EMD Group Corporate Responsibility Report - Update 2013

Workforce structure

Number of total employees


As of Dec. 31	2009	2010	2011	2012	2013
Total employees	33,062	40,562	40,676	38,847	38,154
Men	19,097	23,171	23,347	22,505	22,253
Women	13,965	17,391	17,329	16,342	15,901

The "Fit for 2018" transformation and growth program impacted HR work in 2013 as well. In 2013, at the majority of our sites the structural prerequisites were put in place and agreements were reached with the respective social partners in order to implement the socially responsible approach to workforce reduction necessary as part of the transformation process. For example, in Germany, around 1,200 employees chose to participate in a partial retirement program or a voluntary leaver program. By the end of 2013, we had completed the process of moving our biopharmaceuticals division's headquarters from Geneva to Darmstadt. In comparison to 2012, the total number of employees in 2013 decreased by 693.

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Number of employees by hierarchical level

As of Dec. 31

2009

2010

2011

2012

2013

Figures do not entirely include the employees of the life science tools division, which was acquired in July 2010. The Global Grading System was instituted there incrementally.

Total employees

33,062

40,562

40,676

38,847

38,154

Senior Management (Global Grade above 17)

Not recorded

51*

49*

Low and middle management (Global Grade 14-17)

Not recorded

1,354*

1,355*

1,719

1,949

Other employees (Global Grade below 14)

Not recorded

39,157*

39,272*

37,074

36,142

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Average number of employees by functional area


Average number of employees	2009	2010	2011	2012	2013
Group	32,850	36,347	40,570	39,939	38,282
Production	6,956	8,327	9,317	9,486	9,985
Logistics	1,773	1,927	2,054	1,665	1,779
Marketing and Sales	10,582	11,541	12,322	12,353	12,214
Administration	3,750	4,378	4,696	4,416	5,106
Research and Development	3,627	4,116	4,632	4,558	4,433
Infrastructure and Other	6,162	6,058	7,549	7,461	4,765

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Number of employees by region

As of Dec. 31

2009

2010

2011

2012

2013

*	No retroactive calculation based on the new regional structure.
**	Latin America and Asia excluding Japan.

Total

33,062

40,562

40,676

38,847

38,154

Employees in Europe

21,830

20,777

20,013

thereof women

9,832

9,261

8,755

Employees in North America

4,964

4,848

4,911

thereof women

2,314

2,225

2,246

Employees in Emerging Markets**

12,229

11,642

11,688

thereof women

4,565

4,274

4,335

Employees in Rest of World

1,653

1,580

1,542

thereof women

618

582

565

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Full-time and part-time employees


As of Dec. 31	2009	2010	2011	2012	2013
% of full-time employees	94	94	94	94	95
% of part-time employees	6	6	6	6	5

In 2013, 39% of employees working full-time at Merck KGaA, Darmstadt, Germany were women (2012: 39%), with women representing 92% of employees working part-time (2011: 90%). In 2012, 13% of employees worked part-time at the Darmstadt, Gernsheim and Grafing sites in Germany, with 11% working part-time there in 2013.

In 2013, 8% of our part-time employees were men.

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Temporary and permanent contracts


As of Dec. 31	2009	2010	2011	2012	2013
Total employees	33,062	40,562	40,676	38,847	38,154
Number of employees with permanent contracts	Not recorded	Not recorded	39,261	37,732	36,908
Number of employees with temporary contracts	Not recorded	Not recorded	1,415	1,115	1,246

Only 3% of Merck KGaA, Darmstadt, Germany, employees have temporary contracts.

In 2013, 42% of Merck KGaA, Darmstadt, Germany, employees with permanent contracts were women (2012: 42%); 43% of the employees with temporary contracts were women (2012: 46%).

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Staff turnover

2009

2010

2011*

2012*

2013

Total turnover rate

Not recorded

13.37

13.71

14.61

Turnover rate by gender

Men

Not recorded

10.98

13.17

14.08

Women

Not recorded

12.07

14.45

15.34

Turnover rate by age group

Up to 29 years old

Not recorded

22.40

23.77

21.55

30 to 49 years old

Not recorded

11.58

12.48

13.44

50 or older

Not recorded

11.40

9.91

13.01

Turnover rate by region

Europe

Not recorded

8.57

9.52

11.83

North America

Not recorded

14.48

12.75

10.51

Emerging Markets

Not recorded

21.00

21.46

21.15

Rest of World

Not recorded

17.00

14.68

14.14

The figures for 2011 and 2012 have been recalculated based on the reporting date and therefore now differ from the figures reported in prior years.

