Report of the Directors
Business Review

Building a Sustainable Workforce

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Recruiting the right people, developing them and providing an engaging environment which motivates them to contribute and stay with the company is fundamental to the group’s long term performance. At Johnson Matthey, we believe that it is our employees who make the difference to the company’s success. Their skills, qualities and wellbeing play a vital role in building a sustainable business.

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 very 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. Work has continued this year to articulate our company values and understand how they can be best used to develop and grow our business and our people.

Attracting and Retaining the Best People

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 2012/13 36% of vacancies were filled by internal candidates, supporting the retention of employees and developing their careers.

We have continued to improve our recruitment processes on a global basis to ensure that we are well placed to recruit high calibre employees in all our regions. Over the past 12 months we have developed our online presence, including through the use of digital / social media. We have launched a Facebook page focused on graduate recruitment which aims to give potential candidates a feel for what it is really like to work at Johnson Matthey. We are also developing opportunities for better candidate attraction and engagement and have launched a careers page with vacancy advertising on LinkedIn aimed at the skilled professionals market. Both of these social media tools are already encouraging interest in our business and have enabled us to engage with thousands of followers to date. Recognising the value of a range of media in communicating our message, we have also posted short video interviews with some of our UK graduates on our website. These have received positive feedback and we plan to continue to build our library to include graduates from across Johnson Matthey’s global operations.

We have recently launched a global graduate rotation programme and during 2012/13, the first intake joined Johnson Matthey. Targeted at high calibre graduates, it gives participants experience of roles in a number of different businesses in different locations across Europe, the USA and Asia. We aim to continue this programme to create a talent pipeline of employees with a broad understanding of our global businesses. On a regional level, we plan to launch a graduate rotation programme in India during 2013/14 with the first intake scheduled to start in July 2013.

The average number of employees has increased by 6% this year with average employee numbers up 5% in Asia and North America and 7% in Europe. As illustrated in the pie chart to the right, Environmental Technologies remains the group’s largest division with 57% of our employees. In 2012/13, average employee numbers increased across all divisions.

Average Number of People Employed

Average headcount 2012/13

  Permanent
employees
Temporary
contract
employees
Total
Europe 5,184 232 5,416
North America 2,958 47 3,005
Asia 1,416 59 1,475
Rest of World 601 1 602
Total group 10,159 339 10,498

Annual Change in People Employed

Net change between average headcount 2011/12 and 2012/13

  Permanent
employees
Temporary
contract
employees
Total
net
change
Europe +316 +58 +374
North America +119 +34 +153
Asia +72 -4 +68
Rest of World -10 -1 -11
Total group +497 +87 +584

Maintaining the quality of our employee relations is a priority for the company and the high level of commitment and loyalty from our people continues to bring strength to our business. We have a low voluntary staff turnover, 6.5% in 2012/13 (2011/12 6.4%), with many employees staying with the company for their whole careers. Total employee turnover reduced this year to 9.1% compared with a turnover of 11.7% in 2011/12 which was impacted by the closure of a manufacturing site in Brussels. The reduction in voluntary employee turnover in Asia (from 14.9% in 2011/12 to 13.0% in 2012/13) is encouraging, given that we have been increasing our employee development and engagement efforts in both India and China over the last two years. The table below sets out employee turnover in 2012/13 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 permanent employees. The analysis does not include agency workers not directly employed by Johnson Matthey.

Employee Turnover by Region

2012/13

  Total
leavers
Employee
turnover
Voluntary
employee
turnover
Europe 398 7.7% 5.5%
North America 217 7.3% 4.4%
Asia 222 15.7% 13.0%
Rest of World 87 14.5% 10.6%
Total group 924 9.1% 6.5%

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

Steady performance in attendance rates was maintained this year. The average number of days lost per employee in 2012/13 due to sickness absence was 5.2 days (2011/12 5.0 days). This represents 2.2% of lost time per employee in the working year, slightly higher than last year. We continue to invest in sustainable health and wellness programmes to support the longer term health, wellbeing and performance of our employees. Many of our businesses have made arrangements for employees to have access to flu vaccinations, discounted rates at local health clubs and stress awareness training. Further examples of health related initiatives at our operations around the world are presented in the Case Study on “Take a Flight of Stairs for our Health” and the Case Study on ‘Active Breaks’ Preventing Bad Backs at Redwitz.

Johnson Matthey runs a range of employee development programmes including GO JM, a group orientation programme for recently recruited graduates.

Employees discuss progress at a team meeting in our Emission Control Technologies business.

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