Management approach to employees

KION’s Group-wide governance model is based on clear organisational principles and responsibilities. Examples of this include its Group organisation based on operating units as well as the launch of its Group-wide CTO organisation in 2016. The transformation of the organisational structure initiated in the previous year has since been largely implemented.

With the acquisition of Dematic in 2016, the KION Group heralded the start of a new chapter in the Company’s history. In 2017 the HR department’s activities focused on integrating the new business segment into the Group. As part of this, KION governance was expanded to encompass Dematic by, among other things, including the integration of Dematic’s key organisational departments (particularly Development) into the CTO organisation, integrating Dematic IT into the KION Group IT department, and embedding Egemin Automation into the Dematic organisation.

The objective to maintain the uniqueness of the operating units while promoting collaboration within the Group remains one of the key HR challenges. On top of this, the Company faces varying challenges, ranging from demographic change in the individual regions, through to the digital transformation – frequently referred to as Industry 4.0. It is therefore essential in an increasingly competitive world to recruit and retain qualified new talent with the requisite expertise, especially in the fields of software development and IT. To achieve this objective the Group established corresponding projects in 2017.

As a strong, successful and clearly positioned company, the KION Group is well equipped for the battle to recruit young high potential employees and can offer them excellent employment conditions and development opportunities from an international perspective. With the Company’s recruitment policy, its own and its products’ solid reputation, and its reputation for good working conditions and remuneration terms, the KION Group can also counter the demographic development that is leading to an increasing shortage of new talent in many Western industrialised countries – particularly Germany.

The average age of employees at Linde Material Handling GmbH has remained almost constant for many years at around 41 years old, and at STILL GmbH it is around 42. This shows the success of measures aimed specifically at countering an ageing workforce. In both companies this includes the relatively constant, high number of apprentices that are taken on as well as the targeted balancing of age-related exits with young, high potential candidates from outside the Company.

With its Group-wide HR strategy, the KION Group sees itself as well equipped to meet the aforementioned challenges. With its 16 topic areas, the strategy encompasses the essential aspects of HR activities and aims to develop an integrated, Group-wide approach with uniform standards. Additional initiatives to further develop HR tools were established during 2017, and some of these were already rolled out in early 2017.

One example includes the Organization Capability Talent Review (OCTR), a standardised Group-wide process for performance talent and succession-planning management. The review is based not only on the recently defined competence model, but also on the joint values and leadership guidelines adopted at the end of 2017. The development of corporate values is a milestone in the KION Group’s history: this was a multi-stage process involving around 1,000 employees from all operating units, countries and hierarchical levels. Every employee around the world was able to apply to participate in the development process. Thanks to the hundreds of applications, it was possible to form a diverse group of participants in terms of cultural, functional and demographic aspects; this ensured that the different perspectives were heard in the eleven workshops held around the world, and that all employees can now identify with the common KION Group values of Integrity, Collaboration, Courage and Excellence.

Figure 5 Overview of KION Group values

The core indicator for developing the KION Group organisation further is the Organizational Health Index (OHI). It is recalculated on an ongoing basis and serves as the indicator for the organisation’s performance while also highlighting areas of action for possible improvement. A feature of this method is the benchmarking of the Group’s results against other companies. The first measurement at the KION Group was performed in summer 2015, with another measurement performed in the reporting year. This time, the survey covered 3,060 executives from all levels – significantly more than in the first survey. The participation rate was 81 per cent (2015: 88 per cent). It showed improvements in all areas, with the KION Group advancing to the second quartile of all surveyed companies with 68 points (2015: 62 points, 3rd quartile). The next OHI survey is scheduled for 2019.

The survey findings also feed into the ‘Lift up’ change initiative, the second wave of which started in 2017. While wave one served to embed the new corporate structure and governance among KION employees, wave two aims to create a shared identity. Underpinning this are the corporate values and leadership guidelines developed as part of the OCTR process, which were communicated Company-wide at the end of September 2017.

As in the first wave, ‘Lift up’ team workshops are currently being held around the globe. The aim is to ensure that employees understand the KION Group’s values and leadership guidelines both at a personal and team level, and that they embrace these in their daily work. The workshops follow a cascading approach, and are expected to be completed by the end of February 2018. For the remainder of 2018, further measures are planned to embed the corporate values alongside the communication and cascading of the ‘KION 2027’ strategy.

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 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. Instances of non-compliance can be reported to the Group management at any time, including anonymously via a compliance hotline.

Involving employees in codetermination matters as well as actively shaping industrial relations, comes naturally to the KION Group. Internal consensus and stable social structures are 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 21,203 KION Group employees covered by collective bargaining agreements in 2017.