People

HR work in the transformation

Strategy and concepts

Organisation and control

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The Human Resources (HR) unit of the Mercedes-Benz Group is the “HR business partner” or “HR partner” of the Group’s own business units. In addition, overarching personnel issues are assigned to units in order to ensure uniform management of strategic and policy matters. HR is represented on the Board of Management of Mercedes-Benz Group AG as a separate functional division. Within HR, there is decision-making and communication structure at different management levels.

Realignment of the human resources strategy

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The HR team of the Mercedes-Benz Group is convinced: changes are only possible through people. The people and the culture are the key to a company’s success. This is also reflected in the mission “People are our business. We build the future.”, which the Human Resources unit adopted in November 2021. To implement this mission, along with an attractive product portfolio, changed structures and new skills are needed in the HR organisation. Human Resources employs the new strategy to shape the personnel transformation of Mercedes-Benz and support the people in this process – as a mediator between the Group and the employees. The HR strategy, which was adopted in July 2021, rests on three pillars: Re-Shape, Re-Skill, Re-Charge.

HR Strategy

The “Re-Shape” pillar comprises the future-oriented positioning of the Group. On the one hand, electromobility and digitalisation require new skills from the existing team in production and administration; on the other hand, new specialists are also needed – for example in the IT sector.

With “Re-Skill”, the Mercedes-Benz Group wants to ensure that employees are equipped with the necessary know-how for future activities and tasks – for this, it wants to train and qualify them accordingly.

To retain trained professionals in the Group and recruit new talents, the Mercedes-Benz Group strives to continue positioning itself as an attractive employer. The Mercedes-Benz Group is pursuing this goal within the “Re-Charge” pillar. It sees the development of an appropriate corporate culture based on trust as an important factor for this.

Cooperation and management culture

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The Mercedes-Benz Group believes that the interplay of strategy and corporate culture offers a key competitive advantage. The company therefore works constantly to improve its management culture and the way people throughout the organization cooperate.

The “Leadership 2020” initiative that was launched back in 2016 (later known as “Leadership 20X”) laid the basis for the Mercedes-Benz Group’s future success. Working groups with a diverse composition of employees and managers agreed with the Board of Management of the Mercedes-Benz Group AG on how good leadership should be understood and which structural changes and tools are needed in order to transform the way we currently work (Game Changer). One of the results of the working groups was People Principles for cooperation: Pioneering Spirit, Agility, Purpose, Empowerment, Customer Orientation, Co-Creation, Learning and Driven to Win. The initiative was completed in 2021, but the principles are still used as a basis for leadership and cooperation at the Mercedes-Benz Group.

The resulting framework, within which the Group is looking to further develop its culture, is an integral part of the processes for human resources development and decision-making, as well as the organizational structures and work methods and tools. The units use the shared basis of the People Principles to focus on their own specific areas and develop measures to be taken.

Involvement and co-determination of employees

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The Mercedes-Benz Group is committed to fulfilling its social responsibilities and makes every effort to take into account both the economic interests of the Group and the interests of its employees. For this reason, the Mercedes-Benz Group in Germany works with the employee representative body to get employees actively involved in the Group’s affairs. One of the goals here is to ensure constructive cooperation between corporate management and the employee representative body. Corporate management and the employee representative body also maintain an ongoing dialogue. 

Firmly establishing working and social standards

In 2002, Mercedes-Benz AG issued its own Group-wide Principles of Social Responsibility, which are based on the International Labour Organization (ILO) work and social standards. These principles were completely reworked and comprehensively supplemented in 2021 and republished as the Principles of Social Responsibility and Human Rights.

Reported violations of the Integrity Code or internal regulations, as well as legal regulations, that pose a high risk to the Mercedes-Benz Group and its employees are followed up by the whistleblowing system, the Business Practices Office (BPO).

Furthermore, the Mercedes-Benz Group is committed to its social responsibility and the ten principles underlying the UN Global Compact (UNGC). As a participant in the UN Global Compact, the Mercedes-Benz Group has committed itself, among other things, to respecting key employee rights.

