Sustainability Report 2021

Attractive employer

TAG overview

A culture that gives employees a strong sense of belonging is a driving force of our business. Our workplace embeds our values, balances flexibility and focuses on performance, trust and empowerment. This not only increases our employees’ productivity, but also creates a competitive advantage to attract potential candidates to join our company while retaining our existing talent.

Our approach to being an attractive employer

Attracting and retaining talent

We believe that curiosity can make great things happen. We therefore aim to provide an environment that gives our employees plenty of scope for creativity and sparks their desire to innovate. Our employer brand communicates this mindset to the outside world. Through our slogan “Bring Your Curiosity to Life”, we show applicants what they can expect and what they can contribute when they join our company.

Diversity, equity and inclusion are integrated in our attraction and selection activities. We train our recruiters to avoid unconscious bias during interviews and ensure that all new employer branding campaigns follow diversity criteria.

In 2021, we started using a new technology to support gender-neutral language, for example when creating job advertisements. Additionally, we included a dedicated “diversity” section in our interview guide, helping hiring managers to keep inclusivity top of-mind.

We work across countries to understand cultural norms that allow our colleagues to bring their best self to work. Attracting applicants with diverse backgrounds remains a top priority for us because we believe this gives us a competitive advantage as we expand our employee base.

Employee engagement

We seek to understand the needs of the people and therefore regularly conduct employee surveys, both Group-wide and within selected countries, individual business sectors or specific projects. These surveys are an integral component of our corporate feedback culture. They facilitate open communication between managers and employees to identify improvement opportunities and showcase areas where we have listened, learned and evolved.

Work and life in balance

We understand the importance of balancing the demands of work and personal life to ensure a productive and motivated workforce. We focus on creating the best possible working conditions for our people. This includes physical, mental and financial well-being, combined with flexible working options. In many countries, our employees can already set their own working hours by making use of part-time working models adapted to local requirements. In Brazil, Germany, India, and the United States, where around 53% of our workforce is based, we offer parental leave conditions that exceed the respective minimum statutory requirements.

Roles and responsibilities

The Human Resources (HR) department is responsible for advising all business sectors and Group functions on matters concerning our human capital. The HR team addresses the needs of our employees, organizational topics and company culture. Across all our sites, HR employees work together with leaders from various functions and business sectors to employ strategies to engage our people in line with Group-wide HR guidelines and requirements, including attractive compensation models and benefits. Every two to three years, we carry out internal audits to check that the guidelines are being implemented.

The Chair of the Executive Board and CEO is responsible for Group Human Resources. Our Chief HR Officer, who leads the HR function and oversees all our HR activities, including Diversity, Equity & Inclusion (DE&I), reports directly to her. Our Business Services unit oversees the operational tasks of human resources work, such as drafting contracts and payroll accounting. The Chief Financial Officer has responsibility for this unit.

The Engagement and Inclusion unit within our HR organization is responsible for employee engagement, diversity, equity, and inclusion and also develops and manages our employee surveys.

We include local employee representatives in our company’s decision-making processes. In Germany, ten of our subsidiaries have works councils and 26 of our subsidiaries across eight other European countries have employee representative bodies (Austria, Belgium, France, Ireland, Italy, the Netherlands, Spain, and Switzerland). In Germany, 58% of all employees are covered by collective agreements (13% of our workforce).

In Germany, local works councils and the Group works council represent our employees, regularly discussing topics such as compensation, working hours and organizational realignments. The Senior Executives Committee promotes the interests of our senior leaders in Germany and meets on a monthly basis. The Euroforum represents our employees at the European level. Focusing on the economic situation, employment rates and significant changes within our Group, this body covers all EU countries, as well as Switzerland, Norway and the United Kingdom, although not all countries have their own delegates. A regular exchange and an annual meeting of the Euroforum delegates also take place.

Our commitment: Group-wide policies and guidelines

We are dedicated to upholding the appropriate and fair labor and social standards stipulated in our Group-wide Social and Labor Standards Policy. It complements the provisions of our Human Rights Charter and our Code of Conduct with respect to labor and social standards. These include the fundamental Conventions of the International Labour Organization (ILO), which cover freedom of association and collective bargaining, forced labor, child labor, anti-discrimination, equal opportunity, equal pay, working hours, occupational health and safety, and the prevention of abuse and harassment. The Social and Labor Standards Policy outlines that we do not tolerate any form of discrimination, physical or verbal harassment or intolerance in the workplace. In this way, it creates the framework for fair and respectful interaction. We conduct internal audits to ensure that our local subsidiaries comply with these principles.

We are continuously evolving our approach to when, where and how we perform our work. Our focus is on flexible hours, remote working, job sharing, and part-time working models.

In the majority of the countries in which we operate, local flexible working policies are being rolled out. These policies reflect both legal requirements as well as agreements with works councils, if applicable. Depending on the area of activity and in agreement with their supervisors, employees will be able to adopt a hybrid working model in line with their local flexible work policy. This enables them to divide their work time in a balanced way between designated workplaces and other locations, such as home offices. In addition, we offer our staff alternatives to full-time employment via part-time or job-sharing models, where legally possible. We are also creating location-independent roles with defined job requirements to attract and recruit talent from around the world.

Attracting young generations to our company

It is crucial that we are able to attract the next generation of scientists, engineers and data specialists. Our GOglobal trainee program enables university graduates to join our company as trainees. Within 24 months, they gain an understanding of various departments and functions. Centered on China, Germany and the United States, the program offers international assignments, individual continuing education, mentoring and coaching. Additionally, our Life Science business sector has a similar training program with comparable benefits. Its focus is on production and logistics.

