Employee Numbers Down Slightly

WACKER’s workforce decreased slightly in 2013. We had 16,009 employees worldwide as of December 31, 2013 (Dec. 31, 2012: 16,292), 1.7 percent down on one year earlier. This decline was mainly due to a restrictive hiring policy when filling open positions.

At the Burghausen site, Siltronic continued its job reductions in 150 millimeter wafer production begun in 2012, eliminating a further 50 positions through December 31, 2013. The cuts were achieved without involuntary layoffs, primarily through job offers at the Group’s other units, phased-early-retirement plans and natural staff turnover. With this restructuring measure, Siltronic adapted production to lower demand levels. We reorganized 300 millimeter wafer production in 2013 by combining the existing structures at the Burghausen and Freiberg sites into one single structure for all of Germany. This resulted in the elimination of 50 jobs through the end of 2013 through internal transfers, phased early retirement and voluntary severance packages.

In February 2013, WACKER canceled the short-time work schedule that had been introduced at Burghausen’s polysilicon facilities back in early October 2012. The Group made this decision amid growing demand from its solar-sector customers.

Number of Employees on December 31, 2013

12,322 WACKER employees (77.0 percent) work in Germany and 3,687 employees (23.0 percent) at non-German sites. We also employed 344 temporary workers in the year under review.

Number of Temporary Workers on December 31, 2013

As a manufacturing company, WACKER has a large contingent of industrial employees (54.2 percent), about an eighth of whom are women (13.2 percent).

Personnel expenses fell to € 1.13 billion (2012: € 1.20 billion), down 6.0 percent from the previous year. These expenses included outlays for social benefits and the company pension plan amounting to € 231.7 million (2012: € 217.3 million).

Personnel Expenses

In addition to their fixed base salary (which includes vacation and Christmas bonuses), WACKER employees usually also receive some variable compensation – a voluntary payment to employees both on the standard and above-standard pay scales. It consists of a profit-sharing amount and a personal-performance component. Employees in Germany received no payment of a profit share in 2013 for the 2012 fiscal year in light of that year’s earnings trend. The portion of variable compensation coupled to personal performance for 2012 will be paid out in the spring of 2014. The Group’s business performance precludes any payment of a profit share or performance bonus for 2013.

We also implemented a series of cost-saving measures in 2013. The Executive Board and Executive Personnel contributed by foregoing 10 percent of their fixed salaries from March through November 2013. Half of this solidarity contribution will be remitted to Executive Personnel during the course of 2014. The salary increases usually awarded to employees on above-standard pay scales for value retention purposes was suspended in 2013.

A WACKER company pension is an important compensation component and is available at most of our German and non-German sites – except for regions where the statutory pension appears sufficient or legal provisions are inadequate. Wacker Chemie AG’s pension fund – Pensionskasse der Wacker Chemie VVaG – provides a company pension to WACKER employees in Germany. The fund has around 17,000 members and provides pension payments to some 7,500 retirees. The average pension paid was around € 630 per month. WACKER pays in up to 3.5 times its employees’ annual pension contributions, with the exact amount being determined by the type of agreement. As of 2014, this amount will be raised to four times the employees’ contribution. Employees can supplement their company pensions by making their own additional contributions. WACKER matches supplementary contributions as provided for by the collective wage agreements. For the base amount, employees receive a 28-percent match called “Chemieförderung I”; additional contributions receive the 13-percent “Chemieförderung II” match. For salary over and above the pension insurance contribution assessment ceiling, employees in Germany receive an additional supplementary pension.

Award-Winning Trainees

Vocational training is one of the first steps of personnel development at WACKER. In 2013, 185 young people began their training at WACKER or at the Burghausen Vocational Training Center (BBiW). In total, the company employed 675 trainees, slightly more than a year earlier (2012: 665). At 5.2 percent, the percentage of trainees (ratio of trainees to Group employees in Germany) is also slightly above the previous year’s level (2012: 5.0 percent). 564 trainees are in scientific and technical disciplines and 111 in business-related fields. We offered permanent jobs at WACKER to most of our suitable trainees -124 graduates – in 2013. We additionally offered numerous fixed-term contracts. The Burghausen Vocational Training Center (BBiW) also provides training for some 24 partner companies. The public foundation set up by WACKER thus satisfies an intercompany training mandate – in 2013, partner companies sent 53 trainees to start courses at the BBiW.

The BBiW’s high quality of training is evidenced by all the awards won by its trainees. The Chamber of Industry and Commerce (German: IHK) for Munich and Upper Bavaria named a chemical technician and a logistics clerk the best of the class of 2013. In the Young Welders competition, WACKER trainees took home two gold and two silver medals at the state level. At the German Skills competition held in Leipzig, an electrical installer and an electronics and instrumentation systems technician qualified for World Skills 2013 and were presented with the “Excellence” medal for their achievements.

WACKER also trains young management talent, offering a General Management Trainee Program. Four university graduates completed the 18-month program in 2013.

WACKER will remain innovative and competitive as long as it has highly skilled employees. That is why we offer all our employees opportunities for additional training. At least once a year, employees and supervisors discuss development measures during performance reviews. This approach applies to all levels of corporate hierarchy. In 2013, our workforce completed about 88,000 e-learning sessions (2012: about 95,000), and more than 17,500 participants (2012: more than 15,500) attended seminars, advanced training programs and conventions, or received tutoring.

