EurWORK European Observatory of Working Life

KSB AG, Germany A comprehensive approach

About

Case study name: 
Ageing workforce
Organisation Size: 
Large
Sectors: 
Metal and machinery
Target Groups: 
MenOther non-manualProfessional/managerialSkilled ManualUnskilled ManualWomen
Initiative Types: 
Comprehensive approach
Scope: 
Old

 

Organisational background

 

Based in Frankenthal, near Mannheim, KSB Corporation is a leading manufacturer of pumps and valves for private and industrial applications worldwide. The corporate group has numerous international locations and employs 12,467 people, 58% of whom are based in Europe. Currently, it has around 4,500 employees in Germany, of whom 1,700 are based in Frankenthal. The company’s present business situation is considered to be favourable.

In recent years, employment in KSB’s German locations has increased and recruitment has not been problematic. Around 33% of the Frankenthal employees are over 50 years of age and the average employee age is 42 years. The proportion of older employees is particularly high among white-collar workers. An increase in the number of apprentices and junior skilled workers has led to a more balanced age profile among industrial workers.

Women make up only 18.9% of the workforce; this has been attributed to the large proportion of technical jobs. The average job tenure is just over 19 years. The annual average employee turnover rate is 2%, and the resignation rate is 1%. However, turnover for 2004 was 4.2% because of extensive reorganisation and rationalisation.

The high level of qualification required for the work is reflected in the low proportion (less than 10%) of semi-skilled and unskilled labour.

KSB is bound by a collective agreement with IG Metall. It also has a full-time works council consisting of 19 people, six of whom, including the secretariat, are released from their work duties.

The original initiative

The initiative began because many older employees did not want to stay until the statutory retirement age. Moreover, their staying was often regarded as blocking opportunities for younger employees. Management and the works council were concerned because they feared the loss of valuable knowledge and skills.

KSB explored ways to motivate experienced employees to stay and to enhance their skills, thereby meeting the growing market challenges. It initiated a project with the support of the Rhineland-Palatinate’s Ministry of Labour, Social Affairs and Family. An employee survey and two workshops with older employees helped define motivation-boosting measures, which the KSB supported with a company-wide advertising campaign.

The programme for older employees included the following measures:

  • personnel talks with appraisals and advice on in-house career prospects;
  • age-based workplaces;
  • specific further training offers;
  • release from night shifts;
  • flexible working times;
  • mentor models for transferring expertise and easing older employees’ work loads;
  • health checks;
  • wage safeguards in case of in-house reassignments;
  • preparation for retirement.

Employees reacted very positively to the initiative: a greater number of older workers are now willing to stay on in the workplace for longer.

A critical point for the initiative came when the company had to carry out large-scale, compulsory, early retirements as part of its rationalisation measures. Despite an adverse reaction from older employees, the company and the works council defend the early retirement measures highlighting that staff reduction through a social plan would have affected mostly younger employees.

Good practice today

KSB’s comprehensive human resource policies take account of employees’ life stages and of the workforce’s age balance. The company emphasises the importance of continuing education and seeks to retain staff. Its commitment is evident in the fact that its aims to maintain the programme for older employees, even during times of rationalisation.

The company tries to manage the ageing of its workforce by remaining competitive and innovative using age-specific and non age-specific measures. It also involves its social partners in its strategic planning, for example, in the age- and situation-related measures that make up the programme for older employees.

Going forward, the company intends to concentrate on two strategies. It aims to maintain the programme for older employees and to adapt it accordingly as the workforce changes. It also plans to take a life-course approach to employee development, recognising that preparation for work in old age must be instigated early on in a worker’s life. Among other provisions, it is considering developing horizontal, as well as vertical, career paths that will benefit both the company and its employees. However, a comprehensive plan for this must still be drawn up.

Another measure designed to ease older employees’ transition to retirement is a seminar, lasting several days, on preparation for retirement, which includes topics such as inheritance, volunteering and statutory regulations.

The KSB company pension scheme aims to give all employees a pension of around 8%–10% of their last earnings.

The setting up of an in-house training centre – which offers training, including vocational education, to all employees – is another important benefit. Currently, the company is considering engaging older employees as technical trainers in the training centre. This would relieve them from everyday working pressures while putting their skills and experience to use.

Another popular initiative is a programme that trains employees to cope with stress, a provision which the company offers through its medical service.

Despite all these measures, KSB sees the need for further development in relation to the issue of the ageing workforce and acknowledges that the company still has a long way to go in this respect.

In 2006, it plans to introduce a company-wide appraisal system, the result of collective agreements and new regulations. This system requires supervisors to discuss career prospects with each employee.

Current programmes for employees aged under 55 years include vocational training (100 people in eight or nine different occupations distributed over all apprenticeship years), further education (also to be available to executives), and language and technology courses. The declared goal of this human resources strategy is to retain employees in the company, to maintain their loyalty and to promote them.

The company’s only specific programme for women is in the field of vocational training. This initiative aims to entice women to take up apprenticeships for industrial jobs. However, reconciling the demands of family and career requires greater attention. In this respect, the company has already made a start: it currently offers flexible working time opportunities for home-based office work and has an arrangement with a nursery school. A member of the human resources department has been given responsibility for managing greater diversity in the company.

Further information

Armin Zisgen (Human resources department)

Hermann Reutter (Shop steward)

Johann-Klein-Straße 967227 FrankenthalTel: +49 (62 33) 86-0Email: info@ksb.com

 

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