Employees

Employee numbers at WACKER declined in 2009. As per the closing date (December 31, 2009), the Group had 15,618 employees worldwide (December 31, 2008: 15,922) – a drop of 1.9% compared to 2008. Short-time work and job cuts were necessary to counter the economic downturn. Employment contracts with temporary external staff were not extended, only some limited-term employees were kept on, and there were job cuts at Siltronic and WACKER SILICONES. Our measures included natural fluctuation and the relocation of employees to other parts of the company, such as WACKER POLYSILICON, where growth is dynamic. Moreover, we are increasingly offering employees phased early retirement.

Personnel expenses rose slightly to a total of €1.09 billion, up 0.4% year over year (2008: €1.09 billion). These expenses included outlays for social benefits and the company pension plan amounting to €236.3 million (2008: €220.8 million). Personnel expenses fell, however, when adjusted for non-recurring items of €108 million – comprising provisions for additional phased-early-retirement quotas and working-life accounts, as well as for other personnel measures and pensions (due to a mortality-table realignment).

Economic Downturn Countered via Short-Time Work and Job Cuts

In 2009, we also implemented a series of cost-saving measures. For example, we introduced short-time work at German sites for limited periods. Additionally, the Executive Board and employee representatives agreed on initially paying only 50% of 2008’s profit-sharing amount to employees on the standard and above-standard pay scales, and only 50% of 2008’s bonuses to the Executive Board and executive personnel. In the case of the Executive Board and upper management, regular compensation was temporarily reduced as of May 2009. Plus, WACKER did not give above-standard-pay-scale employees a planned 3.3% base salary increase that would have taken effect on July 1, 2009. As for executive personnel, a salary increase of 3.0% for value preservation purposes was suspended. Since business turned around during the year under review, WACKER paid out employees’ retained compensation components in November 2009, with the exception of the 50% profit-sharing amount still due for 2008.

In addition to their fixed base salary (which includes vacation and Christmas bonuses), WACKER employees receive variable compensation – a voluntary payment to employees on the standard and above-standard pay scales. It consists of profit-sharing and a salary component based on personal performance. Due to the economic downturn, the Executive Board and employee representatives have agreed to suspend performance-based compensation components for 2009. Profit-sharing for 2009 has also been suspended. Since demand for chemical products began to rebound in April 2009, the company is granting its chemical-division employees a lump sum totaling 3.75% of their fixed annual salary.

In 2009, WACKER implemented phase 2 of the collective agreement concluded in April 2008 by Germany’s chemical employer association and IG BCE industrial union. For this 12-month phase, we raised standard-pay-scale employees’ salaries by 3.3% effective May 1, 2009.

11,925 WACKER employees (76.4%) work in Germany and 3,693 employees (23.6%) elsewhere in the world.

As a manufacturing company, WACKER has a large contingent of industrial employees (56.0%) – about an eighth of whom are women (12.2%).

WACKER has always prioritized vocational training and, despite the financial crisis, we have kept youth training programs at a high level. In 2009, 201 young people began their training at WACKER or at the Burghausen Vocational Training Center (BBiW). In total, the company employed 665 trainees, 22 more than a year earlier (2008: 643). Of these, 575 are in scientific and technical disciplines and 90 in business-related fields. At 5.3%, the percentage of trainees (number of trainees to Group employees in Germany) remains high (2008: 5.0%). After graduating, trainees have a good chance of receiving a full-time position. Despite our extensive cost-savings program, we offered permanent jobs to most of our suitable and interested trainees. Other trainees received temporary positions for at least six months. In total, 159 were kept on. Established by WACKER as a public foundation, the BBiW also trains people from some 30 partner companies. In 2009, 57 trainees from these companies started courses at the BBiW.

Number of Trainees Grows Once Again

To recruit young management talent, WACKER runs a General Management Trainee Program for university graduates. In 2009, five graduates participated in the 18-month program. Due to the economic situation, Siltronic has suspended its trainee program. The eight Siltronic trainees who enrolled the previous year were given permanent positions within the WACKER Group.