Measures

Responsible transformation

Depending on their product portfolio and the size of their operations, the Mercedes-Benz Group sites, and thus the company's various groups of employees, are affected to different degrees by digitalization and the transformation of the mobility and transport sector into a system of electric mobility. The aim of the Mercedes-Benz Group is to shape the transformation in a responsible, socially compatible and future-oriented manner. The Mercedes-Benz Group assumes responsibility for its employees through individual training and further development measures.

However, change requires security more than anything else. That’s why the company signed an agreement that gives the employees at Mercedes-Benz Group AG,
Mercedes-Benz AG and Mercedes-Benz Intellectual Property GmbH & Co. KG a job-security guarantee for the period until 2029. The agreement excludes the possibility of business-related layoffs until 31 December 2029.

Target visualisation provides guidance

For the transformation to be successful, it needs to have a final destination and a roadmap for getting there. For this reason, the various sites (currently the major component and assembly plants) are developing goals for the transformation process. The sites are also identifying key topics that will then be translated into specific measures and subsequently implemented. Examples of such measures include qualification and retraining programmes. The Digital Pioneers initiative is part of this approach. In 2022, production employees in Berlin and Stuttgart-Untertürkheim were able to undergo customized retraining able to undergo customized retraining on digitalization topics. Other options also include relocation or offers outside the Group.

Transformation and communication

Another goal at the Mercedes-Benz Group is to get employees on board for the changes that are coming in the transformation, and also motivate and enable them to actively participate in the change process. To this end, it launched the initiative TransformatiON – Gemeinsam aufbrechen (TransformatiON – Setting off together) in the Powertrainverbund (powertrain network) in 2022.. The scope of the transformation is particularly noticeable in the “Powertrain Network” and the associated areas. This means that new communication channels are needed there in order to inform, involve and support workers even better. TransformatiON uses information, interaction, dialogue and feedback as central elements that are offered in new formats and via new channels. These formats and channels are being developed with the help of Transformation Ambassadors — employees from various units and functions who are actively participating in the change process
and serve as contacts for their colleagues. Together with management, they identify key challenges for the workforce during the transformation and develop solutions that are initially introduced at the traditional German locations in the Powertrain Network.

Modern and attractive working conditions

Employees and new talents expect modern and attractive working conditions that are adapted to their needs and are constantly further developed. To meet these requirements, the Mercedes-Benz Group is designing a corresponding working environment – and offers employees e.g. competitive remuneration, flexible working time models and the opportunity to combine private and professional life.

Attracting and retaining new talent

The function of the Human Resources Development unit of the Mercedes-Benz Group is to recruit and retain highly qualified employees for challenging work responsibilities. The company’s global employer branding provides the basis for making talented new job-seekers aware of the company and recruiting them.

The Mercedes-Benz Group has revised its employer branding and, since the beginning of 2023, has appeared on the labour market with the new slogan “Becoming .... One of Us” and the new employer value proposition “Together for excellence”. The campaign places the focus on people.

In addition to these promotional measures, personal dialogue with potential employees is important – for example at national and international career fairs or recruiting events that take place both digitally and in person.

In the reporting year, the Mercedes-Benz Group placed a special focus on recruiting IT and software specialists for the future Mercedes-Benz Operating System (MB.OS). This system, which was largely developed in-house, is a data-supported software and hardware architecture that can be flexibly updated. The Group strives to use this system to intelligently connect the vehicle with the cloud and with the Internet of Things (IoT). MB.OS is expected to be launched in Mercedes-Benz vehicles in 2024. In a special area of the Group’s career website it offers talented job-seekers from the world of IT who are interested in this area all the important content and information about MB.OS – for example, interviews with the company’s software experts, who provide insights into their work and various topic areas, as well as current job offers.

Moreover, in 2021 the Mercedes-Benz Group and the works council – with the approval of the collective bargaining parties – agreed a new set of conditions for new employees in the area of MB.OS at the Sindelfingen location. These are especially tailored to the needs and demands of software professionals: Accordingly, they can organise their working hours more flexibly and independently and are remunerated on a more performance-oriented basis. Employees who are already working in the MB.OS environment have been able to switch to the new system voluntarily since January 2022.

