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  • 2016 Corporate Responsibility Report
2016 Corporate Responsibility Report

Responsible and agile employer

Competent, dedicated, employees with an entrepreneurial approach are key to success along our path to becoming the leading European telecommunications company. As a responsible employer, we want our employee relations worldwide to be based on dialog and focused on collaboration and fairness. We give them the opportunity to realize their potential and to contribute their individual strengths and ideas within our Group. In a market characterized by transformation, we use pioneering methods and tools to help them approach necessary changes and new technological opportunities with flexibility.

Shaping employee relations as a responsible employer

As a responsible employer, we pursue dialog-oriented employee relations throughout the Group and engage in trusting, constructive collaboration with employee representatives and unions. The works councils, central works councils and Group Works Council represent the interests of our employees at our Group in Germany. Our partner at a European level is the European Works Council. We also have executive staff representation committees and disabled employee representatives at unit, company and Group level.

Fair pay and benefits
We offer our employees competitive, performance-based pay oriented to the relevant national market. Our remuneration policies are structured to guarantee equal pay for men and women and do not discriminate. Executive compensation at Deutsche Telekom is based on our Group-wide Global Compensation Guideline. We also offer our employees additional benefits such as our company pension scheme. We regularly assess employee satisfaction with our employee survey and also conduct surveys on specific topics and in specific units.

Flexible working models
Having the chance to structure one's work according to one's own needs considerably improves work-life balance and helps prevent stress and the feeling of being overworked. That is why we encourage flexible working models. Our offer ranges from flexitime and part time to lifetime work accounts. We have been offering lifetime work accounts to around 100,000 employees and civil servants in Germany since early 2016. This reflects 90 percent of all employees in Germany. Lifetime work accounts give our employees the opportunity to finance future absence from work of longer than one month, which may be used for early retirement, a sabbatical or to support a period of part-time work. Executives have had this option since 2012. We set up 6,000 lifetime work accounts by the end of the year. In 2016, the sector-specific collective agreement on mobile working laid the foundations for establishing mobile working as a new format within the company.

Socially responsible staff restructuring
The ICT img industry is undergoing a far-reaching transformation and our customers' demands are subject to constant change. We have to continue to grow and develop to be ready for the future. This also means quantitative and qualitative staff restructuring at some of our companies. The main objective is to structure these changes for our employees in a way that is as socially responsible as possible. At the companies affected, for example, we decided to enter into collective agreements that rule out compulsory redundancies. Within the scope of this socially responsible staff restructuring, we employ alternative instruments such as severance payments and phased retirement as well as strategic training programs that help our employees prepare for new assignments.

Employee satisfaction and participation
We highly encourage a feedback culture throughout the Group characterized by open dialog and constructive communication with our employees. An important tool in these activities is our You and Me (YAM) social network with around 115,000 users, which replaced our earlier Telekom Social Network in 2016. Not only can our employees visit YAM to get all the information they need, they can also participate in cross-level dialog and suggest their own topics for discussion. Our Board managers also regularly use YAM as a platform for direct dialog. Another key element of our feedback culture is our employee survey. We supplement this survey with pulse surveys, which give us a snapshot of the mood Group-wide twice a year. Our Group-wide ideas management activities are another key tool in encouraging employee contributions to the success of the company.

We have seen an increase in the number of employees participating in our Group-wide pulse surveys as well as our ideas management activities. 73 percent of our employees took part in the November 2016 pulse survey, the highest participation rate we have seen so far. Employee satisfaction remained high as well at 73 percent. Statistically speaking, one out of every eleven employees submits their ideas to our ideas management team, giving us a continually high participation rate. We also offer our employees different ways to get involved, e.g., in the form of corporate volunteering projects.

We have set Group-wide standards for managing employee relations. These are documented in our Guiding Principles, Leadership Principles and our Employee Relations Policy.

