Compensation and Social Benefits

Aside from a fixed base salary, WACKER employees usually receive variable compensation. This voluntary payment to employees on both the standard and above-standard pay scales is tied to the attainment of corporate goals. Since 2017, WACKER has gradually been introducing a new variable compensation system – this will supersede the previous variable compensation components and replace them with a standardized, market-oriented and transparent methodology that applies to all employees at the Group’s German sites. This new variable compensation system increases the employees’ share of profit. Groupwide variable compensation payments totaled €81.1 million in 2018 and €65.1 million in 2017.

IG BCE (the German mining, chemicals and energy labor union) and chemical industry employers agreed on a new collective-bargaining agreement in September 2018. As a result, the standard pay scale rose by 3.6 percent on November 1, 2018 – there had been a previous increase of 2.3 percent on October 1, 2017. In 2019, vacation pay will increase from €614 to €1,200 per annum. Compensation for apprentices also rose, by a total of 9.0 percent for the first two training years and by a total of 6.0 percent for the third and fourth years. WACKER raised the minimum salary bracket values for above-standard-pay-scale employees by 2.0 percent in July 2017, and by a further 3.0 percent in July 2018.

In August 2018, the HR department updated the time sheets for all employees in Germany. The new features now available to employees include the option of looking up time sheets online.

We believe that it is important to treat temporary workers fairly. WACKER meets all requirements as per the German Law on Temporary Employment (AÜG). The German collective-bargaining agreement on industry supplements for subcontracted employment in the chemical industry (TV BZ Chemie) applies in most cases.

Other important aspects, alongside salaries, include the company’s social-insurance contributions. Based on what competitors offer and on local market conditions, these benefits include supplementary sick pay, subsidized company restaurants, and our company cars. What is more, we offer attractive additional benefits that reflect the needs of our employees at different stages of their life. Examples include the ability to arrange flexible working hours, training opportunities, health-promotion offers, and the provision of support in exceptional family circumstances.

Company Pension Plan

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 (a mutual insurance company) – provides a company pension to employees in Germany. The fund has some 17,800 members and provides pension payments to around 8,400 retirees. The average pension paid in 2018 was €650 per month (2017: €650). WACKER pays in up to four times an employee’s annual pension contributions, with the exact amount being determined by the type of agreement. Employees can supplement their company pensions by making their own additional contributions. As provided for in the collective wage agreements, WACKER supports employees’ supplementary contributions. For the base amount, employees receive a 28-percent match called “Chemie­förderung I”; additional contributions receive the 13-percent “Chemie­förderung II” match. As well as WACKER employees, the company pension fund covers employees of other member companies.

Despite a challenging market environment, the fund was able to produce successful final reports in both 2017 and 2018. Long-term, it must meet an interest requirement of 3.87 percent in order to fulfill its pension obligations without outside assistance. In 2017, the return on total assets was 4.7 percent; in 2018, it was below the long-term interest requirement. Due to persistently low interest rates, Wacker Chemie AG, as the sponsoring entity, and the other member companies made a special contribution of €50 million to the fund. At the end of 2018, the company pension fund had €2.39 billion in assets. The fund has prepared itself well for the coming years with a broad investment portfolio, hedging mechanisms, continual risk evaluation and a strong sponsoring entity backing it. The fund again passed all the stress tests required by Germany’s Financial Supervisory Authority (BaFin).

As well as the pension-fund cover, employees in Germany receive an additional supplementary pension for that portion of their salary that exceeds the pension insurance contribution assessment ceiling.

Additionally, WACKER contributes to guaranteed minimum incomes in countries without national mandatory health insurance or pension programs. We make sure that our compensation and social benefits are fair and competitive worldwide. At the very least, they correspond to local legislation or industrial codes of practice and, in many cases, they surpass the local minimum. WACKER Greater China, for example, offers its employees a host of additional benefits, such as insurance policies and relocation assistance. Lower-paid employees, too, are in a position to cover their own and their families’ living costs.

WACKER’s part-time and fixed-term employees also receive the full range of social benefits. However, participation in some benefits and their full payment, e.g. profit-sharing and the company pension, are dependent on minimum seniority.

In 2018, the company and its employee councils agreed on new company agreements for the coming five years. These govern the topics of phased early retirement and hiring qualified apprentices for the period of 2018 to 2022. The new ruling extends phased early retirement to employees born in an additional two years, who, under certain circumstances, now have the option of retiring early. The company agreement provides that apprentices, if suitable, receive a job offer after graduating.

Employee Turnover

Good social benefits, competitive compensation and motivating tasks make WACKER an attractive employer. That is evident in our employees’ long-standing allegiance to the company. The average length of service in Germany (permanent staff) was 18.1 years (2017: 18.3 years). On average, executive personnel remain at the company for 21.6 years.

In 2018, 2.2 percent of employees resigned groupwide (2017: 1.9 percent). Employee turnover due to voluntary resignation is particularly low at WACKER’s German sites: 0.5 percent in 2018 (2017: 0.3 percent). At WACKER sites outside Germany, the resignation rate was 6.6 percent in 2018 (2017: 6.5 percent).

WACKER holds a regular celebration to honor its employees who have been with the company for many years. In 2018 alone, 285 employees based in Germany were recognized for 25 or 40 years of service, respectively.

Global Employee Survey

2018 was the first time that WACKER conducted a global employee survey at all of its sites. The goal was to identify the organization’s strengths and areas for potential improvement. The online survey is also intended as a tool for assisting managerial employees in improving performance in their areas of responsibility. The evaluation of the global employee survey results showed that WACKER employees around the world identify with their employer to a large degree.

85 percent of those surveyed in Germany and 86 percent at our sites elsewhere are proud to work for WACKER. 88 percent and 86 percent, respectively, would recommend WACKER as an employer. 86 percent of employees worldwide are willing to exert themselves and carry out tasks above and beyond what is required of them to contribute toward the Group’s success. 92 percent explained that their tasks and what was expected of them were clearly defined. 91 percent and 92 percent, respectively, responded that they are given work commensurate with their knowledge and abilities.

Both in Germany and globally, 93 percent completely or partly agreed with the statement: “In my organizational unit, we value sustainability.”

Employees see room for improvement in the acknowledgment of performance within the company, and in an openness to new ideas.

The participation rate was 72 percent in Germany and 75 percent at sites elsewhere. Compared to the last employee survey in 2015 in Germany, almost all questions got higher approval scores.

Popular Employer

WACKER is among the most highly regarded German companies. In 2018, it came fourth among 300 organizations analyzed in the annual reputation analysis by the market research portal Statista. In the chemical, pharmaceutical and biotechnology industries, WACKER even ranked first. For the study, the market researchers from Statista polled over 5,000 people about companies they have been involved with as business partners, employees or customers.

According to its own managerial employees, too, WACKER ranks among the most popular employers in the German chemical industry. In the member satisfaction survey conducted every year by Germany’s Association of Chemical-Industry Executives (VAA), WACKER came fourth among 24 participating companies in 2018. With an overall score of 2.50 (with 1 being the highest and 6 the lowest), WACKER once more improved on its performance in previous years. In the 2017 survey, WACKER had achieved the average overall score of 2.52.

The strategy pursued by WACKER Greater China’s HR department makes it one of the 100 best employers for Human Resource Management in China. In 2018, for the sixth year in a row, WGC won the “100 Employer Excellence of China” award, presented by Chinese recruitment agency “51job.” WACKER Greater China also received 51job’s “Excellence in Employee Development Plan of 2018” award for its exemplary employee development.