Attractive and transparent remuneration

The Mercedes-Benz Group remunerates work in accordance with the same principles at all of its companies around the world. The Corporate Compensation Policy, which is valid for all groups of employees, establishes the framework conditions and minimum requirements for the design of the remuneration systems. Among other things, it stipulates that the amount of the remuneration is determined on the basis of the requirements of the job profile in question (taking into account, for example, the person’s knowledge, expertise, responsibilities and decision-making authority) and, where appropriate, performance. However, it does not take account of gender, origin or other personal characteristics. The internal auditing department conducts random annual internal audits to determine if selected aspects of the policy are being complied with. Here, the Group also takes into consideration local market conditions and benchmark data, because the Mercedes-Benz Group wants to offer its employees salaries and benefits that are customary in the industry and the respective markets.

The Human Resources departments of the companies regularly hold rounds of talks to review the salary levels of employees and managers. In this way, the Mercedes-Benz Group ensures transparency in salary decisions in compliance with data protection regulations. Employees who are not satisfied with their remuneration can speak to their manager. If the employee and the manager fail to resolve the issue, the responsible human resources unit or works council can be brought in.

In companies covered by collective agreements, such as Mercedes-Benz Group AG, further rights for employees result from the collective agreements: among other things, they can object to their placement in a specific salary group or to the results of their performance assessment.

For non-production employees of Mercedes-Benz Group AG, Mercedes-Benz AG and Mercedes-Benz Intellectual Property GmbH & Co. KG in Germany below Level Four, there has been a standardised, one-year management process in place since 2007 as part of the introduction of the Remuneration Framework Agreement (ERA). Managers and their employees agree on goals, targets and areas of focus for their work, which they verify jointly with appropriate measures in an interim or final review, if needed. Agreements are also made regarding the employee’s further professional development in the process.

A standard regulation regarding performance-based remuneration applies to employees at Mercedes-Benz Mobility AG and Mercedes-Benz Bank AG (including their subsidiaries). According to the remuneration group from the Service Supplementary Collective Agreement of 1999, an annual target salary is contractually fixed. This consists of a fixed and a variable component. A performance appraisal/target achievement process is conducted annually: employees below Level Three define individual goals and targets with their respective managers at the beginning of each year, which are likewise verified in an interim or final review. The PA/TA process helps managers and employees to formulate targets that are acceptable to both sides. It also increases transparency and thus acceptance of the remuneration system.

The remuneration arrangements and pay scales for employees covered by collective agreements at Mercedes-Benz Group AG, Mercedes-Benz AG, Mercedes-Benz Mobility AG, Mercedes-Benz Bank AG and Mercedes-Benz Intellectual Property GmbH & Co. KG can be viewed on the Social Intranet. The salary components and levels, plus the comparison groups, can be viewed here.

In addition, pay-scale employees and managers of Mercedes-Benz Group AG and its subsidiaries benefit from predominantly voluntary benefits which are agreed with the respective employee representatives. These include, for example, employer-financed contributions to the company pension plan and options to take out an employee-financed pension plan. In many cases, employees who are subject to collective bargaining agreements can also participate in profit-sharing arrangements at their respective companies.

The variable remuneration of management (managers of Levels 1–3 and Level 4 executives) is based not only on financial targets but also on transformation goals and non-financial targets. These support the corporate strategy with regard to the defined focal areas for the future, as well as sustainability and ESG aspects. The components take into account for example CO₂ emissions, safety innovations, quality, employee engagement, integrity and diversity.

Modern working time models

The Mercedes-Benz Group continuously further develops its working culture – and thus its working-time arrangements as well. It will increasingly make use of hybrid forms of work in the future and thus enable its employees, depending on their tasks and the work processes they use, to work either remotely or on site in their offices. It is important for the company to maintain a balance. This common creative freedom should contribute to the enhancement of the performance and satisfaction of the employees at the Mercedes-Benz Group in Germany. With its comprehensive company-wide agreement on mobile work that has been in force since 2016, and in a process of constant dialogue with the works council, the Group creates the necessary framework for hybrid working models. In the reporting year, the Mercedes-Benz Group developed an action recommendation, including training offers for hybrid forms of working. In addition, employees of the Mercedes-Benz Group in Germany can also work remotely for private reasons temporarily from abroad since March 2023.