The table contains unadjusted turnover rates, calculated as follows: number of separations*100/number of employees as of Dec. 31.

The adjusted turnover rate excludes employees who leave due to parental leave or a long-term illness, as well as employees who are transitioning to the non-working phase of partial retirement.

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Staff turnover


	2009	2010	2011	2012	2013
Turnover rate of employees who were hired during the 18 months preceding Dec. 31 of the respective year	Not recorded	Not recorded	12.23	14.07	12.77
Turnover rate by gender
Men	Not recorded	Not recorded	13.49	15.20	13.74
Women	Not recorded	Not recorded	10.42	12.34	11.34
Turnover rate by age group
Up to 29 years old	Not recorded	Not recorded	16.25	16.20	15.55
30 to 49 years old	Not recorded	Not recorded	9.18	12.73	10.76
50 or older	Not recorded	Not recorded	8.51	9.69	10.64
Turnover rate by region
Europe	Not recorded	Not recorded	7.16	8.16	8.71
North America	Not recorded	Not recorded	7.30	7.91	6.42
Emerging Markets	Not recorded	Not recorded	17.11	19.06	16.10
Rest of World	Not recorded	Not recorded	5.67	11.90	15.77

Merck KGaA, Darmstadt, Germany, records the new employee turnover rate over the course of 18 months because 12 months is too short a time to become truly familiar with a new position, especially when it comes to management positions.

The turnover rate is calculated as follows: (Number of newly hired employees within the preceding 18 months that left Merck KGaA, Darmstadt, Germany, within the same period)/(average number of employees in the preceding 18 months)*100

The figures exclude employees who leave due to parental leave or a long-term illness, as well as employees who are transitioning to the non-working phase of partial retirement.

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Core labor standards of the International Labour Organization (ILO)

As of Dec. 31

2009

2010

2011

2012

2013

1	ILO: Hours of Work (Commerce and Offices) Convention, 1930 (No. 30).
2	ILO: Holidays with Pay Convention (Revised), 1970 (No. 132).
3	ILO: Maternity Protection Convention (Revised), 1952 (No. 103).
4	ILO: Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87).
*	In the years 2010, 2011 and 2012 Merck KGaA, Darmstadt, Germany, recorded the percentage of employees who have a right to collective bargaining.

% of full-time employees (standard contract, excluding exempts) with contractually stipulated working hours of maximally 48 hours/week¹

% of full-time employees (standard contract) with at least 15 vacation days/year²

% of female employees with access to maternity leave programs³

100

% of employees with the right to collective bargaining⁴

% of employees working at companies where collective agreements apply

Not recorded

Not recorded*

% of sites that rule out complicity in child labor as described in ILO Convention 138

100

Age of youngest employees, excluding apprentices

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Local minimum wage

2009

2010

2011

2012

2013

*	Minimum wage as stipulated by law, or derived from other provisions such as collective agreements.

% of sites that guarantee a salary above the local minimum wage*

100

The Global Rewards Policy applies to all Merck KGaA, Darmstadt, Germany, legal entities worldwide and guarantees a systematic compensation structure. Base pay is oriented to the median base pay, and short-term variable compensation is based on the third quartile of the relevant reference market. The overall compensation package thus exceeds the market median.

Occupational health and safety

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Work-related accidents

2009

2010

2011

2012**

2013

*	2011: Figures retroactively adjusted. In our Annual Report an LTIR of 2.1 was reported for 2013. Due to new data provided from one site the LTIR has been increased to 2.2.
**	Incl. temps.

Lost Time Injury Rate (LTIR)

3.5

3.0

2.1*

2.3

2.2*

Europe

4.3

4.5

3.1

3.9

3.7

North America

0.7

1.9

1.5

1.2

0.9

Emerging Markets

3.1

1.9

0.9

0.7

0.8

ROW

0.7

0.4

2.1

1.0

Number of deaths

Merck KGaA, Darmstadt, Germany, employees have been included in the calculation of the indicators as well as supervised employees of external companies. Independent contractors have not been taken into account.

