At our company, diversity drives progress. It strengthens our ability to innovate and contributes to our success in science and technology. We encourage employees, patients and customers to be their individual, curious and unique selves. The more diverse our people, the better we can succeed in business while making a difference in people’s lives.
Our approach to diversity, equity and inclusion
In 2021, we strengthened and expanded our commitment to diversity. While we have always been a diverse organization – today spanning 66 countries, with more than 60,000 employees – we recognize that the success of our organization depends on our ability to foster an environment that promotes equity and cultivates inclusion.
Together, we are building one culture in which we care about one another and are solidifying a sense of belonging for all so that our different voices are heard to drive better business outcomes. Ultimately, we are creating opportunity and enabling advancement for employees around the globe.
To reflect our expanded DE&I commitment, we are focused on three critical priority areas:
Gender
We are aiming for gender parity in leadership positions by 2030. In 2021, we increased the share of women in leadership roles to 36% (2020: 35%) and maintained a stable 43% proportion of women in the global workforce.
Women in leadership
Culture and ethnicity
By 2030, we plan to increase the proportion of colleagues in our United States leadership teams who are members of underrepresented racial and ethnic groups from 21% to 30%. We continue to pursue self-identification efforts to help us further understand our organizational structure as regards culture and ethnic representation.
With 23% of our employees based in the United States, it is crucial that we become an employer of choice among racial and ethnic minorities in this market. We continually listen and learn from our colleagues in the market to ensure our workforce reflects the talent currently available in the marketplace.
Share of underrepresented racial and ethnical groups in US leadership
Additionally, due to our current performance and future growth in Asia, Latin America and the Middle East and Africa (MEA), accounting for 40% of our Group sales, we aim to increase the global share of nationals from Asia, Latin America, and MEA in leadership positions from 16% to 30% by 2030.
Global share of nationals from Asia, Latin America, Middle East & Africa in leadership
Inclusion
For us, inclusion means creating a culture and environment where everyone can reach their full potential and is able to add value. Our leaders are key to achieving this. In 2021, we began rolling out a Group-wide program to help leaders reflect on how they can lead more inclusively. All leaders, including new ones, are required to actively participate. In the reporting period, 37% of our leaders participated in this inclusion training. We also monitor progress using our Employee Engagement Survey inclusion score. Additionally, countries and sectors can focus on further diversity dimensions such as LGBTQI+, different abilities, age diversity, or veteran/military status.
A cornerstone of our DE&I strategy is to foster an inclusive culture in partnership with over 40 employee resource groups (ERGs) across the globe. With nearly 4,500 employees involved in one or more ERGs, we are able to build awareness of matters impacting our diverse workforce through programs and open dialogue. Our ERGs range from Women in Leadership to our Black Leaders Network and our Leaders of Ethnicity Allies and Faith.
We take action against all forms of discrimination, aspire to build teams with a balanced age structure, diverse educational backgrounds and experience and create an international working environment. As part of our DE&I strategy, we also encourage our managers to actively build diverse teams by considering training opportunities to raise awareness and working to have diverse candidates in the selection process when interviewing for roles. Diversity figures are part of compensation-related corporate goals. In 2021, we developed a prediction algorithm to support the modeling and tracking of our DE&I KPIs.
We integrate our inclusion concept into all Human Resources programs, training offerings and processes. The inclusion concept is embedded in our Merck behaviors and explicitly calls for open and supportive collaboration.
We advocate for openness and diversity. For this purpose, we work on recognizing unconscious bias and its impact on everyday work. We use training courses to raise awareness among managers and employees and show how these biases can be actively addressed, both in interpersonal relations and decision-making processes.
Roles and responsibilities
Our Chief Diversity, Equity and Inclusion Officer is responsible for our global Diversity, Equity and Inclusion (DE&I) strategy and steering related activities. In this role, she reports directly to the Chair of the Executive Board, whose responsibilities include Group Human Resources.
In addition, we have a centralized Diversity Council that consists of high-ranking executives from all our business sectors and select Group functions. The Diversity Council members:
- Visibly and actively support equity and inclusion across a corporate strategy and related activities.
- Act as ambassadors and advisors to the Executive Board and managing directors in country organizations.
