Note 12: Our people

Building an engaged workforce

We strive to measure and increase employee engagement. Every year, we give employees the opportunity to share their feedback through our annual engagement survey. It provides us with information about what’s going well and where we can improve our working environment. Our employees and managers have a shared responsibility to discuss the results and develop and implement actions for further improvements.

In 2015, we exceeded our ambition of a 4.00 engagement score for the first time since we started the survey in 2010. Since then, we have seen a step change in our leaders’ engagement and now have five times as many teams at top engagement levels.

Compared with other companies that started at a similar level five years ago, we are among the top improvers in terms of our engagement scores. We are pleased with our level of improvement, but we recognize that to become a leader in this area, we need to continue building the capabilities of our people managers and our feedback culture.

Creating inclusive and diverse teams

We are committed to reflecting the diversity of our overall workforce in all our management layers. At the end of 2015, 24 percent of positions in AkzoNobel were held by women and 49 percent by employees from high growth markets.

Our 2020 ambition is to have at least the same gender representation at senior management level in the organization, with a specific focus on increasing female representation in commercial and business roles. Alongside our gender ambition, we want our executive population to be a better reflection of the regions where we do business. We are in the process of updating our strategy and measures to reflect these ambitions.

Over the last five years, the representation of women in executive positions in our organization has grown steadily to 19 percent at the end of 2015 (2009: 10 percent). Our Women in Leadership program helped to support this growth in 2015. It aims to support women to fulfill their potential as leaders by recognizing their strengths, exploring their authentic leadership style and identifying strategies to increase their impact.

However, the percentage of female executive potentials has not reached our ambition level of 30 percent. This is primarily due to the improvements made in 2014 to the definition of growth potential, although we did still see a small increase from 24 percent in 2014 to 25 percent in 2015.

The representation of executives from high growth markets has remained steady over the last two years, at 16 percent. The economic slowdown in some of our key growth markets impacted the growth in the number of executive roles in these regions and meant that we did not achieve our 2015 ambitions. However, the continued higher diversity of our hires and promotions into executive level (2015: 20 percent from high growth markets) will improve the number in the future.

In contrast, the number of executive potentials from high growth markets grew to 31 percent at the end of 2015, exceeding our ambition of 30 percent and securing a future pipeline of diverse talent.

Identifying and retaining talent

Building a strong internal talent pipeline – based on potential, skills and knowledge – is one of our key priorities in terms of meeting the changing demands of our businesses and the markets in which we operate. With this in mind, we continued our Fast Track Management Program in 2015 and recruited new leadership talent, mainly in our high growth markets.

By the end of 2015, we had also conducted a major review of our internal talent to verify the strength of our internal pipeline and skills base. We assessed that in order to achieve our business goals, we needed to rapidly increase our knowledge and skills in certain areas. As a result we made a conscious decision to hire externally to accelerate our progress. This meant that in 2015, external hires into executive positions were above 20 percent. Our ambition over multiple years continues to be to fill 80 percent of our executive positions with internal promotions. The new external hires have been tasked with putting together strong teams to ensure the future development of internal talent pipelines.

In 2015, we saw multiple proof points of our increased attractiveness in the labor market. We broke into the top 20 favorite employers in the Intermediair Favorite Employer Survey in the Netherlands. In Brazil, we were the top ranked chemical company in the list of most loved companies in Brazil published by Love Mondays. In the UK, we ranked number two in the Scientific and R&D industry sector of Job Crowd’s Top 100 Companies for Graduates to work for. In Sweden, AkzoNobel was the number one employer for chemical engineers according to the Universum Student Ranking, while in China, we were presented with the 2015 Best Recruitment and Retention Company award.

The continued reorganization of the company offered opportunities to promote and retain potential leaders and transfer knowledge across our businesses. This resulted in 11 percent of potential and current leaders moving across the organization in 2015 (2014: 13 percent). Additional development opportunities inside the company meant that our retention rate for leadership talent remained at a similar level to 2014 (93 percent), despite improved external labor market conditions. We saw an improvement in our retention in under-represented groups (from 89 percent in 2014 to 92 percent in 2015).

Our total turnover remained stable at 13 percent, which reflects both the impact of our restructuring efforts and the overall improvements in the external labor markets in some of our key countries, including the US.

Providing learning and development opportunities

We are committed to supporting professional and personal development for all our employees. We do all we can to develop existing talent, nurture new skills and help employees progress within AkzoNobel. By holding regular conversations, employees and managers can identify future development opportunities and ensure that individual skill sets are expanded, enabling our people to continuously grow.

The AkzoNobel Academy is our global virtual hub for learning and development and gives all employees access to learning programs and content based on best practices from across our organization. The Academy offers blended learning opportunities to suit individual needs. It was expanded in 2015 to include more than 100 open enrolment programs in eight languages, allowing employees to access learning on demand. It will continue to grow further in 2016.

Our commitment to developing our employees is reflected in our annual engagement survey, with a learning and growth opportunity score of 4.05 (2015 target: 4.00). Specific attention was paid to the development of our people managers. Their skills and behavior are key to the creation and development of diverse teams, with a strong customer focus and excellent performance. To support this, we introduced our People Manager Program in 2015. This is a blended learning program with multiple modules, clustered around specific topic areas and offering timely support to people managers.

To support both individual employees and their managers in the development of their teams, we have trained 100 internal coaches. They provide development sessions to identify and leverage the strengths of individuals and teams, coaching them to do what they do best every day, both in and outside of work.