Using the LTIR, we record work-related accidents of our employees that involve at least one day of missed work. A work-related accident is an injury that results from the type of work, in the course of doing said work, and that has no internal cause (cumulative trauma). Work-related accidents are considered relevant if they occur on the premises, on business trips, during a transport accident, in the course of external influences (e.g. natural disasters), or due to criminal acts involving personal injury. Commuting accidents and accidents during company sporting activities are not included. First-aid incidents are generally not included in the LTIR since these usually do not result in more than one day of missed work.

We have set ourselves the goal of reducing the LTIR rate to 2.5 by 2015. In 2013, by means of targeted accident prevention measures we again outperformed this goal as we did in the previous two years, achieving an LTIR of 2.2.

For Merck KGaA (24% of the employees of the Merck KGaA, Darmstadt, Germany Group) we report work-related illnesses if these have been diagnosed and certified by a physician. In the reporting period, one case of work-induced illness was recorded. We do not keep track of the number of work-related illnesses throughout Merck KGaA, Darmstadt, Germany.

Continuing education and training

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Spending on advanced training for employees (€)


	2009	2010	2011	2012	2013
Average continuing education spending per employee	1,102	1,152	982	699	679

Besides savings measures within the scope of the "Fit for 2018" transformation program, the increased use of online training has also contributed to a reduction in training costs.

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Apprentices*

As of Dec. 31

2009

2010

2011

2012

2013

Only pertains to the Darmstadt, Gernsheim and Grafing sites in Germany (which accounted for around 24% of Merck KGaA, Darmstadt, Germany, employees in 2013).

Number of apprentices

520

513

523

528

516

% of apprentices

5.7

5.9

5.6

5.7

5.6

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Employees who regularly receive a performance and development evaluation


As of Dec. 31	2009	2010	2011	2012	2013
% of employees who regularly receive a performance and development evaluation	Not recorded	88	98	98	97

Our globally uniform Performance Management process requires annual feedback discussions and performance assessments for all employees that are rated above Global Grade 10 in our position assessment system. Apart from evaluating employee performance, it helps us to identify individual development opportunities. To date, around 27,400 employees worldwide have been involved in the process (2012: around 23,800 employees).

For all other employees that do not participate online in this globally uniform process, other methods of performance assessment are available. In 2012, 97% of employees took part in a performance and development evaluation.

Diversity and inclusion

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Percentage of women

As of Dec. 31

2009

2010

2011

2012

2013

These figures do not entirely include the employees of the Millipore Corporation, which was acquired in July 2010. The Global Grading System was instituted there incrementally.

% of women in the entire workforce

% of management positions held by women (Global Grade 14 or above)*

22*

23*

% of women in the biopharmaceuticals and Consumer Health divisions

Not recorded

% of women in the Performance Materials and life science tools divisions

Not recorded

Since 2009, we have been continually increasing the percentage of management positions held by women. In 2013, with 25% of management positions (Global Grade 14 or above) held by women, we reached our goal of increasing this percentage to at least 25%-30%.

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Internationality of employees

2009

2010*

2011*

2012

2013

These figures do not entirely include the employees of the Millipore Corporation, which was acquired in July 2010. The Global Grading System was instituted there incrementally.

Number of nationalities

111

128

125

121

114

Number of nationalities in management positions (Global Grade 14 or above)

% of non-Germans in management positions (Global Grade 14 or above)

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Employee age by region


Number of employees	Worldwide	North America	Europe (including Germany)	Germany	Emerging Markets	Rest of World

2012
Up to 29 years old	5,957	508	2,354	1,466	2,878	217
thereof women	2,476	226	1,104	593	1,067	79
30 to 49 years old	25,329	2,843	13,592	6,361	7,835	1,059
thereof women	11,027	1,339	6,290	2,478	2,976	422
50 or older	7,561	1,497	4,831	2,961	929	304
thereof women	2,839	660	1,867	1,022	231	81
Average age	40.2	43.6	41.8	42.3	36.0	40.3
Total employees	38,847	4,848	20,777	10,788	11,642	1,580