Progress

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Employee relations at our national companies

We employ reviews to gauge progress when it comes to implementation of our Employee Relations Policy at our national companies. Two to three national companies are subject to a review each year. Our national companies use the results to further improve relations between the company and its employees. The results also help us assess employer/employee relations and any human rights risks involved in our business activities.

In 2016 we conducted an employee relations review at e-value, the service center unit of OTE (Helenic Telecommunications Organization S.A.) and Cosmote (Cosmote Mobile Telecommunications S.A.) in Greece and at T-Systems Iberia. We publish the results on our website.

The review showed that employees at e-value are very satisfied with their employer. e-value is very concerned with team building and promotes a work culture based on trust and transparency. In view of the current economic instability in Greece, these aspects are highly valued by employees. The company successfully implemented all eleven elements of our Employee Relations Policy.

At T-Systems Iberia, the review showed that the core elements of the policy, e.g., training, non-discrimination and complaint channels, were also successfully implemented . The health rate is at an excellent level at the company (97.7 percent). In addition to other health-promoting measures, T-Systems Iberia also offers its employees psychological support if needed. The company also runs a "Stable Table of Labor Relations," a platform set up to encourage communication between the four main trade unions.

In 2016 we also took a look at how the measures recommended after the 2015 review were being implemented.

Socially responsible staff restructuring continued

The transformation of our company, which will help us stay competitive in the future, was a central topic in the past few years and will continue to be in years to come. This process is connected to complex staff restructuring. We are creating new jobs in growth fields and are training qualified personnel to fill these positions. Other areas are the focus of restructuring activities involving workforce reduction. We make sure that all restructuring measures are implemented in a socially responsible way for our employees. Vivento, our internal service provider for staff restructuring at Deutsche Telekom in Germany, supports us in these activities.

Civil servant transfer
Around 500 civil servants employed with Deutsche Telekom transferred to federal, state or local authorities in 2016 with the help of Vivento. This high number can partially be attributed to a growing need for personnel on the part of a number of authorities in the wake of reform projects. 2016 also saw the addition of numerous new activities in connection with high refugee numbers. The job offers placed by various authorities were particularly attractive to employees from Group units that were restructured in 2016 as well as all employees looking for a new challenge outside the Group. Employees with civil-servant status showed particular interest in transferring to the German Federal Office for Migration and Refugees (BAMF) within the scope of our "Deutsche Telekom helps refugees" initiative as well as to IT jobs offered by federal and state authorities. Vivento also helped employees find positions with federal, state and local administrative authorities.

Staff restructuring at T-Systems
T-Systems in Germany has been undergoing an extensive transformation since 2014, which has now been successfully completed. This transformation was accompanied by complex staff restructuring measures. T-Systems launched the Job Service & Placement (JSP) project in 2014 to support employees affected by the change. The company offered support to employees whose positions were cut through a variety of measures. We were able to entirely avoid compulsory redundancies as a result.

JSP prepares employees whose positions are subject to restructuring in the transformation process for employment opportunities within and outside of our company. Advisors and coaches assist these employees with a professional career analysis, advise them on their perspectives, help them through the application process and help them identify interesting job openings. Employees switching to an internal or external position with less favorable pay and benefits can also qualify for compensation payments. Employees involved in the JSP program were given first choice over external applicants for internal T-Systems job offers in Germany and we offer employees additional training of up to six months as needed. We also offer support in the form of information events such as a seven-week workshop series. At these workshops, our employees can improve their personal skills and strengths and learn how to best apply these on the job market. Continuing education such as English coaching and XING training complete our offer.

In 2016 we decided to continue JSP beyond the scheduled end date in the summer of 2016 until June 30, 2017. More than 1,300 employees have found new jobs since we launched JSP.

