People at Merck

The success of our company depends crucially on the dedication of our employees. We want to offer them framework conditions that meet their individual needs. This encompasses an exciting range of tasks and advanced training possibilities, furthering flexible forms of cooperation and a culture of mutual esteem and respect. Our objective is to create a working environment in which curiosity can best unfold.

A career with Merck is enriching – both from a professional and a personal perspective. It is important to us to create an inclusive work environment in which all employees have the possibility to maximize their potential. To support our company’s growth and innovation course, the focus of our human resources work is on furthering engaged people, capable talents and empowered leaders.

In line with the new development of our corporate brand in 2015, we also adapted our employer brand and launched it globally in May 2017. At the core, it is based on the passion, creativity and curiosity of our employees, through whom Merck has become a global science and technology company. We are convinced that curiosity leads to positive outcomes.

Our promise as an employer is thus ‟Bring Your Curiosity To Life.” We have formulated four core messages that characterize our employer brand and are applicable to Merck as a whole. They determine how we collaborate, how we advance our business, how our employees can develop within the company and who we are:

  • Experience the joy of curiosity
  • Foster fruitful partnerships
  • Fulfill your personal ambitions
  • Advance technologies for life

Overview of our headcount figures

As of December 31, 2017, we had 52,941 employees worldwide (2016: 50,414). In 2017, we were represented by a total of 217 legal entities with employees in 66 countries.1

1Merck also has employees at sites which are not fully consolidated subsidiaries. These figures refer to all people directly employed by Merck and therefore may deviate from figures in the financial section of this report.

Distribution of employees

by region

Driving innovation through engaged people

Our human resources work is founded on a company culture that values and motivates people and promotes the right framework conditions for innovation and engagement.

Regular global employee surveys

To strengthen employee retention and generate impetus for the future of our company, we pay special attention to honest and continuous feedback. Having used various methods to obtain feedback for many years, in 2016 we reintroduced our global employee survey. Based on the results, strategic focal topics were identified and corresponding initiatives derived. In October 2017, another employee survey was conducted in 22 languages and the status of implementation reviewed. Around 42,100 employees (84%) took part. Our Group-wide score, which shows how attached our employees feel to the company, was 59%. We are thus on a par with other pharmaceutical and chemical companies. As of 2018, these results will be incorporated across the Group.

Fostering innovative potential

Innovation is absolutely essential to the success of a science and technology company. Curiosity and a focus on new ideas provide a fruitful basis for innovation and have a positive impact on company performance. The modular Innovation Center in Darmstadt, which opened in 2015, offers our employees the opportunity to embrace new ideas and work on select projects in an inspiring environment. Sufficient scope and adequate support, also in the form of a suitable working environment, actively promote the innovative strength of our employees. Apart from initiatives to generate ideas and advance projects, the Innovation Center offers our employees various training courses on topics such as innovative methods, creative techniques and developing business models. Internal project teams, start-ups from our Accelerator program as well as many interested colleagues from various areas throughout Merck benefit from this offer. Recently, the training courses offered by the Innovation Center were digitalized, making them available to all employees worldwide.

Valuing cultural diversity

Our success is based on courage, achievement, responsibility, respect, integrity and transparency. These values determine how we perform our work daily, the way in which we approach challenges, as well as our dealings with customers, business associates and colleagues. Openness and respect characterize our company culture. The objective is to create a culture of mutual respect and esteem in which the strengths of a diverse workforce and individual differences are appreciated.

The Chief Diversity Officer and a council of high-ranking executives from all business sectors and select Group functions play a key role in strategically defining and managing our diversity and inclusion policies. Their work focuses on operationalizing the resolutions we passed in 2015 on the topics of diversity and inclusion. Key elements of this are recruiting people representing a breadth of qualifications, skills and experiences, developing and retaining them. In addition, we support specific employee networks in order to foster exchange among like-minded individuals. Apart from our women’s networks in various countries, we also support networks that promote the interests of the LGBTIQ community as well as Afro-­American and foreign employees.

