How we shape fair and trustworthy collaboration
We pursue dialog-oriented employee relations throughout the Group and engage in trust-based, 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 (EWC). We also have executive staff representation committees and disabled employee representatives at the unit, company and Group level. As the underlying laws and contracts vary from country to country, codetermination matters with trade unions and employee representatives are managed locally. Group management is involved in all major issues as a matter of principle. We have set Group-wide standards for managing employee relations. These were formalized in our Guiding Principles, our Group’s Employee Relations Policy, and our Leadership Principles. You can find comprehensive information about conduct in relation to human rights at our Group in the Strategy chapter.
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. As part of our Group-wide employee survey, we regularly ascertain how satisfied our employees are with their pay and also conduct other surveys on specific topics and in specific units. We have compiled a separate report in order to comply with the new legal requirements of the Act to Promote Transparency of Pay Structures, which is published every five years. You can find the latest remuneration report as an annex to the 2017 management report.
Flexible working models
Having the chance to structure one’s work according to one’s own needs considerably improves work-life balance and thus helps prevent stress and the feeling of being overworked. That is why we actively promote flexible working models. Our offer ranges from flexitime and part-time to lifetime work accounts. Following conclusion of the general collective agreement with ver.di in 2017, we introduced mobile working as a new work model at our company. It enables telecommuting and mobile working for our employees, if their activity permits that.
Socially responsible staff restructuring
The transformation of our Group was a key issue in past years and will continue to be so in coming years. Against the backdrop of digitalization and the associated changes, we must secure our long-term viability and competitiveness. 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. In doing so, we support them in the best way possible on our way to the digitalized working world.
Employee satisfaction and participation
We highly encourage a feedback culture throughout the Group and promote open dialog and constructive communication. Our social network “You and Me” (YAM), the Group-wide network that has about 120,000 users, is an important tool for this. YAM provides comprehensive information and a platform for our employees to engage in cross-hierarchical dialog and raise topics that are important to them for discussion within the Group. Deutsche Telekom’s Board of Management also uses YAM regularly to discuss matters directly with employees. Another key element of our feedback culture is our Group-wide employee survey. We supplement this survey with pulse surveys, which give us a snapshot of the mood twice a year. Our Group-wide ideas management activities are another key tool in encouraging employee contributions to the success of the company. We also offer them opportunities to help shape our corporate social commitment within the scope of corporate volunteering initiatives.
Employee relations at our national companies
What progress have our national companies been making in implementing our Employee Relations Policy (ER Policy)? We determine such progress using special reviews. Two to three national companies are subject to such a review each year. They use the results of the review to further improve their relations with employees. The results also help us conduct a Group-wide assessment of employer/employee relations and any human rights risks involved in our business activities.
In 2018, we carried out reviews in Malaysia, Singapore and Hungary. We are publishing the detailed results on our website.
Hungary (Magyar Telekom): The ER Policy and its core elements have been successfully integrated throughout the company. Employees know the policy and what it means for their everyday work. The training and development opportunities for employees and managers should also be highlighted. The management feels it is important to strike the right balance between achieving the transformation targets and hiring new employees: The company needs to find new, innovative talents and integrate them quickly in a larger, multi-generational team, yet it must also improve its long-term performance. Magyar Telekom was chosen as one of the top 10 employers in Hungary in 2017, which is reflected in its good results for employee loyalty, team spirit and collaboration.
Singapore (T-Systems Singapore): The ER Policy has been in effect at T-Systems Singapore since the end of 2012 and has become an integral part of the company’s everyday work. This is confirmed by the on-site review and discussions with the workforce. The ER Policy’s successful implementation is demonstrated, for example, in the regular town hall meetings, after which all employees assemble, or in the spirit of open collaboration in teams. Despite the great competitive pressure, T-Systems Singapore is economically successful. The local management is therefore highly respected among the workforce. This is proven by the good survey results in the categories of employee loyalty, team spirit and collaboration.
Malaysia (T-Systems Malaysia): Extensive discussions with management and numerous employees of T-Systems Malaysia showed that all elements of the ER policy introduced in 2012 had been successfully implemented. Employees stated that they were very satisfied with their employer and cooperation with colleagues and management. However, they suggested that the components of the ER Policy should be made more widely known. That applies in particular to the general guidelines and grievance channels. In addition, the workforce would like to see the contents of the policy as the subject of a special town hall meeting.