To cultivate young academic talent, we also offer internships in all departments to university students. Interns who perform exceptionally well are enrolled in our talent-retention program.

In addition, we regularly organize events in order to give students an insight into our company. We also take part in job fairs in Germany and abroad. University graduates can apply for a position with our company directly or complete one of our trainee programs. In addition to recruiting talented students, we also provide financial assistance. For instance, in Germany we support the scholarships granted by Deutschlandstipendium, an educational initiative of the German federal government.

Understanding our employees

Every year, we conduct Group-wide confidential and voluntary employee surveys. The regular exchange between our employees, managers and leaders provides valuable information for improving the working environment and business processes. In 2021, around 50,800 people (85%) took part, and 77% of respondents are highly engaged with our company.

In addition to our annual Employee Engagement Survey, we developed and conducted pulse surveys to encourage dialogue in specific areas or units within our businesses and functions. These initiatives include monthly mood checks on employee well-being and surveys about specific areas for improvement such as our working conditions, systems and processes.

Encouraging dialogue and rewarding ideas

We keep our employees throughout the Group up-to-date and encourage exchange through a number of formats tailored to specific target groups. Examples include our intranet and our international employee magazine. There are also local editions in some countries.

Our company has a long tradition of rewarding ideas. In 1853, we became the first industrial company in the world to contractually stipulate bonuses for successful employee implemented suggestions for improvement, and approximately 60 years ago we laid out principles and rules for our ideation efforts. Our idea management program seeks to inspire our employees to think creatively and encourage them to contribute to the continuous improvement of our company procedures and processes.

Every year, we present awards to our employees in recognition of outstanding ideas, teamwork and projects.

Performance-based pay and social benefits

We reward the performance of our employees in order to maintain a competitive edge in attracting qualified professionals. Within our Group, compensation is based on the requirements of each position as well as each employee’s respective performance.

To ensure a competitive compensation structure, we regularly review our compensation policy based on data analyses and benchmarks. In doing so, we take internal factors and market requirements equally into account. Before adapting our compensation structure, we consult with key stakeholders, such as employee representatives. The pay structures within our company are based on defined criteria, such as job requirements and performance. We make no distinctions based on gender or other diversity criteria.

In addition to competitive pay, we offer attractive benefits. Our “benefits4me” package consists of three pillars. The pillar “Company Benefits” contains offerings primarily funded by the company (i.e. company pension plans, U.S. healthcare, etc.). The two other pillars (“Health and Well-being” and “Services for Life”) cater for prevention and health-related benefits as well as other services (i.e. leasing offers for bicycle or IT hardware) in order to meet the multifaceted and individual life-cycle-related needs of our workforce.

Balancing work and life

Supporting parents

We want to make it easier for our employees to return to work after parental leave and offer a corresponding program for parents in Darmstadt and Gernsheim (Germany). In addition, employees can make use of various related training and networking opportunities. We have established a similar program in the United States.

Moreover, we offer female employees in the United States eight weeks of paid maternity leave. We have also introduced five weeks of paid paternity or adoption leave there. By contrast, the statutory minimum requirement is only 12 weeks of unpaid parental leave per year. In the case of an adoption, we also reimburse up to US$ 5,000 in adoption fees.

In 2021, 617 employees of Merck KGaA, Darmstadt, Germany (around 13% of our workforce) were on parental leave, around 55% of whom were men. In other key countries, we grant additional support benefits that exceed the legal requirements, such as unpaid parental leave for employees in Brazil. In India, too, we offer additional benefits with five days of paid paternity leave, although this is not legally required.

In offering these benefits, we do not differentiate between full- and part-time staff or employees with fixed-term contracts. The latter may apply for and take parental leave until the end of their employment contract.

Making sabbaticals possible

In principle, all employees of Merck KGaA, Darmstadt, Germany, Merck Healthcare KGaA, Darmstadt, Germany an affiliate of Merck KGaA, Darmstadt, Germany and Merck Real Estate GmbH, Darmstadt, Germany an an affiliate of Merck KGaA, Darmstadt, Germany, in Germany (around 19% of our workforce) can apply for a sabbatical, which gives them up to one year off from work. In 2021, 61 employees were on sabbatical. For personal emergencies in which an employee needs an immediate leave of absence, we offer an emergency sabbatical of up to three months. Following the example of Germany, other countries have also introduced sabbatical options (e.g. Brazil, United Kingdom) in an effort to create a better work-life balance.

Saving for retirement through a long-term account

We enable our employees in Germany to reduce their working hours before retirement or retire earlier by drawing on a long-term account. For instance, they can deposit salary components or time into the account. Moreover, our company provides subsidies to encourage the use of these long-term accounts. Employees can then use the accrued balance to stop working up to three years before regular retirement or reduce their working hours by 50% for up to six years. In 2021, more than 10,300 employees made use of this option.

In addition, representatives from the German statutory pension insurance system regularly visit our premises to inform interested employees about statutory pension matters.

Pulse survey
A pulse survey is a short employee survey that focuses on a specific topic to gauge the current sentiment of the workforce. This can, for example, relate to a single business unit in the case of change processes or be targeted to the entire workforce.
Our company uses a market-oriented system to rate positions within the company. To facilitate consistency across the organization, each position is assigned a specific role, with an overarching job architecture classifying each role as one of 11 levels, 15 functions and an array of career types (Core Operations, Services & Support Groups; Experts; Managers; Project Managers).
People or organizations that have a legitimate interest in a company, entitling them to make justified demands. Stakeholders include people such as employees, business partners, neighbors in the vicinity of our sites, and shareholders.

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