration, meaning that a full-time worker is entitled to 13 extra days off per year. We have expanded this model so that 90% and 85% are now also possible. All nonpay- scale employees have been able to participate in the program since 2019. At the end of fiscal year 2020, there were around 180 participants, of which 56 in senior management.
Work/life balance is increasingly important. In 2020, we increased our special offers to employees regarding childcare or care for people in their households.
A total of 8% of the workforce in Germany aged between 20 and 40 were on parental leave for a time. Of this figure, 58% were fathers, 98% of the employees who ended a parental leave period in 2020 returned to a job at LANXESS, 98% of which still worked in the company at the end of 2020.
The legally defined framework for maternity rights and parental leave taken for granted 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 in the U.S., for example, we implemented a new paid parental leave model in 2020, which enables 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. We also offer a parental leave program in Brazil that goes beyond legal requirements.
In India, we have implemented a new program to promote the physical, mental, emotional and financial wellbeing of employees. For example, they were offered therapy, telephone counseling and mindfulness exercises to combat the increased stress level due to the pandemic. In China, too, a stress management program was established in response to the coronavirus pandemic.
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 2020, occupational health and safety were initially dominated above all by the coronavirus pandemic. In order to keep the infection rate in check, we established extensive distancing rules and hygieneplans throughout the Group, including specifications for the reduced capacity of offices and meeting rooms. In April and May 2020, we moved production in Germany from 8-hour shifts to 12 hour shifts. The longer shifts meant fewer changes and reduced contact in order to keep the risk of infection low. To prevent potential stress responses to the pandemic, the workforce in Germany, the U.S. and in India had the opportunity to receive psychosocial counseling.
Business trips were taken only if they were unavoidable and pre-approved on a case-by-case basis.
Unconnected to the pandemic, we offered flu vaccinations at various German sites in 2020. There was also a series of healthcare campaigns for production employees.
In addition, our employees in Germany again received €200 credit for a wide range of health-related optionson the digital platform "machfit" 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 30,000 health units had been booked, with massage, fitness and yoga options proving most popular.
We also offer our workforce 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. Arondthe world, we integrated virtual training sessions on the topic of mindfulness into our preventive measures for the first time.
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 Administration [OSHA]) and the lost time injury frequentcy rate (LTIFR: accidents per million hours worked) for accidents with days lost. The LTIFR in 2020 was 1.0, and thus significantly lower than in the previous year and already very close to ourmedium-term target of <1.0. The significant improvement in 2020 could be influenced by the effects of the coronavirus crisis. Including the Leather business unit, the LTIFR in 2020 was 1.1.
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 2020, both in continuing operations and including the Leather business unit, and thus equivalent to the previous year’s level. Companies have been taking occupational safety increasingly seriously in recent years. This sharp focus at all hierarchy levels has helped to continuously reduce reports of serious accidents on a lasting basis.
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.