2013 marked the launch of a new talent-management process at WACKER. Our aim here is to identify and encourage talent at an early stage across the Group and to have candidates available that are sufficiently qualified to assume challenging tasks in the medium and long term. The talent-management process is directed at above-standard payscale employees and Executive Personnel. Employees are discussed at conferences held during the annual talent-management cycle. These conferences initially take place within a corporate sector (business division, corporate department or subsidiary), and are subsequently conducted across corporate sectors. This groupwide approach allows us to present opportunities to employees in small areas and at subsidiaries, too.

Overall, WACKER invested € 7.0 million in personnel-development measures and advanced training (2012: € 7.0 million).

HR Marketing Enhances Graduate Contacts

WACKER seeks to remain competitive in the face of demographic trends. Accordingly, we are intensifying our contact to graduates in critical disciplines. In 2013, the HR Marketing department expanded its talent relationship management in order to form closer ties with external candidates. We intensified our contacts with students whom we got to know during their training or internships with us and whom we considered to be prospects for subsequent employment. We invited graduates of the last five WACKER summer courses for process and chemical engineering students to a first-ever week of seminars designed to help them get ready for their first job. The central topic was social skills.

Idea Management on the Right Track

In order to do things better and stay competitive, WACKER relies on the ideas submitted by its employees. In 2013, improvement suggestions from our employees were at a record high for the fourth year in succession. In total, we received 9,159 suggestions (2012: 8,982) – roughly two percent more than in the previous year. The participation rate (number of submitters per 100 employees) fell slightly to 32 percent (2012: 34 percent). Our goal is still for every second employee to contribute ideas. The calculable benefit rose to € 7.7 million (2012: € 4.9 million). The WACKER Employee Suggestion Program celebrated its 85th anniversary in 2013.

Personnel Expenses

WACKER has been addressing the demographic trend for many years. The average age of the Group’s workforce at the reporting date was 42.4. Employees at non-German sites are younger (average age: 40.3) than in Germany (43.0). The age structure abroad varies greatly from region to region. Staff at Asian sites are comparatively young (average age: 34.7), while staff at US locations have an average age of 47.7. Regional variations in age structure are not exclusive to WACKER; they reflect the age structures of the populations in each continent and country.

Five Health-Management Focus Areas

To maintain our long-term innovative and competitive strength at WACKER, we have set ten strategic goals. Long-term measures for the workforce range from basic and advanced training opportunities to health programs. Our health management focuses on five areas: we seek to avoid spinal disorders and cardiovascular diseases in our workforce, increase mental resilience, enable age-appropriate work and find suitable jobs for staff with health restrictions.

In 2013, WACKER launched a preventive-care project in partnership with the South German branch of the country’s statutory retirement plan (Deutsche Rentenversicherung Süd). The aim here is to promote the health of shift workers. In a health program tailored specifically to this group of workers, participants are taught habits that can help them deal better with the pressures of shift work in the long term. The program consists of four modules: a one-week stay at a rehabilitation clinic, a three-month program of training at the workplace, a six-month period during which workers continue the training on their own and a final refresher weekend.

Our Health Services surveyed the Group’s management employees and Executive Personnel in Germany on mental and social stress. Applying a standardized, internationally recognized surveying method, we wanted to identify potential sources of stress and their consequences, as well as recommended courses of remedial action. The survey showed that, compared with a representative reference group, managerial employees at WACKER see themselves as being subjected to higher quantitative and emotional demands. These types of stress are, however, offset by a substantial range of flexibility in their own work areas.

Work on a new Health Services building at the main Burghausen site commenced in October 2013. The result will be a modern, efficient infrastructure providing occupational and acute medical care to more than 10,000 employees. This facility is scheduled to open in the fourth quarter of 2014.

Good social benefits, competitive compensation and motivating tasks make WACKER an attractive employer. This is demonstrated by the long-term commitment of our employees to our company: The average length of service in Germany (permanent staff) was 17.3 years (2012: 16.8 years). The 2013 employee turnover rate fell to 3.4 percent groupwide (2012: 7.9 percent) and in Germany it was only 0.9 percent (2012: 0.9 percent). At non-German sites, it was 11.9 percent (2012: 30.8 percent).

Employee Turnover Rate

Managerial Employees Give WACKER a Good Assessment

As viewed by its own managerial employees, WACKER remained one of the most popular chemical-sector employers in Germany in 2013. In the annual satisfaction survey conducted by Germany’s Association of Chemical-Industry Executives (VAA), the members gave WACKER a 2.80 score – on a par with the 2012 figure (2.78). On average, the 22 chemical, pharmaceutical and medical-technology companies participating in the survey scored 3.1 on a scale of 1 to 6, where 1 is the highest grade. Since some companies improved their year-on-year score, WACKER’s overall ranking fell from fourth place (2012) to sixth place. Experience shows that these results correlate with the company’s financial success.

In a survey of some 36,000 students at 130 universities and other institutions of higher education who were nearing their final exams, the consulting firm “trendence” identified WACKER as a highly popular employer among engineering graduates. The survey once again ranked WACKER among Germany’s top 100 companies to work for in 2013. A student survey conducted by the “Universum” consultancy showed that, in Germany, WACKER was a favored employer for natural sciences majors.