Working conditions
Article 964a ff. Code of Obligations
Concept and due diligence
It is our stated aim to permanently secure the attractiveness of our sites, further increase employee retention and pool our many years of experience. At Arbonia, we provide our employees with modern facilities and offer them attractive, future-oriented jobs as well as a wide range of development and career opportunities. We believe that integrating employees with a migration background is an integral part of a modern working culture. Guidance is provided in our Code of Conduct, while overarching Group-wide guidelines on equal opportunities and freedom from discrimination establish a framework in which diversity can be put into practice.
Within the corporate group, the respective HR officers of the divisions as well as of the Group are responsible for the further development of the Arbonia culture within the workforce. They report to the CEOs of the divisions or the CFO of the Group. A regular exchange among the HR officers ensures that any insights or ideas are shared across all companies. Close cooperation with employee representatives in all countries is a crucial factor in our business success. Regular meetings take place between the management teams at all sites and employee representatives.
Measures including evaluation of effectiveness
In order to be perceived as an attractive employer, we want to increase employee retention, strengthen our employer branding and make sure that our recruitment processes are up to date. Our compensation system is structured in line with common market practices. Location-specific employee benefits also contribute to our attractiveness as an employer. We have continued to make our workplaces more flexible, with options for mobile working as well as various models for flexible working hours and part-time working.
Material risks and how they are handled (own scope of business and, where applicable, business relationships)
Staff absences and departures (retirement, turnover, illness, overwork, etc.), hiring mistakes for key positions, labour shortages on the European work markets and inflation can result in staff bottlenecks, leadership shortage, loss of know-how and higher personnel costs. These factors can jeopardise Arbonia’s financial targets.
The recruitment market remains tight. This bottleneck is already reflected in longer recruitment processes. The shortage of skilled workers is one of the greatest challenges at the moment and poses a potential risk for competitiveness.
Key performance indicators
The key performance indicators are the turnover rate, period of employment and gender distribution in management. Details can be found further down.
At Arbonia, we foster a dynamic, open corporate culture. In doing so, we aim to create a pleasant, appreciative and supportive work environment and live up to our corporate responsibility. As regional employers, the companies of Arbonia make a contribution by creating and securing jobs, generating income and paying public charges in the form of taxes.
Wages, social benefits, employment level, contract set-up and compensation are to follow the principles of a responsible Group. For this purpose, three central leadership principles were determined: Firstly, colleagues maintain direct, personal working relationships with each other and are open to ideas or other points of view. Secondly, day-to-day business is characterised by pragmatism and realism; decisions are based on facts. Thirdly, managers take time for their employees and do not regard them only as workers but also as people. These principles also apply to the development of employees alongside day-to-day work.
Diversity is a key priority at Arbonia. We promote an inclusive culture in which all employees are treated equally regardless of gender, ethnicity, age, sexual orientation, religion, or other characteristics. Values such as equal opportunities, equal treatment and freedom from discrimination are extremely important to us. Although the labour market is regulated differently in each country, the overarching guidelines of the Group and the divisions apply at all Arbonia locations.
Employee satisfaction and equal opportunities
An attractive work environment is demonstrated by motivated and satisfied employees. This increases competitiveness and is reflected in a lower gross turnover rate (incl. retirements). In the reporting year, however, this increased slightly from 10.7% in the previous year to 14.6%. The duration of employment relationships is also an indication of employee satisfaction. The average period of employment at Arbonia is 12.1 years. In order to live up to Arbonia’s reputation as a fair employer in line with the market and to make changes when necessary, we regularly compare ourselves with other internationally active companies of a similar size.
Balanced compensation structure
Arbonia’s compensation system is based on the conviction that the success of a company depends to a considerable extent on the quality of work and dedication of employees. We want to use our compensation system to attract and retain employees with the necessary skills and qualities and to motivate them to deliver a consistently high level of performance. The compensation system is designed to ensure that the interests of top managers are consistent with the interests of Arbonia and its shareholders.
The two divisions offer additional benefits for the companies that are subject to collective labour agreements in order to ensure attractive compensation beyond the industry-standard pay. These benefits include a programme for obtaining e-bikes and discounted memberships for fitness studios and swimming pools.
In companies that are not subject to collective labour agreements, the compensation for the core workforce is significantly above the legal minimum wage. We ensure that our compensation level is in line with the market by means of agreed principles and internal groupings, as well as regular analysis in collaboration with the employee representatives, taking into account the labour market and developments in the region.
In developing the compensation structure, we follow common market practices of similarly situated companies that operate on the capital market. A benchmark analysis commissioned in 2020 showed that the compensation of the members of Group Management is of a similar magnitude to that of the two comparison groups. In addition, Arbonia’s salaries are reviewed annually by an external service provider and compensation levels are amended in the event of significant deviations.
On the occasion of each Annual General Meeting, the Board of Directors proposes that the Compensation Report be approved by means of a non-binding consultative voting process. In the reporting year, the Compensation Report was confirmed with a qualified majority. The Compensation Report of Arbonia presents the compensation governance and the principles of the compensation system of the Board of Directors and Group Management. In addition, it contains information on the compensation of the Board of Directors and Group Management in each financial year, on the roles that the members of the Board of Directors and Group Management exercised at other companies with economic purpose and on the shareholding rights held by the members of the Board of Directors and Group Management.
