Aspect 2: Employee concerns

The digital transformation is supposed to improve everyone’s lives. That is why people will remain a priority for us. This applies in particular to the around 217,300 employees working in our Company. They use their commitment, their expertise, and their abilities to smooth the path towards a digital society and make a key contribution to our business success. Five Guiding Principles, representing our values, form the cornerstones for collaboration within our Company. Our Guiding Principles are stated in the section “Group organization.” Our strategic priorities in HR focus on four areas. For further information, please refer to the section “Employees.” We value participation and cooperation based on fairness, we promote diversity, and engage in systematic health management. 8

 

COLLABORATION WITH EMPLOYEES’ REPRESENTATIVES AND TRADE UNIONS

Digitalization is fundamentally changing the way we work together. Employees are expected to show more flexibility, social skills, and personal responsibility. They also need to be life-long learners and be more self-directed. We have made it our goal to support our employees in this transformation – and to help them not only manage change, but also take an active role in shaping it.

Codetermination rights play a key role in the digital transformation. We want to create the working world of the future together with employees’ representatives and trade unions – with an eye to the needs of our workforce and the success of our Company. We negotiated and signed over 250 agreements in 2017 through constructive dialog with our works councils. One key project was the organizational measure “Einfach Anders” (Simply different), which focused on a re-alignment of the entities within the Germany operational segment. The new organizational structure allowed us to harmonize the management of service responsibilities combined within the Service board department, to establish a customer-centric sales process for consumers and business customers in separate sales entities, and to combine the activities for the network build-out in a single entity. We concluded another 65 collective agreements with the ver.di union in 2017. In order to make phased retirement an even more attractive option for leaving working life early with sufficient social security, a general collective agreement on phased retirement was concluded in 2017 between Arbeitgeberverband für Telekommunikation und IT e.V. (agv:comunity e.V., the employers’ association for the telecommunications and IT industry) and the ver.di union. 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.  17

The works councils, central works councils, and Group Works Council represent the interests of the 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 representatives of disabled employees at unit, company, and Group level. The EWC, which currently has 32 members, has been a key dialog partner for us for many years and represents the interests of Group employees within EU countries. 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, 2016, 69 percent of employees in Germany were covered by collective agreements.

We thoroughly accompanied the union topics in our operative segment USA in 2017 and discussed individual issues in dialogs with T-Mobile US’ management. The responsibility for national Human Resources Management matters lies with T-Mobile US’ management. This responsibility is carried out with great commitment and accompanied by excellent customer satisfaction results. In a US-wide survey of 360,000 customers carried out by market researcher “HarrisX”, T-Mobile US achieved the highest customer satisfaction rates among all mobile providers in the US in each of the four quarters in 2017.

Deutsche Telekom respects freedom of association and the right to collective bargaining in accordance with national regulations. This naturally applies to the USA as well. Employees at T-Mobile US have the right to form and join a trade union. At the same time, employees are also free to choose not to do so. T-Mobile US will not favor or impede employees on the basis of their choice.

T-Mobile US’ employee survey results for 2017 show that as many as 93 percent of respondents take pride in working for T-Mobile US. A further 84 percent said their company inspires them to “go above and beyond” their normal job duties to help the company succeed and another 88 percent said they often recommend T-Mobile to others as a great place to work. These results are among the highest in all of Deutsche Telekom group companies.

T-Mobile US has also been honored with a Glassdoor Employees’ Choice Award, recognizing the Best Places to Work in 2018. The Employees’ Choice Awards program, now in its 10th year, relies solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies via Glassdoor. More than four out of five (81 percent) T-Mobile employees say they recommend the company to a friend – the highest in the US wireless industry. In addition to the Glassdoor award, T-Mobile US also received further recognitions for Best Places to Work throughout 2017.

Collaboration with employee representatives is based on our commitment to trusted cooperation – anchored in our Group-wide Employee Relations Policy. It sets out eleven core elements to describe what we stand for as an employer around the world. The policy also describes our aspiration with regard to the following HR topics: employee development, responsible handling of changes, health and sustainability, fair pay, work-life balance, leadership, diversity, the prohibition of discrimination, and how we communicate and work together with employees’ representatives. In order to ensure the Employee Relations Policy is implemented throughout the Group, two or three national companies undergo an internal review process each year. If the results of this review deviate from the norm, we initiate improvement measures. Our Code of Human Rights & Social Principles also includes a voluntary commitment to the freedom of association and collective bargaining (in compliance with national law in each case).

Our employee survey, carried out every two years, is a key indicator of the relationship between our Company and its workforce. We supplement it with pulse surveys, which give us a snapshot of the mood across the Group twice a year. In the most recent 2017 employee survey (excluding T-Mobile US), the commitment index was 4.1 (on a scale of 1.0 to 5.0) and therefore remained at a high level. For more detailed information, please refer to the section “Employees.”

DIVERSITY AND EQUAL OPPORTUNITY

Social trends like globalization, demographic developments, and different understandings of roles must not result in individual groups being shut out of the labor market. Equal opportunity is not only essential to a stable society, but to our Company as well. Respecting human individuality and harnessing individuals’ distinctive traits for joint success is just as important for our Group as developing a shared identity. A Culture & Diversity Team, based in the HR Development unit, was created specifically for this task.