Modern working models also affect the design of new offices, as well as the use of existing workspaces: the Mercedes-Benz Group in Germany seeks to offer its employees modern workplaces – and flexible work opportunities that serve above all as a meeting place for discussion, creativity and innovation.

The Board of Management issued guidelines on this in 2021. One cornerstone of successful cooperation is trust and the creation of a sense of belonging by managers. Continuously developing the self-direction and self-management of employees is an important management task in this context.

In addition, the Mercedes-Benz Group in Germany offers a variety of part-time working models: for example, employees can reduce their working hours and spread their daily, weekly or monthly hours over one to five days or take part-time in the form of blocked part-time, such as alternating full-time work and leave periods.

The Mercedes-Benz Group also promotes job-sharing arrangements at all levels, especially in Germany who share a common task or position on a part-time basis. This is especially helpful for employees with challenging home situations who wish to balance their professional and private lives more effectively and continue to develop professionally by sharing a job. The Mercedes-Benz Group is convinced that a job-sharing model with two people combining their experience, strengths and networks brings better results with regard to complex professional and/or management tasks. Three internal part-time work communities were set up in 2015 in order to facilitate the search for a tandem partner. These communities bring together potential tandem partners, regardless of whether they are in administration and production units or in management positions. In the reporting year, there were 211 tandems at the management level in the Mercedes-Benz Group.

In addition, employees at Mercedes-Benz Group AG, Mercedes-Benz AG and Mercedes-Benz Intellectual Property GmbH & Co. KG can agree to take a sabbatical ranging from three months to one year. Subsequent reinstatement is guaranteed. Employees who wish to obtain additional qualifications – including pursuing a course of study at a university – can also make arrangements to take a three to five-year leave with guaranteed reinstatement.

Promoting work-life balance

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Mercedes-Benz Group AG, Mercedes-Benz AG, Mercedes-Benz Intellectual Property GmbH & Co. KG as well as Mercedes-Benz Mobility AG and Mercedes-Benz Bank AG offer various types of working-time arrangements and other options to support employees who have children or who care for relatives. For example, employees in Germany have access to over 590 childcare places in day care centres near the company’s locations. In addition, there are more than 190 other dedicated places at various locations in Germany.

In addition, the Mercedes-Benz Group also wants to make it easier for their employees in Germany to get back to work after taking parental or family leave. For example, they can get news from the Group on the Social Intranet and access the internal job exchange during their parenting and family time. Furthermore, the Mercedes-Benz Group also supports mothers and fathers in Germany with counselling offers for the transition to parental leave and for keeping in touch during their leave. In addition, there are regular information events and experience-sharing opportunities for expectant parents and employees on parental leave. To ensure that all interested employees across Germany can participate, the events take place digitally. For questions about parental and family leave employees also can turn to contact persons of the HR Service Centre.

In 2022, 4089 employees of Mercedes-Benz Group AG, Mercedes-Benz AG, Mercedes-Benz Mobility AG and Mercedes-Benz Bank AG were on parental leave.

Since early 2022, all employees of Mercedes-Benz Mobility and Mercedes-Benz Bank, including subsidiaries in Germany, have been able to take advantage of an external platform on the topics of “Babies & Children” and “Schoolchildren & Teenagers”. There they receive supportive offers for coping with everyday challenges associated with relationships and family life.

Since mid-2020, the Mercedes-Benz Group in Germany has further expanded its cooperation with an external care counselling service. Employees can obtain advice around the clock on the topic of care. The external care service also provides consultations at home.

In addition, the Group offers online events on various care topics such as general power of attorney, financing care costs or dementia. Employees who want to take care of their relatives can take up to four years off work beyond the legal provisions – with a promise of reinstatement – or reduce their working hours temporarily as needed.