The Compensation Report has been compiled in accordance with the regulations on compensation at companies whose shares are listed at a stock exchange in the Swiss law that supplements the Swiss Civil Code (Part Five: Code of Obligations) in the fourth section on corporate law and the Directive on Information relating to Corporate Governance (DCG) of 29 June 2022 of the SIX Exchange Regulation.
For the financial year 2023, Arbonia has included a quantitative sustainability target in the variable compensation of Group Management for the first time. This was determined by the Board of Directors at the request of the Nomination and Compensation Committee in the previous year. The aim is to create incentives for efforts towards a more sustainable corporate governance.
Close social partnership
We work constructively with the trade unions in all countries in which we operate. One example of this collaboration was the development of a redundancy programme as part of the plans to close radiator production in Dilsen (BE) in 2023. In Switzerland, the collective labour agreement of the Swiss mechanical, electrical and metalworking industries (Swissmem) is applied at all companies, unless other mandatory collective labour agreements are in effect. Contact with social partners in Switzerland is therefore generally established through this association. Most of the German companies are also subject to collective labour agreements – either via an in-house wage agreement or the regional collective agreement of the trade unions.
The Arbonia Board of Directors approves all important internal frameworks and general agreements. These include the Code of Conduct (see “Compliance and anti-corruption”), the salary system, management development, collective labour agreements and wage agreements, as well as the strategic guidelines for HR management over all levels down to the local sites. The divisions receive support from the Group in succession planning and management development as well as in recording key performance indicators. In addition, personnel matters are also discussed and addressed across divisions depending on their relevancy.
Employees can see the conditions of the relevant wage agreements on information boards and screens at the production plants or via the Intranet at all times in addition to through communication by the social partners themselves. At the same time, there is no uniform procedure for the entire Group, since the requirements differ according to the company and local regulations. However, regular meetings take place between the management teams at all sites and employee representatives from the trade unions. When an employment relationship is terminated, the divisions have a standardised process.
Composition of the workforce as of 31 December
¹ Such employees were mainly employed in logistics, assembly and production in the reporting year.
All of our companies maintain continuous relationships with their stakeholders in order to communicate innovative strength, social commitment and a positive aura externally for the purposes of employee recruitment. Investments in the infrastructure as well as the progressing digitisation create further synergy effects within the Group and thereby provide high efficiency gains. The growing automation of routine activities increases the quality of jobs.
By directly addressing the regional labour market and identifying potential employees early on – for example, within the context of internships – the quality and quantity of the workforce at the respective sites is to be strengthened further. These targets can be reviewed by looking at whether vacancies can be filled and, if so, how quickly. Furthermore, tailored integration management allows employees with health impairments to return to the workplace.
Climate Division
Targeting higher employee satisfaction
The companies of the Climate Division have set themselves high targets as part of their dynamic corporate culture. The aim is to react quickly to changing conditions, with HR development measures playing a key role in this regard. Integrating employees with a migration background has been an objective of the division for a number of years. At the same time, however, our principle of inclusion also encompasses the creation of jobs for people with a disability. In the reporting year, Kermi was declared to be an “Inklusionsmotor 2023” (driver of inclusion) by a subsidiary of the VdK Bayern social association in recognition of its outstanding social engagement in this area.
The division reviews the satisfaction of its employees at individual sites every two years by means of a survey. In addition, mental health and work-related stress factors are also analysed. Various measures are derived on the basis of this data.
To fill vacant positions quickly with qualified people, the division would like to place greater emphasis on employer branding in future. The division is aiming to overcome the demographic development through targeted recruiting of new employees and increased retention of existing ones. In Italy, for example, the division intends to promote employee satisfaction with an exchange programme for highly qualified employees in partnership with a sector-related company. The success of these measures is measured based on key performance indicators such as the turnover rate. The division offers various work and part-time models and enables mobile working if technically possible.
Promoting and retaining talent
At the Climate Division, vacant leadership positions are mostly filled internally with the division’s own junior staff. The shortage of skilled workers, however, remains one of the greatest challenges for the division and is evident in longer recruitment processes. This problem is cushioned by the low turnover rate and long periods of employment. The division always strives for non-discrimination and gender-neutral recruitment processes in personnel recruitment.
Doors Division
Measures in the area of corporate culture
The division regards a dynamic corporate culture as an important part of employer branding. It also reflects the social responsibility of the individual companies and is therefore a high priority.
Measures for retaining employees include increased efforts in the area of HR development or an improved integration of employees with a migration background. In addition to reducing the turnover rate, the division also wants to speed up the process of filling vacancies with qualified employees; for example, by using professional onboarding systems as well as by developing new key performance indicators in human resources. In general, the division aims to respond to changing conditions faster and more flexibly. The progress in achieving these objectives is checked using key performance indicators such as the turnover rate or period of employment. At Invado, the targets – which also include further diversification of the top management – are reviewed by external audits at regular intervals.
At Prüm, views on culture and cooperation in the workforce were surveyed as part of a psychological risk assessment. The results were discussed with the employees in workshops and appropriate measures derived as necessary.
The small number of risk factors that resulted in measures were incorporated into the division-wide manager training sessions. There were also tangible measures in relation to working environment conditions.
