How We Manage Talent Acquisition and Development
Our Employment Policy upholds our principles of non-discrimination and fair employment. The Senior Vice President Corporate Human Resources is responsible for the development and delivery of the HR strategy. The strategy aims to reduce natural turnover by attracting the right people to SGS, rewarding them appropriately and helping them to achieve their career goals. HR professionals across the business work in partnership with business managers and operations to support business priorities.
Our HR Principles support the HR strategy by ensuring a consistent approach to the way we acquire, manage, develop and retain talent across the business.
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We seek talented, professional and creative people. We select people based on a combination of skills, competencies, experience and motivation using a systematic approach to short-listing candidates and conducting competency-based interviews. In 2014, over 1,700 people joined the Group. We also collaborate with universities, participate in on-campus job fairs and invite graduates and undergraduates to visit our facilities.
The SGS employer brand helps us to communicate to internal and external audiences what distinguishes us as an employer. During 2014, we deployed our employer branding in 30 countries, representing 83% of our highest recruitment areas, using a targeted communications campaign involving managing directors, HR managers and employees.
During 2014, we subscribed to a cloud-based recruitment service, enabling us to recruit top performers with the right talent skills and alignment to our company values and employer branding. The service collects relevant information posted by candidates, and issues alerts for jobs in areas of the company they are most interested in. By the end of 2014, 16 affiliates were active in using the platform, resulting in some 22,092 candidates applying for jobs.
As part of our commitment to using e-recruitment to promote our employer branding and boost our recruitment potential, SGS forged a strategic partnership with the business-oriented social network, LinkedIn in 2014. Through this arrangement, SGS has the capacity to post up to 600 jobs at any time, working with carefully selected recruitment agencies who are granted licenses to act on behalf of SGS. (See 2014 Sustainability Review for more detail.)
Building a talent pipeline
We offer opportunities for graduates and undergraduates to work alongside professionals on challenging client-based projects across a range of industries. We also provide targeted, regional training programs in key disciplines. For example, our HR Discovery Pass, launched in 2012, aims to build a talent pipeline in HR management. High-potential HR professionals are recruited to complete six-month assignments in three company locations around the world. The aim is to develop their skills and enhance their knowledge of diverse cultures and businesses within SGS in order to actively contribute to the company’s ongoing success. (See case study in our 2014 Sustainability Review to find out how we are working with high performing students to help build our talent pipeline in China.)
SHINE is our global onboarding program for new recruits. It takes a structured approach to making a significant, positive impact within the first six months of an employee’s journey at SGS. The program, supported by managing directors, HR, line managers and peer advisors, aims to make every new employee feel that they are supported in their role and are engaged in the company’s principles, values and business aims. Welcoming employees to our company in this way helps them to settle in more quickly and enables them to fulfill their objectives.
Through our monitoring of employee satisfaction in the period 2013-2014, we can report that 89% of employees responding to our SHINE feedback survey were satisfied or highly satisfied with their onboarding experience.
Learning and development
Our global learning and development strategy uses a collaborative approach to helping our people to reach their full career potential while delivering high performance business results. Our programs are designed to equip employees to meet customer requirements and our own standards. A combination of corporate-led and locally-developed programs are used to develop employee, manager and leadership competencies using vocational, technical and compliance training which ensure that our employees retain necessary certifications and qualifications as part of their continuing professional development. A combination of corporate-led and locally-developed programs are used to develop employee, manager and leadership competencies.
During 2014 we invested more than CHF 14 million on learning and development. Our L&D approach is changing, given advances in technology-based learning platforms and the spread of our employees, a number of whom work in remote locations. We are transitioning away from classroom learning for many programs to virtual learning delivered through e-learning modules, videos and cloud-based applications. This approach is more cost effective, reduces the need for employee travel to training courses and promotes a better work-life balance. Given this, a more meaningful measure of our investment in training than spend per FTE is the hours spent on training per FTE. During 2014, 40 hours were spent on average by each employee on training and development.