Staff restructuring at Telekom Deutschland
Telekom Deutschland is engaged in an ongoing process of transformation in order to guarantee long-term competitiveness. This process involves a three-pronged approach of staff restructuring, upsizing and downsizing. There were around 2,000 new hires in 2016, more than 70 percent of which involves junior staff who have been trained at the Group. Around 3,600 employees left Telekom Deutschland in 2016 with the help of socially responsible options such as early retirement, severance pay, phased retirement and transfer to various German authorities. We take an innovative approach to internal restructuring activities such as forward-thinking skills management (link to Skills management: ready for the challenges of tomorrow).

And we are forging new paths when it comes to working hours as well. Working hours that are the same at every department are no longer current and fit neither the expectations of our customers nor our actual working hour needs, for example when it comes to network build-out. Within the context of restructuring Telekom Deutschland, we are speaking with employee representatives about more flexible working hours in order to help us come up with custom-fit solutions. These include permanently reducing weekly hours in the service and technology areas to help us manage the restructuring process. We are also working on making the weekly work schedule more flexible. Our idea is to be able to increase weekly working hours by two to four hours during peak load times and then reduce them by two to four hours when things are slow. That would give us some flexibility with a responsible approach while also helping us secure employment.

Flexible working hour schemes expanded further

We offer a wide range of optional working models tailored to the needs of specific target groups.

Voluntary commitment to encouraging part-time employment
Our goal is to improve the work-life balance and more effectively facilitate part-time models in everyday work routines, for men as well as women. With our Group-wide policy on part-time work, we made a commitment in 2010 to encourage part-time work in executive positions. In 2016 a total of 35 executives throughout Germany were working part-time. Deutsche Telekom also made a similar voluntary commitment regarding employees covered by collective agreements and civil servants. 13.4  percent of employees covered by collective agreements and 20.7 percent of Deutsche Telekom civil servants throughout Germany are currently working part-time. In 2016 we developed another part-time model, which we refer to as "additional days off," which is scheduled to go into effect in late 2017. The model gives part-time employees additional days off to help them be even more flexible with their schedules. 

Lifetime work accounts
Since early 2016 we have been offering lifetime work accounts to around 80,000 employees and Deutsche Telekom civil servants throughout the Group. These give them the opportunity to finance future absence from work of longer than one month, which may be used for early retirement, a sabbatical or to support a period of part-time work. Our employees can finance their lifetime work account either from their gross salary or with time credits converted into monetary amounts. Until 2018 we will also support employees who are below a certain income limit with an annual contribution. As many as 6,000 lifetime work accounts were set up by the end of 2016.

Guaranteed return to full-time work
Part-time employees throughout the Group can be sure that they can return to their previous schedule earlier than planned if they want to do so. This guarantee has been in place since January 1, 2014. All they need to do is give 3 months' notice; business requirements will not be considered in such cases. That means more flexibility and security for employees. With this policy, we are setting the bar for part-time employment. This makes discussion about returning to a full-time position unnecessary.

Phased retirement
Phased retirement is a model to help employees with a smooth transition to retirement. Employees aged 55 and above throughout the Group can reduce their final working years and begin early retirement. We offer phased retirement both as a block and as a part-time model. Unlike regular part-time regulations, we make a substantial top-up payment to the employees' part-time pay with our phased retirement offer. That means that reducing their weekly hours does not mean a proportionately high reduction in net pay for employees. A total of 1,996 phased retirement contracts were signed during the reporting period, 1,293 with employees under collective agreements, 127 with employees not covered by collective agreements and 576 with civil servants.

Part-time training for single parents
We have been offering single parents up to the age of 25 the opportunity to complete a training program or cooperative course of study part-time at Deutsche Telekom in Germany since 2011 in collaboration with the German Federal Employment Agency. 20 young people began their part-time training with this program in 2016.

Returning to work after parental leave
Within the scope of the Stay in ContacT parental leave program, Deutsche Telekom offers employees on parental leave a part-time program to help them return to work.