It is important that WACKER employees continuously expand their expertise. So, tailored training is needed to promote strengths and provide skills for specialist jobs. At WACKER, training courses are geared to specific target groups and to developing specific strengths. At performance reviews, held at least once a year, employees and supervisors agree on development measures. This approach applies to every employee, all the way up to top management. In 2009, about 90,000 e-learning sessions were completed and more than 7,300 participants attended seminars, advanced training courses and conventions, or received individual instruction.

A key HR function is the identification and selection of young talent for managerial tasks. This is handled at WACKER by a uniform groupwide process. In 2009, 14 “high potentials” completed their management training. We also offer a development program (“Management Experts”) to middle-management personnel aged over 50. Our aim is to retain their high performance levels in the second half of their careers. This program won second place in the “Chief Learning Officer” competition held by a German trade journal called “wirtschaft+weiterbildung” (business and professional development). In total, WACKER invested €5.3 million (2008: €7.2 million) in personnel-development measures and advanced training in 2009.

Companies profit from their employees’ ideas and improvement suggestions, especially in a harsh economic climate. Following a record 2008, WACKER’s idea management in 2009 saw a slight decline in suggestions submitted and in calculable benefits. Overall, employees submitted 5,724 suggestions (2008: 5,808) – roughly 1.5% below the prior-year figure. The calculable benefits amounted to €11.2 million (2008: €13.5 million). The participation rate (number of submitters per 100 employees) was 28% (2008: 28%). The German Institute of Business Administration (“dib”) presented WACKER with the “dib-Förderpreis 2009” award for good idea-management progress over the past few years.

A WACKER company pension is an important compensation component and is available at our major domestic and international sites – except for regions where legal provisions are inadequate or the statutory pension appears sufficient. In Germany, we offer employees an attractive company pension plan via our Wacker Chemie VVaG pension fund, which was established in 1928. The fund has some 15,700 members and provides pension payments to some 6,900 retirees. The average pension paid was around €630 per month. WACKER matches employees’ annual pension contributions, with the exact amount being determined by the type of agreement. In addition, employees have the opportunity to enlist in a private plan that minimizes their tax burden while saving for retirement.

WACKER has been addressing demographic change intensively for several years. The average age of the Group’s workforce was 42.5 on the reporting date (permanent staff). Employees at non-German sites are younger (average age: 41.2) than in Germany (42.8). The age structure abroad varies greatly from region to region. Staff at Asian sites are comparatively young (average age: 35.1), while staff at US locations have an average age of 47.5. Age structure variations are not exclusive to WACKER; they reflect each continent’s and country’s age structure.

To maintain our long-term innovative and competitive strength, we have specified ten strategic goals, involving measures ranging from health programs to basic and advanced training aimed at career flexibility. To remain attractive to current and future employees and retain them long term, we offer exemplary social benefits, performance-oriented compensation and challenging tasks. The 2009 fluctuation rate was 2.3% groupwide (2008: 2.9%) and in Germany only 0.7% (2008: 0.9%). At non-German sites, it was 7.5% (2008: 9.3%). The average length of service in Germany was 17.1 years (2008: 16.8 years).

Our HR policies received recognition once again in 2009. In an annual analysis by Germany’s Association of Chemical-Industry Executives (VAA), we advanced to second place (2008: third place). The VAA presented us with the 2009 Cologne Chemical-Industry Prize for the outstanding satisfaction grades awarded by our management employees. However, we are not resting on our laurels. As part of our personnel-marketing strategy, we aim to intensify our efforts to recruit specialists from fields vital to our success, such as engineers. Fifteen students from eight universities took part in our 2009 summer course devoted to process and chemical engineering.

WACKER’s HR Work Honored with 2009 Cologne Chemical-Industry Prize