During 2014, we identified the need to revise our leadership development program. Feedback from the Operations Council members indicated a gap between the skills managers acquired through participation in leadership development courses and their readiness to mobilize these skills at a leadership level. Our new critical talent program will focus on high potential and high performing managers and technical experts; people we identify as having ‘critical talent’. We aim to develop talented leaders within SGS through effective high level succession planning that creates more visibility of critical talent across our global network among members of the Operations Council. Managers identified as critical talent will have structured development plans, based on global core leadership competencies, with defined objectives. 70% of these plans will focus on learning on the job, 20% will focus on stretched assignments, and 10% will focus on continued learning and evidence of this through the delivery of successful business outcomes. During 2015, we will pilot the critical talent program in selected regions, identifying up to 20 people in each pilot region. We will provide an update on the program’s development in our 2015 report.
Alongside our revised critical talent program, we aim to revamp our management development program, Manager Passport. We will design a competency-based framework to enable affiliates to develop their own programs around specific business and geographical needs. Mirroring our critical talent program, the management development program will involve structured development plans with defined objectives. We will draw on the excellent work being undertaken in our affiliates. For example, in North America, managers have been involved in shaping their individual development plans, and in the Philippines, managers are evaluated using 360 degree profiling. We plan to pilot the new management development program in 2015. Alongside this, our affiliates continue to deploy programs based on the Manager Passport.
SGS has, since 2010, provided sustainability learning to new and existing employees via e-learning modules. During 2014, we updated the content of our sustainability learning program and will launch a series of short videos starting in early 2015. These will introduce employees to what sustainability means at SGS and will focus on individual topics such as energy efficiency in buildings and carbon neutrality. We will also launch a video based on our 2014 Sustainability Review.
Annual performance reviews
Managers and supervisors are expected to conduct a formal dialogue with employees every year to review performance in relation to their job description, expectations and goals. Training, guidance and on-line tools are provided to managers and supervisors to ensure that employee performance is fairly assessed and to ensure a consistent approach. In 2014, 67.3% of employees received regular performance reviews.
Feedback from employees through our 2014 CATALYST survey indicates there is more to be done to provide employees with feedback to help them achieve their growth and development potential within SGS. Just over half of employees agree that they can achieve their career goals at SGS, and feel that there is a promising future for them at SGS. This suggests that employees need greater clarity on what their future may hold at SGS, and better understand what potential career paths may be available.
In 2014, SGS paid CHF 2.9 billion in salaries and wages. SGS offers competitive remuneration and benefits to employees. Our standard entry-level salary rates are set by business lines and regions, and are equal for men and women. Thereafter, salaries are influenced by various factors including relevant experience and performance, the local labor market and local regulations.
Remuneration is benchmarked across industries and geographies to ensure internal consistency and external competitiveness. While we do not use external consultants to give their advice on specific cases, remuneration is determined by factors such as external remuneration benchmarks and cost of living indices at country level.
We provide competitive and industry-appropriate benefits to all part-time and full-time employees on permanent contracts. These are largely determined at affiliate level. In Geneva and other locations worldwide (such as Australia, USA, France, Taiwan, Canada, South Africa, Ghana and Brazil), benefits including retirement plans, healthcare benefits and disability and life plans, as well as emergency evacuation on medical and security grounds while travelling on business, are provided to full- and part-time employees on permanent contracts.
The financial contribution of our sustainability performance, as measured through our Green Book, directly impacts our operational efficiency which is linked to the bottom line. Bonuses are paid based on the profitability of the business, as measured at local level. Employees are rewarded for their contribution through performance-related pay and variable remuneration such as incentive plans. Executive remuneration is awarded in line with long-term company and shareholder interests and is approved by the Nomination and Remuneration Committee. In addition to an annual performance-related bonus, the Board of Directors and the Committee may grant discretionary cash bonuses to reward exceptional personal achievements.
