Report of the Directors
Business Review

Building a Sustainable Workforce

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Recruiting the right people, developing them and providing an environment which motivates them to contribute and stay with the company is fundamental to the group’s long term performance. At Johnson Matthey, our employees are respected as the group’s most valuable resource and play a vital role in building a sustainable business. Their skills, qualities and wellbeing underpin the company’s success.

We recognise that our people and culture are a particular strength and, although the culture of an organisation is not easy to define, there is a distinctive culture in Johnson Matthey, irrespective of division, business, function or geographic location. Capturing and drawing on the strengths of our culture will support the group’s future growth, particularly as it continues to expand globally. During the year work commenced to better articulate our company values and explore how they can be best used to develop and grow our business and our people.

Recruitment and Retention

Johnson Matthey has effective recruitment processes to support the regular requirement for high calibre employees. Increasingly, we are recruiting graduates and qualified employees from beyond our traditional bases in Europe and North America as we continue to develop a more internationally diverse workforce to support our global business.

Recruiting well qualified staff is vital to support business development, particularly in new and emerging markets such as in Asia, and this is achieved by appropriate manpower planning, local recruitment and the encouragement of international and cross divisional mobility. It is the group’s policy to promote from within wherever possible and in 2011/12 35% of vacancies were filled by internal candidates, supporting the retention of employees and developing their careers.

During the year we have improved our online global recruitment systems for external candidates, including the launch of a new application management system for recruitment into our UK businesses.

We have also reviewed the careers section of the company’s website and continue to develop it with a focus on increasing awareness of the company and candidate attraction. There are also plans to expand our activities via key social media channels to further support our global recruitment activities.

The average number of employees has increased by 6% this year with continued growth in average employee numbers in Asia (up 11%) and a 9% increase in North America. As illustrated in the pie chart to the right, Environmental Technologies remains the group’s largest division with over 50% of employees. In 2011/12, average employee numbers increased across all divisions.

Average Number of People Employed

Average headcount 2011/12

Region Permanent
employees
Temporary
contract
employees
Total
Europe 4,868 174 5,042
North America 2,839 13 2,852
Asia 1,344 63 1,407
Rest of World 611 2 613
Total group 9,662 252 9,914

Annual Change in People Employed

Net change between 31st March 2011 and 31st March 2012

Region Permanent
employees
Temporary
contract
employees
Total net
change
Europe +145 +10 +155
North America +271 -29 +242
Asia +107 +28 +135
Rest of World -8 +2 -6
Total group +515 +11 +526

Maintaining the quality of our employee relations is a priority for the company and Johnson Matthey is proud of the high level of commitment and loyalty from its people. We have a low voluntary staff turnover, 6.4% in 2011/12 (2010/11 5.6%), with many employees staying with the company for their whole careers. Total employee turnover increased this year from 8.5% to 11.7% as a result of the closure of our site in Brussels, redundancy programmes in South Korea and more proactive performance management in a number of other countries. The table below sets out employee turnover in 2011/12 by geographical region. The employee turnover figure is calculated by reference to the total number of leavers during the year expressed as a percentage of the average number of people employed during the year. The analysis does not include agency workers not directly employed by Johnson Matthey.

The group’s employee turnover over the past five years is illustrated in the graph above and shows that voluntary employee turnover has remained steady.

Good performance in attendance rates was maintained this year. The average number of days lost per employee in 2011/12 due to sickness absence was 5.0 days (2010/11 5.2 days). This represents 2.0% of lost time per employee in the working year, a slight improvement on last year. We continue to invest in sustainable health and wellness programmes to support the longer term health, wellbeing and performance of our employees.

Employee Turnover by Region

2011/12

Region Total
leavers
Employee
turnover
Voluntary
employee
turnover
Europe 592 12.2% 4.8%
North America 226 8.0% 4.7%
Asia 243 18.1% 14.9%
Rest of World 65 10.6% 8.5%
Total group 1,126 11.7% 6.4%
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