Employees

The Volkswagen Group is one of the world’s largest employers in the private sector. As of December 31, 2018, we employed 664,496 people, including the Chinese joint ventures, 3.5% more than at the end of 2017. The ratio of Group employees in Germany to those abroad remained largely stable over the past year: at the end of 2018, 44.1 (44.8)% of the employees worked in Germany.

Human resources strategy and principles of the human resources policy

With the human resources strategy “Empower to transform”, the Group is continuing with key and successful approaches to human resource management. These include the pronounced stakeholder focus on corporate governance, comprehensive participation rights for employees, outstanding training opportunities, the principle of long-term service through systematic employee retention and the aspiration to appropriately balance performance and remuneration. At the same time, the new human resources strategy is setting innovative trends. Hierarchies are being dismantled, and modern forms of working such as agile working – an approach whereby most responsibility for the work organization is transferred to the teams – are set to be expanded. In the future, collaborative robots will ease heavy physical work in factories and digital processes will simplify administration.

In the Human Resources division, we are guided by five overarching objectives:

• The Volkswagen Group aims to be an excellent employer with all of its brands and companies worldwide.
• Highly competent and dedicated employees strive for excellence in terms of innovation, added value and customer focus.
• A forward-looking work organization ensures optimal working conditions in factories and offices.
• An exemplary corporate culture creates an open work climate that is characterized by mutual trust and collaboration.
• The Company’s human resources work is highly employee-oriented while also aiming for operational excellence and providing strategic value-added contributions.

In the course of the 2018 reporting period, we continued to work on our diversity management program that we are rolling out throughout the Company. Given the cultural diversity in our global markets and the growing economic momentum, competitive success requires an ever-broader range of experience, world views, problem-solving and product ideas. The diversity of our staff provides potential for innovation in this area, which we aim to make better use of in the future. Mandatory rules on the percentage of women in management, combined with targets for the internationalization of senior management, are at the heart of diversity management at Volkswagen.

We are also driving large-scale cultural change to achieve greater openness and transparency in line with our corporate strategy. Seven Volkswagen Group Essentials formulated in 2018 provide shared values and the foundation for cultural change across all brands and companies:

• We take on responsibility for the environment and society.
• We are honest and speak up when something is wrong.
• We break new ground.
• We live diversity.
• We are proud of the work we do.
• We not me.
• We keep our word.

Group-wide activities such as team dialog encourage employees to analyze the Group Essentials.

In 2018, we also began to implement our new approach throughout Human Resources departments across the Group. Going forward, the development paths into management will be characterized by greater individual responsibility, transparency and practical relevance and will include employees from different levels of the hierarchy in the evaluation of candidates.

When implementing our Group strategy TOGETHER – Strategy 2025, we paid particular attention in the reporting period to the level of achievement regarding the goals set by the applicable strategic KPIs. For the passenger car-producing brands, we compile and analyze the following information:

• Internal employer attractiveness. The indicator is determined by asking respondents, as part of the Group-wide opinion survey, whether they perceive the respective company as an attractive employer. The target for 2025 is 89.1 out of a possible total of 100 index points. A score of 84.2 index points was achieved throughout the Group in the reporting period, contrasting with 85.2 points in the previous year.
• External employer attractiveness. The ability to recruit top talent is of decisive importance, particularly in view of the Company’s transformation into a world-leading provider of sustainable mobility solutions and the associated development of new business fields. Using this strategic indicator, we check the positioning of the major passenger car-producing brands on the labor markets once a year with regard to graduates and young professionals. Rankings in surveys by renowned institutions, in which we aim to achieve top scores for all Group brands, serve as the basis for this.
• Diversity index. As we establish diversity management across the Group, this strategic indicator for the active workforce is used worldwide to report the development of the proportion of women in management and the internationalization of top management. In particular, it underpins the objective of the human resources strategy, which is aimed at contributing to an exemplary leadership and corporate culture. The proportion of women in management amounted to 13.8% in 2018 and was therefore at the prior-year level; we aim to raise this to 20.2% by 2025. We aim to increase the level of internationalization in top management, the uppermost of our three management tiers, to 25.0% in 2025; in the past fiscal year this was 19.2 (18.7)%.

In the truck and bus business, we look at the opinion survey and cross-brand exchange of employees to identify how well strategic targets are being achieved:

• Opinion survey. The sentiment rating is used to determine the level of employee satisfaction and identification with the company. The sentiment rating is calculated as the average score of all responses regularly submitted as part of the opinion survey. In the truck and bus business, the 2018 result amounts to 76.4 (74.7) index points and is therefore higher than the previous year’s level.
• Cross-brand exchange and rotation. The aim is to continuously intensify collaboration between the commercial vehicle brands. It is also designed to enable the creation of specialist and international networks at the same time. We use this indicator to analyze how many employees work at another brand through rotation. In 2018, this opportunity for career development again saw an increase in uptake.

One strategic indicator has been defined for the financial services business:

• External employer ranking. This involves taking part in an external benchmarking, in general once every two years. The aim is to position ourselves as an attractive employer and identify measures to become a top-20 employer by 2025, not just in Europe, but globally. Volkswagen Financial Services AG was represented in various national and international best-employer rankings the last time it participated in 2016. In 12th place, it was among the top European employers in the “Great Place to Work” employer competition.

EMPLOYEES BY CONTINENT
in percent, as of December 31, 2018