In September 2017, the Group-wide Diversity Days were held for the sixth time with a campaign entitled ‟Different Perspectives”. Various events and activities took place to heighten awareness of diversity and inclusion among our workforce. Globally, employees in 32 countries across six continents took part in numerous events and shared their experiences on the intranet and in social networks.

As a global employer with intercultural expertise, people from a total of 131 nations work for Merck; 23.2% of our employees are German citizens and 74.9% work outside Germany. At our headquarters in Darmstadt, 11% of our staff comes from 89 different countries.

Women currently make up 43.1% of the workforce. However, the ratio of women to men varies widely across the different regions, businesses and functions. We are therefore working to raise the proportion of women wherever they are underrepresented, taking into account the situation typical for the industry as well as regional differences.

Demographic change is posing challenges in Germany as well as several other EU countries, the United States, and Japan. The average age of our employees is slightly more than 41. We assume that this figure will continue to rise in the coming years and are preparing for this situation. As part of our range of ‟Health and Well-being” offers, we specifically promote employee physical and psychological well-being. These offers vary from country to country and are adapted to local circumstances. In addition, we offer multifaceted continuing education throughout the entire professional careers of our employees.

In Germany, our company signed the Diversity Charter in 2013, the Equal Opportunity Charter in 2015 and the Inclusion Action Plan of the German Mining, Chemical and Energy Industrial Union (IG BCE) in 2017. By joining these initiatives, we underscore our commitment to fairness and tolerance at the workplace.

Furthering and asking more of talent

We endeavor to identify and develop the abilities of our employees early on. Our objective is to extensively further current and future employees and offer them interesting advanced training opportunities in order to prepare them for future and more challenging tasks.

A holistic recruitment approacH

When filling job vacancies, we pursue a holistic recruitment approach coupled with globally uniform and binding procedures. This starts with an internal job posting before external channels such as job portals and recruitment agencies are used. On the one hand, this process enables us to offer employees better development opportunities, and on the other hand it minimizes the costs of external recruitment. For employees with leadership responsibility, we offer targeted interview coaching to support them in selecting candidates and to establish uniform quality standards.

A globally accessible welcome portal is available to new employees in order to help them prepare for their new job at Merck and to support their onboarding phase. To further improve the onboarding process, various initiatives were started in 2017. For instance, supervisors, Human Resources and new employees can already exchange information and documents before the employee’s first day of work. In addition, all new employees are assigned an experienced colleague who can help them to familiarize themselves with the daily working routine. Our managers are also given detailed information such as onboarding plans and process descriptions to support them with this task.

Vocational training to recruit young people

In 2017, we again maintained a constant, high vocational training rate in Darmstadt, our largest site. A total of 535 young people were enrolled in apprenticeships in 23 different occupations at our headquarters in 2017. We give unlimited employment contracts to all apprentices working in occupations for which we have sustainable demand. On average, the post-apprenticeship hiring rate – taking voluntary terminations into account – was more than 90% over the past five years. We also offer vocational training at other sites in Germany, in which a total of 53 apprentices participated in 2017.

We promote the professional expertise of our apprentices through numerous regional and global project activities. In 2017, these included supporting a center for homeless children in South Africa. Furthermore, through our ‟Start in die Ausbildung” program, we help prepare young people who have not been able to find an apprenticeship. With a total of 20 young people between the ages of 16 and 25 in 2017, the number of participants was slightly lower than in the previous year. Although they have a school leaving qualification, they had been searching for an apprenticeship for at least one year without success.

Since 2016, we have also been working on a specially developed program to help refugees enter the job market. As part of the ‟Integrating refugees through training” program, a further group of 12 young people who were forced to flee their home countries started linguistic, technical, cultural, and job-specific training to prepare them for vocational training and thus for the labor market.

Targeted advanced training and maximizing ­performance capability

Our focus on systematic personnel development allows us to sustainably strengthen the performance potential within our company and to increase the motivation of our people. Only by expanding the abilities of each individual can we count on innovative and curious employees and managers in the future and flexibly respond to different requirements.