Socially responsible staff restructuring continued
The transformation of our Group was a key issue in past years and will continue to be so in coming years. It entails extensive staff restructuring, which we again accomplished in a socially responsible manner in 2018. As part of that, we continue to employ tools such as severance payments, dedicated retirement, and phased retirement. The principal developments are outlined below:
Vivento: service provider for staff restructuring
Our HR service provider Vivento continued to support us in socially responsible staff restructuring in 2018. It identifies new career perspectives outside and at the Group for our civil servants. In 2018, the focus was primarily on transfers of civil servants to the Federal Office for Migration and Refugees, the Federal Employment Agency, the Federal Armed Forces, and customs agencies. Employees were assisted in finding positions with federal, state and local administrative authorities. About 326 civil servants employed at Deutsche Telekom opted for a permanent transfer to federal, state or local authorities in 2018. Since Vivento was established 15 years ago, it has helped more than 51,374 employees (as at December 31, 2018) to gain a new career perspective.
Fundamental transformation of T-Systems
Deutsche Telekom’s Systems Solutions business is undergoing an extensive process of transformation. The goal is to position T-Systems as an attractive, flexible partner for digitalization. The foundation for the future reorganization in Germany was laid in 2018. From January 2019, T-Systems will have a new setup geared toward portfolio units, such as SAP, Internet of Things, Security or Digital Solutions, which work increasingly in flexible organizational structures. Cost cuts are intended to help fund investment in new growth areas, such as the cloud, the Internet of Things and security, as well as ensure competitive prices. The reorganization will enable us to make our administration and sales structures much leaner. Capacity requirements will be reduced by a total of some 5,600 jobs in Germany by the end of 2020, while new jobs will be added in growth areas. Apart from the corporate structure, our location structure in Germany will also be streamlined. The current 230 office locations in more than 100 cities will be merged at 25 cities in the future. Shared functions, such as Communication, Finance and HR, will be pooled at the central locations Hamburg, Berlin, Bonn, Darmstadt, Frankfurt am Main, Leinfelden and Munich.
We aim to shape the restructuring in a socially responsible way using tools such as phased retirement, early retirement, and severance payments. The T-Systems service provider Job Service & Placement (JSP), established in 2014, will provide employees with advice and support in the change process under an extensive program. Employees without a job in the new organization will transfer to JSP, where new employment will be found for them within the Deutsche Telekom Group and elsewhere. Compulsory redundancies are to be avoided wherever possible. Our employees will be supported by various initiatives during the change process – for example, with Outward Mindset workshops, which will help them reflect positively on the transformation in a wider context. We trained more than 2,500 employees in this approach in 2018.
Realignment of Telekom Deutschland GmbH
Deutsche Telekom’s business in Germany continues to change, with the goal of being even more competitive and service-oriented. The transformation project comprised three major changes:
- A new service organization was founded to provide services for consumer, business and carrier customers from one source.
- A new sales organization was created for business customers.
- A consumer sales organization was formed from T-Shop Gesellschaft.
In 2017, about 20,000 colleagues moved to the new units by way of transfer of operations, job offer process, transfer, assignment or temporary leave from civil-servant status. The reorganization and transfer of operations for employees from service and business customer sales were completed at the turn of 2017/2018.
Holistic staff restructuring and transfer management at Telekom Deutschland GmbH
As part of the digitalization of business fields, we still need to win over employees to the idea of a career change. To this end, holistic staff restructuring and transfer management was established in the Germany operating segment in 2017, with the aim of achieving a quick impact. This means that in cases where tasks will be eliminated or different skills are required for certain positions, we want to take preemptive steps and consult with the affected colleagues on the opportunities for a professional reorientation. We also integrate managers actively in the change process. Our consulting concept comprises the development of internal and external employment alternatives and working out a specific potential labor market for the employee in question. In addition, we provide assistance in the individual job application process and – where necessary – offer skills development measures.
Flexible working models for a wide range of needs
We offer our employees a large number of optional work and collaboration models that are tailored to different needs. This also addresses growing requirements for greater flexibility as a result of the digital transformation.
Promoting part-time work
Working based on various part-time models is a concept that is established throughout the Group:
- Our employees can join a part-time model directly or switch from full-time to part-time work. That also applies to managerial positions.