- Propose strategic goals, initiating measures and ensuring within their respective units that line managers meet their responsibilities.
- Exchange information, discuss the latest challenges, share best practices, and align on next steps.
- Act as role models within their business units and among our workforce.
- Work across businesses, functions and countries to integrate DE&I within our daily work for the benefit of our employees and customers.
In addition, all business sectors and major Group functions have various working groups at management level that implement the Diversity, Equity and Inclusion strategy in their area of responsibility.
Our commitment: Industry-wide initiatives and regulations
Our Social and Labor Standards Policy spells out that we do not tolerate any form of discrimination, physical or verbal harassment or intolerance. To underscore our commitment to equality, fairness, inclusion, and tolerance in the workplace, we also participate in industry-wide initiatives.
- The “Women’s Empowerment Principles”, an initiative of UN Women and the UN Global Compact network, help to promote gender equality and women’s empowerment in the workplace. In 2021, we joined the “UN Target Gender Equality Programme”, which supports companies in achieving gender balance in business.
- The “Inclusion Action Plan” of the German Mining, Chemical and Energy Industrial Union (IG BCE) defines concrete measures to create a more inclusive workforce for employees with disabilities. In endorsing this plan, we are meeting the requirements of the United Nations Convention on the Rights of Persons with Disabilities.
- The “Equal Opportunity Charter”, through which we promise to do everything in our power to achieve gender equality within our company.
- The German “Diversity Charter” a corporate initiative with over 4,500 signatories to promote diversity in companies and institutions; we signed their Charter back in 2013 and became a full member of the association Charta der Vielfalt e. V.
Moreover, we are a signatory to the Business Coalition for the Equality Act, an alliance of leading companies in the United States. Additionally, we participate in various causes near our sites. Thereby, our employees can support our efforts towards an inclusive workplace and community. In 2021, we partnered with Disability:IN to promote the full inclusion of people with disabilities.
Meeting statutory requirements
The German Law for the Equal Participation of Women and Men in Leadership Positions in the Public and Private Sector has been in effect in Germany since 2015. Owing to our legal form as a KGaA (corporation with general partners), this law also applies in part to us.
With a 37.5% share of women (six out of 16 members), our Supervisory Board already meets the stipulations of German gender quota legislation. As a KGaA, we are not required to set targets for our Executive Board. Our Executive Board currently has a 20% share of women (1 out of 5). Detailed information can be found in the Statement on Corporate Governance in our Annual Report.
Rooting out unconscious bias
We seek to raise awareness of unconscious bias among our managers and employees, also through Group-wide training courses on this topic. Since 2021, we have been using new technologies in the context of recruitment in order to support the use of gender-neutral language, for example when creating job advertisements. This is intended to reduce unconscious bias in the hiring process and ensures that our job advertisements are attractive to diverse talent.
Pay Equity Analysis
Our commitment to pay equity is an important aspect of our DE&I strategy. In order to create transparency on unexplained pay gaps and their underlying root causes, we conducted a pay equity analysis in 2021. In this first step, we analyzed our top ten countries covering roughly 80% of our employees. The focus of the analysis was on pay gaps based on gender. The detailed data analysis had not yet been completed at the end of 2021. Based on the initial findings, we continue to create a detailed action plan and work on business alignment to ensure fair pay for all our employees.
Inclusive leadership
We provide a framework for DE&I education and empowerment to support inclusive leadership strategies and tactics. To maximize the impact of our leaders in building diverse and inclusive teams, our Executive Board approved the launch of the Inclusive Leadership Program (ILP) as part of our global inclusion KPI. The ILP combines global leadership interactions, peer coaching, continuous self-reflection, and leadership accountability. It is mandatory for all our leaders, including new leaders. In 2021, 37% of our leaders took part in the course.
Fostering diverse talent
HR supports our business units in fostering talent of various origins and increasing the proportion of women in leadership roles. At the end of 2021, 36% of leadership roles were held by women and we are on track to achieve gender parity by 2030.
