Report of the Directors
Business Review

Building a Sustainable Workforce

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Training and Development

The knowledge, expertise and contributions of our employees is what drives the business forward and as a result, employee development is a key element of Johnson Matthey’s strategy for future growth. We offer training and development programmes at career foundation and management levels which seek to offer a broad understanding of the group’s businesses, give a strong base in the company’s strategy, culture and ethics and provide direct contact and networking opportunities with peers and senior managers across international boundaries. Our programmes are aimed at developing our talented people, encouraging commitment to the company and building high level skills and competences.

Training Days and Spend on Training

2011/12

Region Total days /
shifts training
Number
of days /
shifts training
per permanent
employee
Total
training
spend
£ thousands
Spend per
permanent
employee
£
Europe 15,140 3.1 2,021 415
North America 6,043 2.1 527 186
Asia 4,543 3.4 490 365
Rest of World 3,947 6.5 197 322
Total group 29,673 3.1 3,235 335

We are continuing to increase our focus on learning and development across the group and are expanding activities and resources on a global basis. Our sustainability awareness training has been rolled out in our major regions and we are developing a more in depth induction programme which will be launched in 2012/13. A number of new programmes have been introduced during the year, both across the group and within our businesses, underpinned by our key themes of acting globally, people and culture, sharing good practice and increasing business understanding. We have particularly increased our focus on management and leadership development and on coaching and mentoring to support and develop our staff.

The group’s Manufacturing Excellence programme, which was launched in 2011/12, places particular emphasis on developing our manufacturing leaders and on providing our manufacturing staff with improvement tools to implement and embed a culture of lean manufacturing. Specific training modules are being developed to target key employee groups and encourage the sharing of best practice across our global manufacturing operations.

Talent reviews and succession planning are instrumental throughout our businesses and we have robust review processes in place to support the international recognition and development of management talent within the group.

In 2012/13 a new development programme aimed at senior leaders in Johnson Matthey will be introduced which will provide world class development support to further build leadership capacity in line with our strategy for growth.

Johnson Matthey is a strong supporter of apprenticeship schemes as a valuable route for training and developing new talent. Programmes operate at a number of our facilities around the world and during 2011/12 several of our businesses have introduced or expanded their schemes. In the UK this year, the company and its apprentices have received recognition from government and other organisations for their commitment and contribution to apprenticeship schemes.

The table above sets out, on a total and on a per employee basis, the days of training and training spend during 2011/12. The figure to the right shows the total training spend per employee over the past five years. The training spend does not include the cost of in house training or the cost of employees’ wages during training.

The level of training activity across the group has risen this year as indicated by an increase in the number of days / shifts training per employee which is up from 2.6 in 2010/11 to 3.1 in 2011/12. Although the group’s overall external training spend per employee has decreased this year, spend per employee in Asia has more than trebled, reflecting the increased focus on employee development in the region. Our strong and continuing commitment to the training and personal development of all our employees is reflected in the fact that during 2011/12, approximately 690 internal promotions were actioned. This represents 35% of all appointments made in the year.

Diversity

At Johnson Matthey we recognise the importance of diversity, including gender diversity, and the benefits this can bring to our organisation. With regard to gender diversity specifically, Johnson Matthey faces challenges similar to those faced by other organisations in the chemical, technology and manufacturing sectors.

To address these, we have policies and processes in place which are designed to support gender diversity in employee recruitment, development and promotion and we are committed to ensuring that women have an equal chance with men of developing their careers within our business. We encourage gender diversity at the early career stage by working outside Johnson Matthey to encourage women to enter scientific and industrial fields. The board is in the process of reviewing the broad question of diversity within the group.

In accordance with applicable law, Johnson Matthey bases all employment related decisions on the principles of equal employment opportunity and our policies in this area are presented in the Governance and Sustainability section and the website.

The group’s gender balance was unchanged this year at 78% male and 22% female although the gender balance of new recruits is improving at 75% male and 25% female.

Employee Relations and Communication

Effective two way communication with employees and, in particular, face to face dialogue, is important in embedding company culture, building commitment, celebrating achievements and increasing understanding of the business, its performance and strategy. Communication on matters of interest to employees is exchanged through in house magazines, attitude surveys, regular news bulletins, presentations to staff and team briefings. Employees are also encouraged to access the group’s corporate intranet, sustainability intranet and websites.

Encouraging communication between employees is becoming increasingly important as Johnson Matthey continues to expand its range of business activities and its geographic locations. Encouraging better communication between our people will help to promote exchange of ideas and best practice, expedite research and development and support the embedding of corporate culture. Although our company operates as separate businesses within our three divisions, there are common activities and themes which run throughout the group. Our Manufacturing Excellence programme is one example where success is highly dependent on engagement and communication between employees. More generally, the group recognises the value of such exchanges and projects are underway to provide enhanced internal systems that support improved communication across our global operations.

Employee involvement is a critical factor in the development of an improvement culture. Employees at all levels are making a major contribution to the success of our many sustainability and lean manufacturing initiatives around the world which provide an excellent opportunity for staff engagement and development.

The company continues to support employee share ownership and employees have the opportunity to participate in share ownership plans, where practicable. Under these plans, employees can buy shares in the company which are matched by a company funded component. Employees in six countries are able to contribute to a company share ownership plan or a 401k approved savings investment plan. Through these ownership plans Johnson Matthey’s current and former employees collectively held 1.77% of the company’s shares at 31st March 2012.

Johnson Matthey also sponsors pension plans for its employees worldwide. These pension plans are a combination of defined benefit and defined contribution pension arrangements, savings schemes and provident funds designed to provide appropriate retirement benefits based on local laws, custom and market practice.

Johnson Matthey continues to maintain good and constructive relations with all recognised trade unions which collectively represent 35% of all group employees worldwide (2010/11 38%). The following table sets out the average number and percentage of Johnson Matthey’s employees who were covered by collective bargaining arrangements and represented by trade unions by geographical region in 2011/12. During 2011/12 no working time was lost within the group due to employee action.

Trade Union Representation

Average headcount 2011/12

Region Permanent
employees
Represented %
represented
Europe 4,868 2,194 45%
North America 2,839 558 20%
Asia 1,344 306 23%
Rest of World 611 337 55%
Total group 9,662 3,395 35%
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