Employees

The Volkswagen Group is one of the world’s largest employers in the private sector. As of December 31, 2017, the Group, including the Chinese joint ventures, employed 642,292 people, 2.5% more than at the end of 2016. The ratio of Group employees in Germany to those abroad remained largely stable over the past year. At the end of 2017, 44.8 (44.9)% of employees worked in Germany.

Human resources strategy and principles of the human resources policy

With the new human resources strategy “Empower to transform”, the Group is continuing with key and successful approaches of its human resource management. These include the pronounced stakeholder focus in corporate governance, comprehensive participation rights for employees, outstanding training opportunities, the principle of long-term service through systematic employee retention and the aspiration to appropriately balance performance and remuneration. At the same time, the new human resources strategy is setting innovative trends. Hierarchies are being dismantled and modern forms of working such as agile working – whereby most responsibility for the work organization is transferred to the teams – are set to be expanded. In the future, cooperating robots will ease heavy physical work in factories and digital processes will simplify administration. The Company’s human resources strategy is based on five overarching objectives:

• The Volkswagen Group aims to be an excellent employer with all of its brands and companies worldwide.
• Highly competent and dedicated employees strive for excellence in terms of innovation, added value and customer focus.
• A sustainable work organization ensures optimal working conditions in factories and offices.
• An exemplary corporate culture creates an open work climate that is characterized by mutual trust and collaboration.
• The Company’s human resources work is highly employee-oriented while also aiming for operational excellence and providing strategic value-added contributions.

To implement its human resources strategy, the Volkswagen Group will roll out a Group-wide diversity management system, among other programs, in the course of 2018. Varying cultural conditions in the global markets and growing economic momentum demand from Volkswagen an ever-broader range of experience, world views, problem solutions and product ideas. The diversity of our staff offers great potential for innovation in this area, which we aim to make better use of in future. Mandatory rules on the percentage of women in management, combined with targets for the internationalization of senior management, are at the heart of diversity management at Volkswagen.

In line with its corporate strategy, the Volkswagen Group is also driving the transformation in other fields. For example, various cultural change initiatives are concerned with reinforcing flatter hierarchies, a more open form of collaboration and a greater focus on the big picture within the Company’s divisions.

The human resources development system was completely revised in 2017 and now offers more transparent paths into management based on greater individual responsibility. The Company’s management principles were also revised and new criteria for appointments defined.

TOGETHER – Strategy 2025 is also accompanied by new strategic indicators.

For the passenger car-producing brands, we compile and analyze the following information:

• Internal employer attractiveness. The indicator is determined by asking respondents, as part of the Group-wide opinion survey, whether they perceive the respective company as an attractive employer. The target for 2025 is 89.1 out of a possible total of 100 index points. A score of 85.2 index points was achieved throughout the Group in the reporting period.
• External employer attractiveness. The ability to recruit top talent is of decisive importance, particularly in view of the Company’s transformation into a world-leading provider of sustainable mobility solutions and the associated development of new business units. Once a year, we check the positioning of the major passenger car-producing brands on the labor markets for graduates and young professionals using of this strategic indicator. Rankings in surveys by renowned institutions, in which we aim to achieve top scores for all Group brands, serve as the basis for this.
• Diversity index. As we establish diversity management across the Group, this strategic indicator for the active workforce is used worldwide to report the development of the proportion of women in management and the internationalization of senior management. In particular, it underpins the objective of the human resources strategy, which is aimed at contributing to an exemplary leadership and corporate culture. In 2017, the Group-wide percentage of women in management was 13.8%. We aim to achieve a target of 20.2% by 2025. We aim to increase the level of internationalization in senior management, the uppermost of our three management tiers, from 18.7% in the past fiscal year to 25.0% in 2025.

In the truck and bus business, we look at the opinion survey and cross-brand exchange of employees to identify how well strategic targets are being achieved:

• Opinion survey. The sentiment rating is used to determine the level of employee satisfaction and identification with the company. The sentiment rating is calculated as the average score from of all responses regularly submitted as part of the opinion survey. The result in 2017 was in line with the previous year’s level.
• Cross-brand exchange and rotation. The aim is to continuously intensify collaboration between the commercial vehicle brands. It is also designed to enable the creation of specialist and international networks. We use this indicator to analyze how many employees have worked at another brand through such rotation. An increasing number of staff took advantage of this personnel development opportunity in 2017.

One strategic indicator has been defined for the financial services business:

• External employer ranking. This involves taking part in an external benchmarking exercised every two to three years. The aim is to enhance working conditions and identify measures to become a top-20 employer by 2025, not just in Europe, but globally. Volkswagen Financial Services AG was most recently represented in various national and international best-employer rankings in 2016. In 12^th place, it was among the top European employers in the “Great Place to Work” employer competition.

EMPLOYEES BY CONTINENT
in percent, as of December 31, 2017