Workforce & organizational restructuring.
Short innovation and technology cycles and constant price and cost pressure characterize the global ICT market. With future-thinking restructuring measures, Telekom continued to increase its competitiveness during the reporting period, thereby laying the foundation for the company's long-term success. The measures focused particularly on Group headquarters and IT functions in Germany. As in the past, Telekom structured the change to make it socially acceptable and used natural attrition as well as the available HR tools.
Our Total Workforce Management (TWM) system is being rolled out across the entire Group worldwide. We use it to manage the structure of our workforce with due regard for capacities, skills, demographics and locations. The TWM allows us to simulate the effects of different business scenarios on our HR work, for example with the expansion of hybrid broadband in Germany. Over the next few years, broadband demand will increase significantly, both in mobile communications and in the fixed network. With this in mind, Deutsche Telekom is stepping up its investments in broadband networks and products. This will improve our competitive position in the long term. Broadband investments are concentrated in Germany, with the expansion of the LTE network and the use of new technologies in the fixed network. Against this backdrop, and with a view to the future requirements placed on our workforce, we make carefully measured decisions regarding
- HR development measures
- The structure and principal content of vocational training
- The number of apprentices or direct hires over the next few years
- The feasibility of new business models, based on existing HR capacities.
Our objectives are clearly defined:
- We want to boost the productivity of our workforce and thereby optimize Deutsche Telekom's cost situation throughout all markets.
- We want to deploy our employees according to their individual abilities, and pay them at the going market rate.
- We want to drive the Group's restructuring forward in a business-focused manner.
Another key parameter used in Total Workforce Management is continuously monitoring the health rate of our workforce. This helps us to identify action areas, derive selected centralized and local health protection measures, and review their efficacy.
48 percent of our employees work outside of Germany, and we generate 54 percent of our revenue abroad. The Group-wide perspective is therefore pivotal to the success of Total Workforce Management (TWM). With this in mind, TWM has been anchored across the entire Group. Global decisions regarding how many staff with which skills are deployed where and at what cost are based on standardized criteria.
Embracing Total Workforce Management at more international subsidiaries.
In 2012, we rolled out key TWM methods at other subsidiaries as well. For example, the quantitative and qualitative HR planning tool, Quality of Workforce, was piloted at OTE and Cosmote, which are members of the Greek OTE Group. This tool lets us look at the current skills profiles of the workforce and to compare it with future business demands. We also take demographic and cost-related factors into consideration when planning the measures. We were able to establish extensive use of HR planning and management measures based on our total workforce management approach at T-Systems' international subsidiaries.
We expect the market environment to become even more complex over the next few years, meaning that requirements on our employees in terms of their skills and flexibility will increase as well. That is why we will continue to expand our total workforce management approach as the foundation of strategic HR planning and adjust it to meet the demands of the market environment.
In 2013, we are expanding our Total Workforce Management by adding an External Workforce Management system to ensure that external employees and service providers are deployed as cost-effectively as possible. This will provide us with an integrated overview of internal and external employment, thereby systematically interlinking our staff restructuring tools. External Workforce Management facilitates integrated, end-to-end steering of our employees, external staff and service providers.
Deutsche Telekom actively addresses the challenges associated with technological and demographic changes. We are continuing to balance the age structure of our workforce by consistently building on the skills of our experts—including older employees—and attracting new expertise into the company. In Germany alone, we are planning up to 3,800 new hires during 2013, including some 1,900 university graduates and experts with professional experience. A further 1,900 positions will be set aside for in-house trainees, particularly graduates of our cooperative degree courses. The number of new appointments at Deutsche Telekom therefore remains at a high level.
As part of the business-centric reorganization, in 2012 we continued our socially considerate staff restructuring program, using tried-and-trusted instruments and relying on mutual consent. In Germany, these primarily centered around the new regulations on phased retirement for employees within and outside of the collective bargaining system and executives, introduced in fall 2011. Corresponding provisions on phased and early retirement also exist for civil servants. The packages we offer are far more generous than the law requires. We have a range of effective change instruments to support employees who are thinking of a change in direction, including a professional "new placement" advisory service to advise and support employees in their search for a new position, and provide assistance with sabbaticals.
January 1, 2013 saw the launch of our revamped Group Headquarters and the modified Group Services. During the course of reorganization, we are simplifying our internal processes, eliminating inefficient duplications, and creating clear responsibilities. The new Group Headquarters focuses on motivating the Group and steering it in the right direction. Operational functions are being relocated to Group Services, which operates as an efficient service provider to Group Headquarters and other Group units. The relaunch of our Group headquarters necessitated extensive structural and personnel-related changes. Most of these were achieved without compulsory redundancies in 2012 by way of internal and external fluctuation and established exit models. Employees whose roles disappeared following the reorganization are receiving individual support with their search for new employment from a dedicated temporary business unit.