2013
Up to 29 years old	5,906	462	2,362	1,494	2,883	199
thereof women	2,411	204	1,071	587	1,059	77
30 to 49 years old	24,562	2,867	12,774	6,221	7,882	1,039
thereof women	10,666	1,359	5,851	2,447	3,044	412
50 or older	7,686	1,582	4,877	3,153	923	304
thereof women	2,824	683	1,833	1,074	232	76
Average age	40.4	44.1	41.9	42.6	36.0	40.5
Total employees	38,154	4,911	20,013	10,868	11,688	1,542

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Employees with disabilities* (%)

As of Dec. 31

2009

2010

2011

2012

2013

Only pertains to the Darmstadt, Gernsheim and Grafing sites in Germany (which accounted for around 24% of Merck KGaA, Darmstadt, Germany, employees in 2013). The figures for 2009-2011 have been retroactively adjusted (calculations based on the German Social Code IX - SGB IX).

Employees with disabilities*

4.1

4.2

4.9

5.0

Insurance and retirement benefits for employees

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Insurance and pension systems for employees

2009

2010

2011

2012

2013

*	Due to new data provided these figures have been retroactively adjusted.

% of employees who are obliged to contribute to a statutory pension system

95*

% of employees in a company pension plan (also in addition to the statutory pension plan)

% of family members who are entitled to a statutory surviving dependent's pension

Not recorded

% of family members who are covered by a company pension plan in addition to the statutory surviving dependent's pension

Not recorded

% of employees with company accident insurance

100

% of employees with statutory health insurance

% of employees with
employer-funded health insurance

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Long-term pension obligations and post-employment benefits


€ million	2009	2010	2011	2012	2013
Present value of all pension obligations as of Dec. 31	1,878	2,356	2,490	2,830	2,737
Pension expenses	98	132	168	159	147

Depending on the legal, economic and fiscal circumstances prevailing in each country, differing retirement benefit systems are provided for the employees of Merck KGaA, Darmstadt, Germany. As a rule, these systems are based on length of service and salary of the employees. Pension obligations of Merck KGaA, Darmstadt, Germany, include both defined benefit and defined contribution plans, and comprise both obligations from current pensions and accrued benefits for pensions payable in the future. At Merck KGaA, Darmstadt, Germany, defined benefit plans are funded and unfunded. These provisions also contain other post-employment benefits, such as accrued future health care costs for retirees in the United States (see Annual Report 2013, Note on Provisions for pensions and other post-employment benefits ).

Reconciling the demands of a career and family

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Flexible working hours


	2009	2010	2011	2012	2013
% of employees with the option of working flexible hours	Not recorded	57	58	69	75

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Parental leave in Germany*

As of Dec. 31

2009

2010

2011

2012

2013

*	Figures only pertain to the Darmstadt, Gernsheim and Grafing sites in Germany (which accounted for around 24% of Merck KGaA, Darmstadt, Germany, employees in 2013). For 2009, the figures were calculated based on the data as of Dec. 31 of the respective year; since 2010, the data from the entire year has provided the basis for the calculation, which also includes those employees who took parental leave during the calendar year, but who had returned by Dec. 31.
**	Since parental leave can be taken for a period ranging from one month to three years, it is possible for employees to be recorded across a period of up to four calendar years. This explains why the number of employees on parental leave exceeds the number of employees who have a right to it.
***	Figure will be available on Dec. 31, 2014.

Number of employees with a right to parental leave

Not recorded

237

299

254

thereof women (recorded via maternity leave in the respective year)

Not recorded

139

120

thereof men (recorded via special paternity leave in the respective year)

Not recorded

155

160

134

Number of employees who took parental leave

162

368

401

434

433

thereof women

Not recorded

283

303

292

thereof men

Not recorded

118

131

141

Number of employees on parental leave who worked part time during their leave

Not recorded

123

137

thereof women

Not recorded

117

135

thereof men

Not recorded

Number of employees who returned from parental leave

Not recorded

144

162

151

thereof women

Not recorded

thereof men

Not recorded

100

Number of employees still working for us one year after their return from parental leave

Not recorded

140

130

***

thereof women

Not recorded

***

thereof men

Not recorded

***

Indicators: Employees

Workforce structure

Occupational health and safety

Continuing education and training

Diversity and inclusion

Insurance and retirement benefits for employees

Reconciling the demands of a career and family

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