Employee development at Merck is founded on regular exchanges and a culture in which employees aspire to high levels of performance and engagement. As the basis for internal strategic talent management, the performance and potential management process is globally aligned for all employees in accordance with the same principles and is part of a shared IT system. We systematically combine talent recognition with performance assessments based on employee target agreements, as we are convinced that regular feedback helps all employees to grow in terms of their performance and potential. Regular individual assessments permit us to more readily identify high-potential employees and to further them accordingly. Clear objectives, differentiated and open feedback and individual development plans are thus important prerequisites for both the personal development of every individual and the success of the company. Through software-supported intensive analysis of our personnel data, we can identify the potential of talented employees early on, which helps to optimize our succession planning efforts and find even better matches for internal positions.

Global classroom training courses and workshops developed speci­fically for teams help our employees develop and build individual abilities in line with new requirements and perspectives. In 2017, more than 5,700 employees participated in global classroom training courses to prepare themselves for new opportunities and challenges. Digital solutions in the form of more than 4,000 e-learning and languages courses are available to our employees. To enable our employees to realize their full potential, we also provide local business- and function-related offers. All measures are documented in a development plan introduced globally.

Individual development opportunities are also supported by a new job architecture, which was introduced in 2017. It applies globally and enables us to harmonize all positions and to simplify their classification. This job architecture defines three fundamental and equivalent career paths: managers, experts and project managers. Employees who wish to advance in their careers and aim for a top position within the company can also do so via the expert and project manager career paths.

Building empowered leaders

One of the major duties of our leaders is to motivate and encourage employees to show their innovative strength. A dialogue in a spirit of partnership, the development of strategic competencies and the continuous further development of our leaders help to build trust and to strengthen our company’s success over the long term.

Strategic competency development

A transparent competency model is a further pillar of our personnel development efforts. Managers and employees should show strategic competence by being purposeful, future-oriented, innovative, results-­driven, collaborative, and empowering. By demonstrating these qualities, our leaders can build a strong culture of collaboration based on curiosity, creativity and trust. In addition, our leaders are expected to set an example, for instance by living the Merck values and taking responsibility for their own decisions. To assess the performance and potential of every individual and to establish an effective leadership culture, regular and differentiated feedback is of utmost importance. This way, employees and supervisors can develop a shared vision, execute the business strategy and further develop a unifying culture.

Personnel decisions based on data and facts

Digitalization and data-based decisions are also taking hold in Human Resources management at Merck, particularly with respect to the development and use of personnel management tools. With People Analytics, Human Resources has developed a modern, data-supported approach that features greater transparency and deeper insights into relevant personnel information from the businesses and Group functions. It is based on globally integrated data management and state-of-the-art analytics. People Analytics supports our managers with data and facts that can serve as the basis for major personnel decisions. This makes it possible to advise the company management more precisely and purposefully in its decision-making. People Analytics helps Human Resources to build strategic advisory capacities.

Additionally, we introduced predictive analytics based on the data now available, which enables us, for example, to identify factors that have a substantial impact on employee turnover.

Diversity and management

In order to manage our global and diverse organization, we need leaders who can build international teams and promote international cooperation so as to contribute to a productive and flexible working atmosphere. We seek managers whose inclusive leadership style also reflects different employee and customer traits. This opens up career opportunities for talented employees from all areas of our company and ensures a broad experience base as well as differentiated decision-­making.

At Merck, many teams work across sites and internationally. The diversity of competencies and experiences among the team members offers tremendous potential that our leaders can make use of. Internationality and a global mindset characterize our company culture and are therefore mirrored by our international management team. In 2017, 64.4% of our executives were not German citizens. Altogether, 65 different nationalities are represented in such positions. Our goal for the period until 2021 is to maintain the proportion of female leaders at a stable level of 30%, and we are working to further increase the representation of women in leadership positions and business units where they are still underrepresented. To achieve this objective, in 2017 we formed special teams that are responsible for developing goals and measures at departmental level to help us move female candidates into positions in different areas and hierarchies. At the end of 2017, women occupied 30.3% of leadership roles Group-wide. These figures are steadily increasing across the company as a whole, but not consistently across business units, Group functions and hierarchical levels. The report on stipulations to promote the proportion of women in leadership positions at Merck KGaA pursuant to section 76 (4) and section 111 (5) of the German Stock Corporation Act can be found in the Corporate Governance section of this report.