The company and employee representatives have agreed to streamline the previously segmented structure in Germany. Business customer sales will be represented by 16 sales and service centers and 28 sales offices in the future. The restructuring measures were completed at our offices in Bielefeld, Stuttgart, Bremen, Hanover and Saarbrücken by February 2013. Eleven additional offices will follow. The transformation is scheduled for completion by mid-2014.
On January 1, 2012, we founded our own company for fiber-optic network expansion, Deutsche Telekom Glasfaser Service GmbH. This will enable us to speed up broadband network expansion and make it more flexible and financially viable.
In order to counter the increasing competitive pressure on the global ICT market and secure the company's long-term success, T-Systems has extensively restructured its business areas as part of the Act4Service project. The goal is to create more flexible structures and streamlined processes. The new business structure was implemented at all business units worldwide in 2012. The new structure creates conditions for leaner operations across areas and national boundaries. The project was completed in early 2012. The new Telekom IT business area was also established in 2012. T-Systems will also streamline its organization in 2013 by reducing the number of operative business areas in its corporate customer segment from four areas to two, Sales and Delivery. This process is scheduled for completion in June 2013.
Workforce restructuring at T-Systems—employees encouraged to embrace change.
In the context of workforce restructuring measures, T-Systems is keeping its employees actively informed about the opportunities available to them as well as available tools in order to help them better plan the next step in their careers. Options include skills development to qualify for attractive positions at the company or, if necessary, an external position. We continue to develop new employment perspectives for civil servants and non-civil servants in cooperation with HR service provider Vivento, for example through the "Transferring IT potential to the public sector" HR initiative, which was launched in 2012.
Deutsche Telekom centralized its IT departments in Germany in 2012. Since July 2012, the company has been concentrating its internal IT activities at a new area that is integrated into T-Systems, the Telekom IT business area. The purpose of these changes is to make the IT organization at the Group more effective and create significant competitive advantages. The new target organization is scheduled to be in place as of April 1, 2013.
The crisis in Greece means that the transformation at the Greek subsidiary OTE is taking place in the midst of a very difficult economic and political atmosphere. In spite of this situation and despite the restrictions of labor law and collective agreements dating from the time when OTE was a nationalized company, we were once again able to make significant progress in 2012. Thanks to a series of measures, including reducing overtime, shortening weekly working hours with reduced pay, training employees working in non-profitable positions and transferring them to new jobs, as well as the successful conclusion of a socially acceptable workforce downsizing program, we were able to considerably reduce personnel costs and improve performance. We were even able to hire some 350 junior staff in the wake of these measures. In consideration of the general economic environment right now in Greece, that is a considerable success. As part of our One Company strategy, we also continued to implement a new human resources role model involving clear separation between strategic, advisory and administrative functions.
Vivento has been tasked with creating new employment prospects for Deutsche Telekom employees, both within and outside of the Group, and is therefore instrumental in helping to restructure the Group's workforce in a socially considerate manner. Vivento specializes in advising and placing employees who are seeking a new role outside of Deutsche Telekom while still working there. As per the end of 2012, Vivento had placed around 3,600 employees in external roles, primarily in the public sector, such as the Federal Employment Agency. A further 3,200 Vivento employees were employed within the Group, primarily in the Service Center unit. Since Vivento was set up in 2003, it has helped a total of 41,400 employees (as at December 31, 2012) to change jobs.
Vivento has an excellent track record—here are just a few examples of its recent successes:
- It extended its cooperation with the Federal Employment Agency and intensified our collaboration with federal, regional and local authorities.
- Vivento continued to expand the Internet portal "interamt.de" and continuously improved the range of services associated with this inter-authority platform for public sector vacancies.
- It also continued to systematically improve the quality of advice and support offered to employees. Measures included the training of Vivento consultants, and an extended range of training and development measures, including virtual classrooms, Web modules and attendance training courses.
- Vivento intensified its communication with external employees via a redesigned, web-based information and service portal. At present, for example, users can find a wealth of information on every aspect of career changes, prospects outside of the Group, and developments within the Group and on the labor market.
- Vivento held numerous information and dialog events about the options available for employees considering a move outside of Deutsche Telekom.
- Vivento was awarded the quality seal "excellent" as a particularly service-focused HR services provider by the renowned ServiceRating GmbH, the first German company to offer a comprehensive ratings system.
In 2013, Vivento will be continuing its vital workforce restructuring duties within the Telekom Group, with a portfolio tailored to current and future requirements.