9 Employees

On 31 December 2010, the KION Group employed 19,968 people (including trainees and apprentices), roughly 60 per cent of whom worked outside Germany in 27 countries.

The number of employees was therefore almost the same as in 2009, although there were changes between the proportion of people employed in Europe and in the high-growth markets (China, North America and South America). The KION Group is thereby responding to the rapid expansion of these markets.

Personnel expenses increased from €925 million in 2009 to €968 million in 2010. One of the main reasons for this rise was that short-time working was suspended or ended earlier than planned.

In the KION Group, executives account for 294 of the total employees worldwide.

As a result of the continuing crisis, the KION Group implemented a range of measures around the globe at the start of 2010 in order to adjust the size of the workforce in line with the business conditions faced by the Company and to secure its competitiveness. To this end, it introduced other job-protection measures – where legally available – at its sites in individual countries, including short-time working, closure days and a reduction in weekly working hours.

During the year, the recovery took a firmer hold in the global market and the measures to consolidate the production sites took effect. The KION Group therefore responded in various ways, as regional circumstances allowed, particularly in the second half of 2010. In Germany especially, the KION Group was able at times to completely suspend short-time working at individual production sites or end it earlier than planned. The Company hired additional employees in high-growth countries such as China and Brazil.

As planned, the KION Group continued with the consolidation of its production sites that it had decided upon in 2009. This involved relocating products from the UK to Germany and France and closing the plant in Basingstoke. The 340 employees affected were or are being laid off with the minimum possible social impact. The Company has expanded the Reutlingen plant to become a VNA centre of competence and relocated the production of reach trucks to Hamburg. The 180 redundancies involved will be carried out as planned by mid-2011, with an interim employment company being set up for this purpose.

With a total of 557 (2009: 546) trainees and apprentices at the end of 2010, the Group continued to invest in training and development at the same high level – despite the crisis – to ensure that it can continue to recruit many of the skilled workers it requires inhouse.

The proportion of trainees and apprentices in Germany, for example, was 5.3 per cent in 2010. This is at a very similar level to previous years (2009: 5.2 per cent, 2008: 5.1 per cent).

In 2010, the Group's personnel development focused on two topics. The first of these was targeted continuing professional development during periods of short-time working and the second was talent and succession management. Especially at its German sites, the Company offered a range of skills training during periods of short-time working. The aim of this step was to enable employees – along with the Company – to emerge stronger from the crisis. This involved the KION Group holding more than 200 interdisciplinary and specialist training courses in Germany for more than 1,500 participants – employees affected by short-time working (it was possible to attend more than one course). As a result, the KION Group provided more than 4,800 days of training in 2010. Full-time training to obtain an officially recognised qualification as a technician was very popular at Linde Material Handling and, in the second half of the year, the first successful graduates from the course returned to Linde Material Handling to take up challenging positions there. There was also a lot of interest in part-time training offering a qualification at the end, such as courses offered by REFA on workplace design, particularly among employees in production-related units. Administrative employees also took the opportunity to participate in continuing professional development.

The second focal topic was the introduction of Group-wide talent and succession management as part of the KION Group's strategic personnel development. To safeguard its long-term success, the Company needs the right managerial staff and young professionals – in terms of quality and quantity – to meet the challenges they will face in future. In 2009, the KION Group had therefore revised the content of its annual management review to include the identification of high-potential/talented employees and succession planning. An updated process incorporating these issues was therefore able to start in 2010. A key element of the updated process is the creation of transparency across the Group about how talented employees and the next generation of managers are deployed in order to ensure that there are exchanges between the brands and countries and to identify development and deployment opportunities throughout the Group. Some 400 employees were involved in this process in 2010. Following the 2010 management review, the KION Group designed and set up appropriate Group-wide personnel development activities and programmes.

Where necessary, systematic, focused change management support was provided to help with the changes related to the KIARA performance enhancement programme. The main support activities took the form of workshops and coaching.

With its partial retirement model, the KION Group helps its employees transition smoothly into retirement. The model consists of two blocks: a working phase followed by a non-working phase. As at 31 December 2010, 381 employees in Germany were partially retired.

The KION Group offers its employees in Germany attractive occupational pension scheme options, including both direct insurance and a direct pension entitlement scheme.

Direct insurance comes in the form of a tax-privileged endowment insurance or pension insurance policy, which the employer takes out with an insurance company on behalf of the employee as a form of occupational pension scheme. The premiums are paid in the form of deferred compensation. This means that the employee pays part of his or her gross remuneration directly into the insurance policy. When this insurance policy matures – which will be no sooner than the employee's 60th birthday – the direct insurance policy will be paid out to the employee. The persons entitled to receive these benefits are either the employee or his or her surviving dependants.

Under the direct pension entitlement scheme, which the KION Group operates in Germany in accordance with the various pension benefit conditions and the pension plan, the employer provides occupational pension benefits directly. The KION Group does not use any external schemes (as is the case, for example, with direct insurance). In other words, the employer undertakes to provide the entitled employee with benefits in the form of a lump sum or a pension when the employee retires, dies or becomes unable to work.

The KION pension plan offers a further element to the occupational pension scheme for employees in the KION Group. It provides employees with the option of building up pension benefits by adding contributions taken from their gross income. The pension plan also offers an ideal opportunity to make use of the pension-relevant benefits available under collective pay agreements for the German metals industry. These subsidies are only available to employees if they are used in conjunction with one of the pension scheme models permitted by the collective pay agreement. The KION pension plan is eligible as one of these pension scheme models. By joining the KION pension plan, employees can enjoy relief from tax and social security contributions. As at 31 December 2010, 1,366 employees were in the KION pension plan.

Demographic change means that many companies' competitiveness is becoming increasingly dependent on older employees and on companies' ability to deal with their ageing workforce.

At the KION Group, approximately 58 per cent of the global workforce are aged between 30 and 50, and almost 24 per cent are more than 50 years old. By 2015, about a third of the workforce will be over 50. Particularly in production units, it will therefore be necessary to adapt working conditions to the ageing workforce, for example so that 60-year-old employees can still work in assembly. In previous years, the KION Group conducted preliminary studies and projects, the results of which will be incorporated into age management activities and projects in the future.