Management program for executives

We use targeted advanced training to further the professional career paths of our top talent and senior executives. One of the aims of the nine-month International Management Program is to promote global thinking among aspiring executives and to strengthen their leadership competencies. In cooperation with top international universities, the Merck University has been offering a multi-regional, modular program since 1999. To date, 373 members of top management have taken part. Furthermore, Merck cooperates globally with universities in order to support employees who wish to study for an MBA. In 2015, we launched the Growth Markets Management program for local people managers in India and Latin America, which focuses on business management and Merck-specific topics. This program is also offered in China as well as in Europe for the Middle East and Africa region, with participants from a variety of countries and regions such as Africa, the Middle East, Japan, and Russia. Moreover, in 2017 we ran the Managerial Foundation Program for new people managers in 21 countries with 917 participants, and the Advanced Management Program, which was attended by 179 experienced ­people managers in four countries.

In 2017, we once again expanded our workforce pool to internally fill management positions when they become vacant. The vast majority of management position vacancies were filled by internal candidates again in 2017. In addition, we recruited highly qualified external executives in order to add new perspectives to our long-­standing in-house expertise.

Differentiated solutions to support employee well-being

As an employer, we take on responsibility for the well-being of our people and offer a wide range of opportunities to optimize work-life balance and to protect their health and safety.

Fostering work-life balance

As a responsible employer, the physical and mental well-being of our employees is extremely important to us. To enable employees to plan their lives independently and to boost their long-term satisfaction, providing a flexible and health-oriented working environment is a special focus of our human resources work.

A healthy work-life balance is a crucial precondition for the performance ability and motivation of our people. That is why we offer our employees at many sites around the world flexible and innovative working models. The ‟mywork@merck” working model allows employees at the German sites in Darmstadt and Gernsheim to freely choose their working hours and location in agreement with their teams and supervisors. In addition, we also introduced ‟mywork@merck” for Merck Accounting Solutions & Services Europe GmbH, Merck Export GmbH, Merck Schuchardt OHG, Merck Selbstmedikation GmbH, Merck Versicherungsvermittlung GmbH and Merck Chemicals GmbH. Employees no longer record their time electronically and must only document their hours if they exceed their standard working hours within the agreed working time framework. At the end of December 2017, a total of 5,267 employees made use of this model. In 2017, 4.6% of our employees worldwide worked part-time, 10.7% of whom are men.

By offering information, advice and assistance in finding childcare, nursing care, as well as home and garden services, we help employees to reconcile the demands of their professional and personal lives. At various sites, employees benefit from childcare options that we subsidize. A daycare center has been operating at the Darmstadt site, looking after children between the ages of one and twelve for the past 50 years. The adjacent new building houses a nursery for up to 60 children between the ages of one and three years. During the orientation phase, our employees can make use of additional offices for parents at the daycare center premises. In addition, a good ratio of staff to children is important to us to reliably supervise the children.

A transparent and flexible employee reward system

At Merck, we reward the performance of every individual through appropriate and competitive total compensation. For years, we have been achieving this through global processes and programs that are supported by digital platforms. We also offer our managers flexible, market- and needs-oriented compensation tools. These support well-­informed decisions and thus provide comprehensible, performance- and position-based compensation. Apart from monetary compensation components, we also offer our employees attractive fringe and social benefits. Our ‟benefits4me” offer comprises three pillars:

  • Company benefits including a company pension
  • Health and well-being
  • Service offers

Worldwide, we offer various benefit packages to meet the different needs of our employees using well-established programs. Focusing more closely on individualized fringe and social benefits in the future will continue to enable our employees to individually choose those benefits that best meet their personal situation and stage of life.

A constant focus on health and safety

Workplace safety and health protection are a very high priority at Merck. It is especially important to us to do everything in our power to prevent workplace-related illnesses and accidents. We apply the lost time injury rate (LTIR) as an indicator to determine the success of measures aimed at accident prevention as well as occupational health and safety. This key performance indicator describes the number of workplace accidents resulting in lost time of one day or more per one million working hours. After having reached the goal of 2.5 that we had set in 2010, in 2015 we set ourselves a new, ambitious goal: By 2020 we intend to sustainably lower the LTIR to 1.5. With an LTIR of 1.5 in 2017, we attained this goal.