- Since 2014, our employees have had the right to return to their original weekly working hours at any time. As a result, we offer our employees more flexibility than prescribed by the German government’s new law on “bridging part-time employment.”
In Germany, 12.9 percent of employees under collective agreements and 15.2 percent of civil servants took advantage of part-time models (as at December 31, 2018). In addition, a total of 29 executives throughout Germany were working part-time (as at December 31, 2018). You can find detailed information on our numerous part-time options here.
Mobile working is the normal state of affairs at Deutsche Telekom. In 2017, Deutsche Telekom and ver.di agreed on the first collective agreement on mobile working concluded by an employer association, which includes rules regarding telecommuting and mobile working, among others. Thanks to increased geographic flexibility, our employees have more freedom to plan their work. We also enable them to achieve a better work-life balance.
Lifetime work accounts
Since 2016 we have offered about 74,700 employees in Germany what are termed lifetime work accounts. The around 12,600 civil servants in Germany have had this option available to them since mid-2017, which allows them to finance a future leave of absence lasting more than one month. The account 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 2020 we will also assist employees who are below a certain income limit with an annual contribution. We have already set up 10,430 accounts for employees and 664 accounts for civil servants (as at December 31, 2018).
The 80/20 model
Since 2017, we have been using the 80/20 model to give our employees the opportunity to spend up to 20 percent of their working time on projects outside of their usual remit. This allows them to work with teams from other departments. In this way, we break up departmental silos and can make better use of the company’s broad spectrum of talent. The model makes employees more visible and motivated, and enhances their network of contacts. Use of the model is voluntary and is tied to a specific Group project.
We offer all Group employees over the age of 54 the option of phased retirement. Separate regulations apply to employees and to civil servants. There are two options for phased retirement: the block model and the 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. This means that reducing their weekly hours does not equate to a proportionately high reduction in net pay for employees. During the reporting year, a total of 1,429 phased retirement contracts were concluded with employees both covered and not covered by collective agreements. Among civil servants there were 410 such contracts.
These are based on the laws and regulations applicable in the individual countries. Working hours at Deutsche Telekom in Germany are governed by collective agreements and works agreements. Daily working hours are electronically recorded for employees who are covered by collective agreements. This guarantees compliance with legal and company regulations; for example, it makes sure that the weekly working hours for a specific flexitime balancing period are complied with. At a large corporation like Deutsche Telekom, regulations are diverse and cannot be fully specified for all the Group companies.
Implementation of the 2017 collective bargaining round and other harmonizations in 2018
In the course of the 2018 collective bargaining round, the incomes of employees covered by collective agreements at Deutsche Telekom in German were increased.
- Starting in 2018, the salaries of roughly 60,000 employees covered by collective agreements at Deutsche Telekom AG and in the Germany operating segment were raised by a total of 5.2 percent for employees in the lower pay groups and 4.8 percent for employees in the higher pay groups. The first salary increase took effect on May 1, 2018. The second salary increase will be implemented on May 1, 2019. The duration of the new collective wage agreements is mostly 26 months and they are scheduled to end on March 31, 2020.
- Salaries at T-Systems for some 20,000 employees under collective agreements will be raised in two phases by a total of 5.5 percent for employees in the lower pay groups and 4.5 percent for employees in the higher pay groups. After the first increase on January 1, 2019, the second increase will take place on January 1, 2020. The collective wage agreement has a term of 33 months and will expire on December 31, 2020.
- The wages of apprentices and students in cooperative study programs will also be increased in two phases. After the first increase of 40 euros effective May 1, 2018, there will be another increase of 30 euros in May 2019. Subsistence allowance for apprentices not living with their parents was increased by 20 euros to 250 euros.
The standardization and harmonization of our German remuneration systems adopted in the 2016 collective bargaining round was further driven forward. The first successful collective bargaining took place in 2017; the results will be implemented on January 1, 2018, and January 1, 2019. Collective bargaining on additional harmonization topics was continued in 2018.
Apart from a sharp increase in salary, we also intend, where possible, to introduce the new “additional days off” part-time model at companies covered by a collective bargaining agreement in the Group in Germany. Under the new part-time model, employees have the option to reduce their contractual weekly working hours, but to continue to work full-time and take the hours they have earned as block leave over the course of the year.