Job sharing, splitting and pairing
We also offer a number of additional options for reducing working hours such as job sharing, in which two or more employees share a position. This option can be employed using a job splitting model where each employee is responsible for different tasks or via job pairing, where employees share responsibility for one area.

2016 collective bargaining rounds finalized

We pursue a trusting relationship to employee representatives and pay our employees salaries that are fair and based on market standards. In the 2016 collective bargaining round the negotiating partners agreed on the following terms for the large majority of employees of Deutsche Telekom in Germany.

  • Starting in 2016, the salaries of roughly 60,000 employees covered by collective agreements at Deutsche Telekom AG and in the Germany operating segment were raised in two phases by a total of 4.7 percent for employees in the lower pay groups and 4.3 percent for employees in the higher pay groups. The first increase took place on April 1, 2016 with the second scheduled to follow on April 1, 2017. The duration of the new collective wage agreements is 24 months and they are scheduled to end on January 31, 2018.
     
  • Salaries at T-Systems for some 20,000 employees under collective agreements will be raised in two phases by a total of 3 percent for employees in the lower pay groups and a total of 2.5 percent for employees in the higher pay groups. The first phase took place on June 1, 2016 with the second scheduled to follow on April 1, 2017. The collective wage agreement had a term of 24 months and will expire on March 31, 2018.
     
  • The wages of apprentices and students in cooperative study programs will also be increased in two phases. On April 1, 2016, they were raised by 35 euros with another 25-euro increase scheduled for April 1, 2017. Subsistence allowance has been increased to 23 euros.
     
  • During the 2016 collective bargaining rounds, the partners also agreed to introduce a remuneration system using salary bands at Deutsche Telekom AG. The former remuneration system with its fixed group levels had been introduced in 2001 and was replaced at Deutsche Telekom AG by the banding system already being used at Telekom Deutschland GmbH on October 1, 2016. This is another step toward standardizing and harmonizing our German remuneration systems.
     
  • Collective agreement regulations to protect employees from compulsory redundancies were extended until December 31, 2018, at Deutsche Telekom AG, Telekom Deutschland GmbH and the associated service companies as well as at T-Systems.

Great interest in employee survey

We feel it is important to take the opinions of our employees into consideration when growing the Group, which is why we regularly ask them what they think. Our most important feedback tools include our employee survey, which is conducted every two years, and the bi-annual pulse survey. The pulse survey gives us a snapshot of the current mood in the Group and allows us to monitor the effectiveness of the follow-up measures taken as a result of the employee survey. This lets us make quick adjustments if necessary.

Around 73 percent of our employees throughout the Group participated in the November 2016 pulse survey, the highest participation rate we have seen so far. 73 percent of participants expressed high satisfaction with their employer. The next Group-wide employee survey is scheduled for 2017.

High turnout for Group-wide ideas management

A large number of employees once again participated in our Group-wide ideas management activities in 2016. One out of every eight employees submitted ideas in Germany alone, giving us a continually high participation rate. This shows how strong our employees' interest is in actively playing a part in improving our products and services. The economic benefit resulting from the 10,125 ideas submitted translated into a total of 168.5 million euros in cost savings and tapping new business potential. One idea submitted in 2016 deserves special mention: it enabled us to reduce our mast replacement rate from 14 percent to 10 percent, thereby making a significant contribution to conserving resources and reducing cost.

We particularly encourage our employees to submit ideas on the topics of the future, which is why we launched the Magenta Service Innovations ideas management campaign in November 2016, calling for innovative suggestions on the topic of customer care. At total of 32 ideas were submitted, a reflection of the popularity of this ideas management campaign among our employees.

Our employees' ideas can also hold their own in external competitions. One employee idea won the DeutscherIdeenPreis 2016 award presented by the German Institute for Business Management (dib). Another idea took home third place in the "Best idea for occupational health and safety" category of the 2016 Ideas Management Award presented by Deutsches Institut für Ideen- und Innovationsmanagement.