Since 2010, we have been using the ‟BeSafe!” program to further expand our occupational safety activities. Uniform standards as well as local modules to meet specific safety requirements at individual sites can help to improve conditions. The program focuses on engaging managers in the safety culture and building their buy-in; it aims to make safety an intrinsic value and empower our employees to take responsibility for their own safety. In 2017, we continued to sensitize our employees to workplace hazards through numerous awareness campaigns.

Since 2010, Merck has been presenting the Safety Excellence Award annually in order to underscore the importance of safety. It is granted to all production sites with no workplace accidents on record for the year; in 2017, it was awarded to 59 out of 97 sites.

36 KB EXCEL

OVERVIEW OF EMPLOYEE FIGURES1

Merck (overall) Dec. 31, 2015 Merck (overall) Dec. 31, 2016 Merck (overall) Dec. 31, 2017
Number of employees global, total 49,613 50,414 52,941
by region Asia-Pacific (APAC) 11,096 10,754 11,294
Europe 23,429 24,438 25,980
Latin America 4,352 4,140 4,050
Middle East and Africa (MEA) 942 1,045 1,097
North America 9,794 10,037 10,520
Number of employees (FTE - full-time equivalents) global, total 48,911.1 49,652.7 52,223.5
by region Asia-Pacific (APAC) 11,068.2 10,725.3 11,272.1
Europe 22,785.7 23,727.1 25,302.5
Latin America 4,344.2 4,136.5 4,046.2
Middle East and Africa (MEA) 940.6 1,041.8 1,096.1
North America 9,772.4 10,022.0 10,506.7
Number of countries 66 66 66
Number of legal entities global, total 211 215 217
Number of nationalities global, total 1222 129 131
Number of nationalities working in Germany 772 91 97
Percentage of employees with German citizenship 26.1%2 23.1% 23.2%
Percentage of employees working outside Germany 75.9% 75.3% 74.9%
Percentage of employees with global managers 8.1% 9.7% 10.2%
Percentage of women in the workforce global, total 41.6% 42.8% 43.1%
in Germany 38.2% 38.6% 39.1%
Percentage of women in leadership positions (= role 4 or higher)5 global, total 26.8%2 28.8% 30.3%
in Germany 27.3%2 28.7% 29.7%
Percentage of executives (= role 4 or higher)5 global, total 5.9%<2 5.7% 7.9%
Percentage of executives who are not German citizens 61.0%2 64.7% 64.4%
Number of nationalities 642 70 65
Number of apprentices in Germany 5063 5764 588<4
Vocational training rate 5.3% 5.1% 4.4%
Number of employees in the ‟mywork@merck” model (Germany) 4,122 4,507 5,267
Percentage of employees working part-time global, total 4.7% 4.7% 4.6%
Men 11.3% 10.6% 10.7%
Percentage of employees aged 17-29 years global, total 15.2% 14.7% 14.5%
Percentage of employees aged 30-49 years global, total 62.6% 62.5% 62.1%
Percentage of employees aged 50+ global, total 22.2% 22.8% 23.4%
Average age globally 41.1 41.3 41.4
Average age by region Asia-Pacific (APAC) 36.7 36.7 36.9
Europe 42.4 42.4 42.5
Latin America 39.5 39.9 40.3
Middle East and Africa (MEA) 39.5 39.3 39.4
North America 44.2 44.3 44.1
Germany 43 42.9 43
Average length of service global, total 10.0 9.9 9.8
Average length of service in Germany 14.4 14.2 14
1
Merck also has employees at sites which are not fully consolidated subsidiaries. These figures refer to all people directly employed by Merck and therefore may deviate from figures in the financial section of this report.
2
Excluding Sigma-Aldrich.
3
Relates only to Merck KGaA (around 19% of the workforce of the entire Group in 2015).
4
All Merck sites in Germany (around 25% of the workforce of the entire Group in 2016 and 2017).
5
Not including Sigma-Aldrich legal entities in Germany or Allergopharma.