As a performance led organization, we value feedback from employees. CATALYST, our employee engagement program introduced in 2012, operates in 30 countries and is being further expanded in 2015. Through the annual survey, employees are encouraged to share confidential feedback on our strengths and the areas for improvement at organization, team and leadership levels. The findings help us to gage the level of employee engagement over time, celebrate success, prioritize issues, allocate resources and drive business performance. In 2014, more than 44,000 employees were invited to participate in CATALYST and 83% (representing around 36,000 employees) responded to the survey. This was the first year that all regions took part, with affiliates in Argentina, Brazil and Chile, Hong Kong, Ivory Coast, Kenya, the Philippines, Romania and Spain taking part for the first time. The survey, comprising 52 questions (including new questions in 2014 linked to integrity, security and customer service), uses two defining indices: an Employee Engagement Index (EEI) – which measures the extent to which employees are motivated to contribute to organizational success – and a Performance Excellence Index (PEI) – which measures the extent to which employees believe the company is committed to excellent customer service and organizational excellence. By ranking both indices against global norms, our 2014 findings show that our EEI (at 64%) and PEI (at 70%) are similar to our 2013 findings despite a larger population being surveyed, and are slightly below external norms. Our Sustainability Engagement Index (which is unique to SGS) continues to show a high level of employee engagement in our sustainability program, with 75% of employees recognizing the role that sustainability plays in supporting our business aims and a similar proportion understand what sustainability means to their role and how they can actively contribute to our sustainability performance.
See our 2014 Sustainability Review for more detailed information on CATALYST.
Employee representation and consultation
Collective bargaining agreements exist in most of the countries we operate in. We strictly adhere to tariff structures and collective bargaining agreements negotiated with trade unions. In countries where freedom of association or collective bargaining is restricted by law, we facilitate parallel means of independent and free association and bargaining. In 2014, 21.84% of our employees were covered by collective bargaining agreements. We recognize the need to inform and consult employees on relevant business activities. For example, we respect statutory minimum notice periods and give reasonable notice of any significant operational changes in line with local practices and labor markets. Minimum notice periods are specified in collective bargaining agreements between SGS and trade unions or employee works councils.
Our affiliates operate communications and consultation processes tailored to local needs. Within the European Union, the SGS Euroforum ensures constructive dialogue with elected employee representatives on relevant transnational issues. During 2014, a series of questions were posed to management by Euroforum members on behalf of employees in their affiliates. These broadly related to three core themes: business strategy, leadership and principles; people management; and improving systems and processes.
(See our section on stakeholder dialogue in our online report for more detail on this consultation and the responses from management to the questions posed at the Euroforum.)
During 2014, teams across SGS participated in the Global Corporate Challenge (GCC). Aimed at reducing stress, encouraging team spirit and improving the health and wellbeing of employees, the Challenge was an opportunity to help address the upward trend in sickness absence in certain areas. More than 2,580 employees formed 369 teams across 34 countries and stepped their way to improved physical and mental shape over 16 weeks. With a daily average of 15,044 steps, employees reported a more positive attitude to exercise, 59% stated they had lost weight; and 78% felt that increased activity levels had become habitual. 82% exceeded more than 10,000 steps per day (compared to only 23% pre-GCC) and 93% of employees say that they would participate in the GCC again.
Monitoring employee natural turnover
Our Green Book provides senior managers with detailed analysis of the financial impact of our sustainability performance using a range of sustainability indicators, including natural turnover. By reporting comparative performance across affiliates, the Green Book identifies notable ‘hot spots’ which may impact the bottom line if they are not effectively managed. A number of affiliates are actively using the Green Book to inform strategies aimed at tackling employee turnover. (See the case study in our 2014 Sustainability Review on how SGS Indonesia is addressing its employee turnover ‘hot spot’.)