Management culture

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The transformation of the Mercedes-Benz Group also places new demands on management. The Group wants to enable managers to perform their important roles in the technical, strategic and cultural transformation. The basis for this is provided, in particular, by the ”People Principles” which are valid throughout the Group.

Among other things, the Group has a personnel development tool for its managers. The online tool is available for all managers up to and including Level Four. "360° feedback” is also part of this tool: Superiors, employees and selected colleagues give feedback to the manager. The assessment is based on the “People Principles” and is intended to help the managers to further develop their behaviour and improve their own performance.

The new hybrid world of work poses different challenges for the leadership culture within the Group. In order to support managers as much as possible in their roles and their tasks, the Mercedes-Benz Group offers them in-class and online training courses that focus on the opportunities and the framework of leadership. The company also continuously further develops these courses. “Gear-up – increase your leadership impact”, for example, is a digital development programme that addresses in a targeted manner the new challenges relating to leadership with regard to innovation, cooperation, sustainable development and personal resilience. Another programme known as “Shaping the Future – Leading for Success” focuses on the topic of strategy implementation and shaping the transformation. More specifically, this involves the complex environment and the challenges that arise from it in terms of management and leadership. In this programme, internal and external specialists give lectures that generate momentum and offer space for discussions and exchanges. Both programmes are offered to executives who have been nominated in advance by their division and HR.

In addition, hybrid teams equipped with great cross-divisional expertise have been formed. These teams support managers within the Mercedes-Benz Group in managing change processes with impulse sessions and blueprints for successful team discussions. Participants can engage in direct exchange with members of the Board of Management and obtain guidance for their challenges as managers. The formats are aimed at managers on different levels.

Managers receive further support from a worldwide network within the Mercedes-Benz Group, whose members are to live and drive the changes as role models in their areas. It consists of experts and volunteers, some of whom were already involved in the Leadership 2020 initiative. In their role as network members, they support their colleagues and managers in the current change processes.

Dialogue with employee representatives

The Mercedes-Benz Group acknowledges its employees’ right to form employee representative bodies and conduct collective bargaining in order to regulate working conditions. It also recognizes their right to strike in accordance with the applicable laws. Important partners here include the local works councils, the General Works Council, the European Works Council and the World Employee Committee (WEC). Collective bargaining agreements exist for the majority of employees throughout the Group. Such agreements apply to all non-exempt employees subject to collective bargaining agreements at Mercedes-Benz Group AG and Mercedes-Benz AG and at other units at the Group. In jointly constituted committees, the company representatives regularly inform the employee representatives about the economic situation and all of the key changes at the company. In Germany, extensive regulations covering this are anchored in the Works Constitution Act. In the event of decisive changes, employees are informed at an early stage.

Corporate management and the employee representative body also maintain an ongoing dialogue. This is all the more important in times of transformation, as far-reaching strategic agreements have to be reached. The Mercedes-Benz Group attaches great importance to constructive cooperation. The results of the ongoing dialogues, and thus the rights of employees as well, are defined, among other things, in a number of plant and company-wide agreements that address a multitude of issues such as mobile working, family leave and home health care.

In the reporting year, the employee representatives and Group management again reached various agreements and arrangements:within the framework of the “Electric only” approach, for example, a new European production setup for the coming years was agreed on in 2022. The agreement provides for production operations for the repositioned product portfolio to be focussed on electric vehicles in the luxury segment. The focus on next-generation electric platforms is a decisive step towards securing the future of European vehicle sites and the jobs there.

Another example is the so-called “job bike": for this, the partners agreed to expand the existing mobility offer for employees of the Mercedes Group AG, Mercedes-Benz AG and Mercedes-Benz Intellectual Property GmbH & Co. KG to include a bicycle loan scheme.

The local youth and trainee representation looks after the interests of trainees and young employees at the German locations. A “General youth and trainee representation body” (GJAV) has also been formed across all locations. It represents the interests of the young generation in the Group, contributes ideas and sets impulses within the framework of its co-determination function. This is achieved through dialogue between the GJAV and the departments, especially with HR.