We continue to create a strong internal female talent pipeline and promote women into leadership positions while also actively sourcing female talent externally. We focus on internal development and external sourcing of international and underrepresented ethnic talent. In an effort to improve balance referrals, in the reporting year we piloted a 25% increase in bonuses for employees in the United States for successful referrals of qualified diverse candidates. We monitor diversity in succession planning, particularly for senior positions. To help understand demographics, we conducted self-identification campaigns in certain regions to encourage employees to voluntarily provide information on ethnicity, different ability or veteran status in 2021. To help promote diversity in hiring for internal roles, we also offered numerous mentoring, sponsoring and talent programs for women and other target groups, such as underrepresented ethnic groups.
We are convinced that our talent programs and open discussions about unconscious bias contribute to further increasing inclusivity and sense of belonging among our workforce.
Our employees have the option to flexibly calibrate their working time and to work remotely, which also contributes to greater professional and personal opportunities for more colleagues. Additionally, we offer our employees information on remote working and mental health, for example, in order to support their lifestyles, well-being and personal circumstances.
Integrating international employees
Our company is becoming increasingly international. We currently employ people from 142 nations. Our leadership includes representatives of 79 nationalities. As of the end of 2021, 10% of our workforce worked outside their home countries.
To best facilitate this international collaboration, we offer intercultural training for all employees along with appropriate digital tools. For instance, our Cultural Navigator helps prepare our staff for international projects and business trips abroad. To help employees transferred abroad to adjust more quickly, we offer language training and international networks. For instance, more than 700 expatriate employees are members of the International Community, which meets regularly in Darmstadt.
Networks strengthen diversity, equity and inclusion
We support more than 40 local and global employee resource groups (ERGs) and action networks, including our internal women’s networks and networks that advocate for the LGBTQI+ community, employees of various ethnic origins, international employees, and employees with care responsibilities. In 2021, we created new networks for people with different abilities and veterans. In collaboration with our networks in North America, we established 24 Site Inclusion Teams across our locations, focusing on driving inclusion at our manufacturing sites.
Involvement in area-specific or interdisciplinary networks is an opportunity for all employees to acquire leadership competencies. At the same time, these employees bring their experience and perspectives to our company. We therefore ensure frequent touch points and communication with these groups.
Our networks drive inclusion
Tapping into external networks
For more than ten years, our company has been a corporate partner of the Healthcare Businesswomen’s Association (HBA). We are represented both in global and European advisory boards. The HBA advocates for women in the healthcare industry almost exclusively through volunteer work. We explicitly support employees who want to volunteer for the HBA and sponsor various events. In 2021, employees in Belgium, France, Germany, the Netherlands, Switzerland, and the United Kingdom volunteered for the HBA – some as members of the European Regional Council, some as chairpersons or chapter president and some as leaders or committee members of regional or local HBA teams.
Taking action against discrimination
We do not tolerate any kind of discrimination in our company. This is stipulated with binding effect in our Code of Conduct and our Social and Labor Standards Policy. Should employees experience harassment or discrimination in the workplace, they can report the issue via various channels. Their first points of contact are either their supervisor or our Human Resources (HR) or Compliance teams. Alternatively, employees throughout the Group have the possibility to call our Compliance hotline anonymously. As part of our “Group Compliance Case Committee”, HR coordinates suspected cases relating to human resources topics. In 2021, seven suspected cases of discrimination were reported via the compliance hotline and other channels. Of these reports, six incidents were confirmed.
Solid ranking in diversity, equity and inclusion indices
We continue to make progress on integrating diversity, equity and inclusion within our business.
The American Human Rights Campaign Foundation rated our LGBTQI+ activities. We scored 100% in the “Corporate Equality Index” (CEI) 2022, which measured the equality and inclusion of LGBTQI+ employees.
We ranked seventh in the “World’s Top Female Friendly Companies 21” list by Forbes, which identifies the companies leading the way when it comes to supporting women inside and outside their workforces.
In the Financial Times ranking, we were selected as one of the leading 150 (out of over 15,000) companies on diversity.
We scored sixth in the “German Diversity Index” published in June 2021 by BeyondGenderAgenda. The index reflects the transparency of the diversity commitment of the DAX 30 (as of September 2021: DAX 40) companies in their annual and sustainability reports of 2020.
We ranked eighth in the 2021 “BCG Gender Diversity Study” by the Boston Consulting Group and the Technical University of Munich. This study rated management board and supervisory board gender diversity among Germany’s largest publicly listed companies.