Management approach to employees

With its ‘KION 2027’ strategy, the KION Group has charted the course for its further corporate development. The strategy aims at further profitable growth and clearly defines the company’s claim to leadership. These goals are supported by the HR strategy that pursues the primary goal of employing a sufficient number of highly qualified and highly motivated employees at all times and in every area of the company. To recruit and retain such employees in the long term, the KION Group intends to set standards as a good employer. To this end, the Group is constantly enhancing its employer brands at an already high level.

HR challenges

KION’s Group-wide structure is rooted in an organisation based on operating units with clear responsibilities. The organisational integration of Dematic – one of the main challenges of the past two years – was successfully completed in the year under review. Work is continuing on the integration of IT structures and individual reporting processes.

The HR department allows for the uniqueness of the operating units while promoting collaboration within the Group. On top of this, the company faces varying challenges, ranging from demographic change in certain regions to the increasingly fierce competition for qualified young talent. In addition, there are the challenges of digital transformation, which lead to fundamentally changed external conditions. Several projects serve the purpose of recruiting employees with the requisite expertise for the KION Group.

In addition to approaching suitable young talent from outside of the company for specialist and management positions, one focus of HR activities is training high potentials from within the organisation. Further goals result from the ambition to express the diversity of the workforce and in particular to improve the development potential of female employees.

Various KPIs confirm the success of the initiated measures: The average age of employees at the two largest Group companies, Linde Material Handling GmbH and STILL GmbH, has remained almost constant for many years at around 41 and 42 years, respectively. In both companies, this can be attributed to the relatively constant, high number of apprentices that are taken on as well as the recruiting of young, high-potential candidates from outside the company.

HR strategy implemented systematically

With 16 topic areas, the KION Group’s HR strategy encompasses the essential aspects of HR activities and aims to develop an integrated, Group-wide approach with uniform standards. The measures defined for this purpose in the individual areas will be fully implemented by 2019; all measures are currently proceeding according to plan.

In addition, there is a Group-wide trainee programme to attract young talent, with preparations currently underway. The selection process for the KION Trainee Program has already begun, and the first trainees are scheduled to begin in October 2019.

The performance, talent and succession-planning management at the KION Group is based on a standardised Group-wide process, the Organization Capability Talent Review (OCTR).

The review is based not only on the clearly defined competence model, but also on the joint values and leadership guidelines adopted at the end of 2017.

Figure 5Overview of KION Group values

The core indicator for developing the KION Group organisation further is the Organisational Health Index (OHI) which also highlights areas for possible improvement. A feature of this method is the benchmarking of the Group’s results against other companies. In the last round in 2017, the measured values showed improvements in all areas, with the KION Group advancing to the second quartile of all surveyed companies with 68 points.

After the 2017 assessment, specific measures were defined at the level of the operational units and the respective country organisations, which are now being implemented successively. The responsibility for these measures lies at the national level.

The OHI findings also feed into the ‘Lift up’ change initiative, the third wave of which started in summer 2018. While the first two steps of the programme primarily served to embed the corporate structure among KION employees as well as to jointly develop the corporate values and establish a shared identity, the focus is now on incorporating the ‘KION 2027’ strategy. Particularly, this involves harmonising the respective objectives of the operating units and regions with the Group strategy and clarifying the contribution of the individual units and their employees in implementing the strategy.

Group-wide minimum employment standards

Across the KION Group, minimum employment standards have applied since 2014. Based on the fundamental conventions drawn up by the International Labour Organization (ILO), these include freedom of association, the right to collective bargaining, the elimination of child and forced or compulsory labour, and a ban on discrimination in respect of employment and occupation. Furthermore, the KION Group is committed to ensuring health and safety standards in the workplace and to paying its employees in line with the industry average in their particular country, and at the very least providing them with a living wage. The respective management teams and those responsible in the operating units ensure compliance with statutory standards. These standards are also reviewed in all consolidated units via internal audits or as part of the annual internal sustainability reporting process. Instances of non-compliance can be reported at any time, including anonymously via a compliance hotline.

In 2018, the KION Group was not aware of any significant incidents or violations of the minimum employment standards. Furthermore, there are no indications that individual units could violate human rights, the right to freedom of association and collective bargaining, or the prohibition of child and forced or compulsary labour.

Codetermination as a key to success

Involving employees in codetermination matters comes naturally to the KION Group. Internal consensus is traditionally viewed as a success factor for the company. The KION GROUP AG Supervisory Board comprises equal numbers of shareholder and employee representatives in accordance with the German Mitbestimmungsgesetz [Codetermination Act]. Employee representative bodies at a business unit and Group level are formed in accordance with national legislation. For cross-border issues, the employees of the KION Group’s European locations are represented by the European Works Council.

The companies reported 22,984 KION Group employees covered by collective bargaining agreements at the end of 2018.