Future Work – work in the digital age

The primary aim of our human resources policy is to promote virtual collaboration and new workplace structures. We want to create a communicative, performance-oriented working environment and encourage diversity in innovation, independence and agility at the company. These things require a modern working environment. We also employ a variety of measures to support flexibility, virtual collaboration and a corporate culture centered around sharing knowledge. The first and, as of yet, the only collective agreement on mobile working concluded by an employer association creates the framework.

Open-plan offices
We are creating open office layouts and tearing down the proverbial walls to promote inter-departmental collaboration. Employees at Deutsche Telekom in Germany can structure their work flexibly and choose their work environment. Room concepts tailored to requirements and an inspiring environment promote creativity and a sense of well-being as well as cross-hierarchy collaboration. We moved into our new Group campus in Hamburg in 2016 and effectively created new, open-plan offices at our facilities in Frankfurt and Bonn. The majority of restructuring activities at our headquarters in Bonn has been completed and our employees have moved into the new offices. Large locations in Essen, Berlin and Düsseldorf will follow. Several thousand employees are already experiencing the new office world.

Virtual collaboration
In addition to redesigning our office landscape, we encourage virtual collaboration in a variety of ways, including independently organized working groups. Instead of rigid, closed project teams, our employees work together to develop cross-functional and cross-hierarchical solutions and to increase their knowledge informally. During the reporting period, for example, 40 international working groups, referred to as "communities of practice," were working at T-Systems on more than 20 strategic topics such as cyber security, the cloud and Industry 4.0 img. Community members receive intensive support with online training offers. Our employees at T-Systems invested a total of 31,000 hours in meetings and web conferences in their community of practice in 2016. We have been improving virtual collaboration and shared learning processes since 2014 with our digital Working Virtually platform. Thanks to the platform, we reached out to 17,600 T-Systems employees in 2016, offering them digital learning opportunities around the clock. They can find numerous learning videos, webinars, weekly learning calls and a number of other offers on the platform. Our employees have already invested a total of 6,546 hours in digital learning.

Digital learning
In collaboration with our partners from the world of science, we have developed a format that combines new forms of collaboration and learning: Magenta MOOC. MOOC stands for Massive Open Online Course. It is an online course targeted toward a large number of participants that provides the opportunity to learn anywhere and at any time. The format is particularly suited to our needs as we face the challenge of reaching more than 225,000 employees in 50 countries.

After our first Magenta MOOC in 2014 met with excellent response throughout the Group. we decided to again offer the program in 2016. Under the motto, Go Digital, participants could develop solutions that address one of ten actual challenges we face in our business at Deutsche Telekom. Topics included connected cars, Internet of Things and managers as role models in the digital age. Participants were divided into teams where they applied innovation methods like design thinking and were assisted by mentors and tutors. Around 3,500 employees from 31 countries signed up for the program. The video contributions were accessed around 50,000 times. 177 small, international, cross-departmental teams developed solutions for a variety of challenges. Magenta MOOC shows how we effectively apply the ideas of our employees. It also encourages cross-departmental, cross-hierarchy and cross-border collaboration and improves the digital skills of our employees.

Innovative strength through Group-wide collaboration
The topic of open, cross-departmental collaboration is becoming increasingly important as digitization progresses. We need methods and approaches that bring our employees from different areas closer together. In 2016, we brought together the strengths of different innovation areas at our company in our Co-innovation Labs. There Telekom Innovation Laboratories (T-Labs img), Deutsche Telekom's main research and development area, is now collaborating with the T-Systems Innovation Center in Munich and the T-Systems Global Systems Integration unit, our implementation partner, which develops innovative solutions in collaboration with our customers. At the Digital Co-innovation Labs, which are structured along the lines of a start-up, our colleagues work with agile processes and use a variety of tools and methods like design thinking, a creative process for coming up with ideas, prototyping and implementation. This helps us develop products that address trends early on and offer maximum customer benefit.