Women and men, young and old as well as people with different abilities and cultural backgrounds from roughly 150 countries work together very effectively at our Company. This diversity helps us remain competitive around the world with good ideas and outstanding products and consolidate our position as an attractive employer. Developments in the share of women in leadership positions and on the supervisory boards are reported to the Board of Management every six months, while the age structure and internationality of the workforce is reported on an annual basis in our Personnel Structure Report. For us, diversity also means offering our employees numerous opportunities to develop personally and grow professionally, regardless of their gender, age, sexual preference, health situation, ethnic background, religion, or culture. Our Group-wide Diversity Policy, five Guiding Principles, Employee Relations Policy, and Code of Human Rights & Social Principles form the foundation for our commitment. We are also a founding member of the Diversity Charter corporate initiative and want to promote diversity within and outside of our Company. For detailed information on our diversity measures, including on the advancement of women, please refer to the section “Employees.” In order to comply with the new legal requirements set out in the Act to Promote Transparency of Pay Structures, we filed a separate report, which does not form part of the audited management report. 10

OCCUPATIONAL HEALTH AND SAFETY

Measures that promote health within the Company not only help individual employees and ensure long-term business success, but also have positive effects on society as a whole. We use health management to take on social responsibility and proactively promote a culture of health. We support our employees in maintaining their health and occupational safety with a host of target audience-specific measures and extensive prevention programs. We consider the statutory requirements to be only the minimum standard we must achieve. Our corporate occupational health and safety measures are effectively incorporated into our structures via certified management systems and appropriate policies and guidelines. We support this Group-wide approach with a uniform Health, Safety & Environmental Management system at international level, based on international standards OHSAS 1800, ISO 14001, and ISO 9001 for health, occupational, and environmental safety, and quality. 3

The Board of Management assumes overall responsibility for occupational health and safety, and environmental protection. Quarterly reports on the health rate are just one example of its commitment in this area. Our Health & Safety Environment handbook describes the details of our health and safety management system, including the parties involved, their duties, and the programs. The handbook serves to harmonize, simplify, and align our management system with common targets across the Group. We combine and control our occupational and health safety programs at Group level; health and safety managers are responsible for implementing these programs locally. We systematically review our programs to ensure they are effective. To do so, we review the results of our employee survey, evaluating stress prevention measures under collective agreements, competitor benchmarks, and other relevant indicators. We analyze this data each year to derive measures that exceed the statutory requirements. Raising awareness, prevention, and encouraging individual responsibility have a high priority at our Company.

We use Group-wide initiatives to promote health awareness and health literacy among all employees. These include services that can be used by all teams in 30 countries based on the results of the health index, which is determined every two years. Occupational health promotion in Germany covers a range of services for employees, such as stress prevention programs; flu vaccinations; colon cancer screening; information on diet and nutrition, exercise, and relaxation; and a comprehensive annual health check-up. We also offer psychosocial support to our employees and managers. Standards in Germany serve to improve occupational safety by regulating aspects such as safe, ergonomic environments in buildings and vehicles. We also offer driver safety training (car and motorbike) for all employees and their relatives, as well as cycling schemes for employees at various locations across Germany. Alongside generally available services, we also have target group-specific programs in place, such as driver safety training for specific areas of work or training on the prevention of falling accidents in cooperation with the “Tritt sicher” (step safely) campaign developed by Berufsgenossenschaft Verkehr, the German professional association for transport and traffic. By raising awareness and implementing preventive measures, our aim is to promote employees’ health and motivation, improve the health rate, and continue to reduce the accident rate.

Many different key figures demonstrate the effectiveness of our corporate health management services. The health rate (including long- term illnesses) at Deutsche Telekom in Germany decreased slightly in 2017, by 0.1 percentage points to 93.7 percent, although it remained at an average level. The health rate is reported to the Board of Management at the end of each quarter. In 2017, we launched a project designed to improve the health rate by 2020. The aim is to achieve a health rate across the Group of 95.9 percent (excluding long-term illnesses). The total number of work-related accidents continued to decline in the reporting year in comparison with the previous year. The accident rate in Germany was 8.5 accidents (resulting in over three days of absence) per thousand employees, well below the industry average. The Group-wide health index – calculated as part of the 2017 employee survey in 30 countries – increased positively by 0.1 to 3.6 (on a scale from 1 to 5). From 2018, new steps will be taken designed primarily to improve the health rate. These include, for example, a workshop in which managers learn about a range of short-, medium-, and long-term strategies to influence the health rate. They will also be given the skills to become more confident at handling healthy and sick employees. The initiative will be piloted in Germany with the goal of rolling it out across the Group by 2020.

The digital transformation is also taking on an increasingly important role in the context of health. In addition to identifying potential stressors triggered by the effects of digitalization, our current products are also being adapted to the demands of rising levels of virtualization, digitalization, and internationalization on a step-by-step basis. For example, we already offer web-based training for managers on health and safety, mental health, and operational integration management.