Harmonization of remuneration systems
In the course of the 2016 collective bargaining round, we and the union identified that there was a need to harmonize the remuneration systems within the Group in Germany and subsequently conducted negotiations on that issue. Salaries will be harmonized at all companies in Germany covered by a collective bargaining agreement, with the exception of T-Systems. The following step-by-step adjustments were agreed:
Changes with effect from January 1, 2018:
- Conversion from an annual target salary to a fixed annual salary, in conjunction with performance-related bonuses, for consumer sales.
- Standardization of the times for increments in the salary range for each salary group.
- Gradual conversion of non-sales from an annual target salary to a fixed annual salary. The current compensation system is retained for 2018; however, the target achievement and hence payment of the variable component was set at 100 percent.
Changes with effect from January 1, 2019:
- Complete conversion of non-sales employees to a fixed annual salary, hence elimination of variable compensation for non-sales.
- The arrangements on variable remuneration will also be gradually harmonized at T-Systems as of 2019. Non-sales at T-Systems will likewise be converted to a fixed annual salary in 2021.
Great interest in employee survey
Our employee survey, which is conducted every two years, is an important tool for obtaining feedback from our employees, discovering weaknesses, and implementing suitable measures to eliminate those weaknesses. The twice-yearly pulse survey additionally helps us obtain a current snapshot of the mood at the company and verify whether the introduced measures have been successful. This lets us make quick adjustments if necessary.
Some 75 percent of employees throughout the Group took part in the last employee survey in 2017. The Group index value for commitment – our gage for employee satisfaction – was 4.1 on a scale of 1 to 5, with 5 being the highest. The pulse survey in November 2018 saw a 72 percent response rate among employees. 70 percent of participants expressed high satisfaction with their employer.
Trust-based cooperation with employee representatives
Co-determination rights play a key role with respect to digital transformation. We want to create the working world of the future alongside employee representatives and unions – with an eye toward the needs of our workforce and the success of our company. We negotiated and adopted over 150 agreements in 2018 through constructive dialog with our works councils. Two key transformation projects we conducted in 2018 in close coordination with the works councils were the organizational measures “Technology & Innovation 2018” and “T-Systems Transformation”. In addition, 85 collective agreements were concluded with the union ver.di in 2018. Apart from the collective bargaining agreements, the focus in 2018 was on concluding arrangements on harmonizing the Group’s remuneration systems as far as possible. Collective bargaining plays an important role and has a long tradition at our company, a fact made clear by the percentage of employees covered by collective agreements. As of December 31, 2017, some 71 percent of employees in Germany were covered by collective agreements.
Constructive dialog with T-Mobile USA
As the underlying laws and contracts vary from country to country, codetermination matters with trade unions and employee representatives are managed locally. Group management is involved in all major issues as a matter of principle. You can find information on the U.S. operating segment in the 2018 annual report.
Good participation in Group-wide ideas generation
Fewer employees took part in ideas generation in 2018. In Germany, every 20th employee submitted a new idea. 5,123 ideas were submitted, which is a lower participation, but on the other hand the quality of the individual ideas was higher. The economic benefit translated into a total of 78 million euros in cost savings and tapping of new business potential.
So that participation in Group-wide ideas generation rises again in the future, we have put greater focus in the reporting year on the issue of cooperation with initiatives, such as the company’s own innovation program UQBate or the Telekom think tank for customers.
An employee’s idea also won an external accolade in 2018: Manfred Haidl picked up second place in the category “Administration” in the award presented by the Ideas Management Center. Manfred Haidl developed and programmed a software solution to map processes for handling incidents reported to the service desk, enable standardization and automate recurrent activities.
We honor the service of our longtime employees
In our anniversary celebrations, we honor the commitment of our employees celebrating their 25th, 40th and 50th service anniversaries at Deutsche Telekom in Germany. Thanks to their experience, they make an important contribution to our success. The excellent cooperation between our colleagues, both young and old, is also a key pillar of our business success.
For the first time, 2018/2019 saw a joint celebration for all Group units in Germany. Around 1,600 colleagues took part in it, representing a combined total of 53,875 years of work and experience at Bundespost and Deutsche Telekom. We expressed our very special appreciation for employees who were celebrating 50 years with us: They visited the Telekom Design Gallery at Group headquarters in Bonn and then attended a reception with the Board of Management members Dr. Thomas Kremer and Dr. Dirk Wössner.