Effectiveness and results

The effectiveness of the management approach

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The Group-wide employee survey is a key indicator of where the Mercedes-Benz Group stands with regard to various issues from the point of view of employees, and where there is still potential for improvement. One of the topics addressed is corporate culture. The Mercedes-Benz Group generally conducts the survey at least every two years; the last survey was carried out in 2021. A shorter representative sample survey known as the Pulse Check is conducted between the major surveys. These surveys ensure that the Group companies receive extensive feedback from their employees. The survey helps to continuously improve the management and corporate culture and to steadily develop the working culture in the transformation process. In addition, other channels are also open for employees and managers to provide feedback. 

Furthermore, the Mercedes-Benz Group uses the annual “Sustainability Dialogue” to obtain feedback from stakeholders from various sectors of society such as business, associations or science. Within the framework of various working groups, the Mercedes-Benz Group addresses current and future sustainability issues. At the end of October 2022, the “Sustainability Dialogue” was held for the 15th time. The working group “People & Integrity” focused on the question of the success factors for a transformation. The results of the dialogue, which took place in the reporting year, are incorporated into further activities in the areas of integrity and human resources.

The results of the dialogue, which took place as a hybrid event in the reporting year, are incorporated into further activities in the areas of integrity and human resources.

Results

The transformation of the economy creates challenging tasks for companies, and the past year was no different in this regard. It has shown the importance of constructive partnerships between the workforce and the management, as well as between the corporate management and the employee representative body, because this is the only way that viable solutions can be found. With this in mind, the Mercedes-Benz Group and the employee representative body succeeded in reaching
long-term agreements in 2022. Among other things, the new production setup that was agreed on provides for various assembly plants throughout Europe to begin manufacturing products with new technologies. This will safeguard the future of the sites in question as well as the jobs they offer.

In addition, goals have been set for the plants in Hamburg and Berlin. Initial measures have already been launched and implemented on this basis – in particular, qualification measures such as the Digital Pioneers initiative.

International standards apply at the Mercedes-Benz Group, such as the principle of equal pay for work of equal value in the respective company, regardless of gender difference.

The internal auditing department conducts random annual internal audits to determine whether selected aspects of the Corporate Compensation Policy are being complied with. The company did not become aware of any material violations of the policy during the reporting year.

In the reporting period, the Mercedes-Benz Group furthermore expanded its leadership programme with additional offers to sensitise and qualify managers for upcoming challenges and demands on “leadership”.

During the year under review, the Mercedes-Benz Group also expanded its leadership programme to include elements that enable managers to identify coming leadership challenges and requirements, and obtain the qualifications to address them.

Another new programme is “Gear-up": this digital development programme is oriented towards the changing challenges of management. It offers social and digital learning formats, as well as individual coaching elements, to the international group of participants. In addition to new content and impulses, the focus is always on dialogue and networking in the global group of participants. The Group also developed further tailor-made programmes for other target groups.

In this regard, the “People Principles” are elementary as a framework for the development of an agile and innovative management culture.

An important external indicator by which the Mercedes-Benz Group measures its attractiveness as an employer for digital talents (IT graduates in Germany) is the “Trendence study”: The interim goal of the Mercedes-Benz Group is to be among the top seven most popular employers by 2025, and to maintain this ranking. This target was exceeded in the reporting year with 5^th place¹.

The “Pulse check” in 2022 showed that 75% of the employees surveyed are satisfied or very satisfied with the Mercedes-Benz Group as an employer. The next company-wide employee survey is scheduled for 2023.

The loyalty of employees towards the Mercedes-Benz Group is also reflected in the average length of service: this amounted to 16.8 years in the reporting year. In 2022, employees in Germany had worked for the Group for an average of 19.9 years. Outside Germany, the average length of service was 9.7 years. The global employee turnover rate of the Mercedes-Benz Group in 2022 was 7.3%.

1 Target ranking in study by “Trendence“ (Survey period from October 2021 to February 2022) among IT graduates (Germany); Result refers to the then Daimler Group in Germany.

Key figures