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Christian Lepsien -Attorney-at-Law- Human Resources Management, Deutsche Telekom AG, Bonn

Christian Lepsien -Attorney-at-Law- Human Resources Management, Deutsche Telekom AG, Bonn. Privatisation, Restructuring and Employee Retrenchment: Issues and Policy Responses OECD Conference Istanbul 10 October 2002. Deutsche Telekom Personnel Restructuring

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Christian Lepsien -Attorney-at-Law- Human Resources Management, Deutsche Telekom AG, Bonn

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  1. Christian Lepsien -Attorney-at-Law- Human Resources Management, Deutsche Telekom AG, Bonn Privatisation, Restructuring and Employee Retrenchment: Issues and Policy Responses OECD Conference Istanbul 10 October 2002

  2. Deutsche Telekom Personnel Restructuring Government Agency Turns Global Player 1 The Transformation 2 Personnel restructuring within the Group 3 Support from social partners for personnel restructuring

  3. After first post & telecoms reform Prior to first post & telecoms reform After second post & telecoms reform From a National to a Global PlayerHow Deutsche Telekom Has Evolved Since 1990 DeutscheBundespost Telekom Deutsche Telekom AG Deutsche Bundespost 1990 2001 1995 2000

  4. Deutsche Telekom Personnel Restructuring Government Agency Turns Global Player 1 The Transformation 2 Personnel restructuring within the Group 3 Support from social partners for personnel restructuring

  5. Deutsche Telekom Personnel RestructuringFrom a National to a Global Player 254,806 228,912 Holding 6,085 Acquisitions 90,000 Telekom AGdepartures 103,079 Telekom AG 222,827 164,806 Additions 38,973 Holding41,919 Transfer AG  Affiliates:23,492 Telekom AG 122,887 31.12.94 30.06.02

  6. Human Resources Rightsizing and Rebalancing Acceptance of Human Resources Rightsizing Measures 1995 - 1998 1999 2001 3.3 % 5.3 % 7.5 % 3.5 % 17.6 % 16.7 % 33.4* % 1.0 % 5.0% ca. 70,000 ca. 11,000 ca. 9,000 14.7% 29.1 % 56.9 %* 79.3 %* 0.4 % 7.4 % 5.4 % 13.0 % 0.3 % Natural fluctuation Early retirement civil-s.-status empl. Severance pay Early-retirement tariff staff Job-switch bonus civil-s.-status empl. Switch to third-party employer *Incl. invalidity, dismissals, resignations and other natural fluctuations

  7. Deutsche Telekom Employees Abroad 1998 1999 2000 2001 6.2002 Total 16,815 23,098 47,818 78,722 76,243 Employees x 1,000 HT Hrvatski Telekom 11,053 11,067 30.6% 80 29.9% T-Mobile USA 16,665 17,258 % of Groupwork-force 70 T-Mobile Czech 2,479 2,536 debis Systemhaus 8,510 9,134 8,907 60 SIRIS 339 527 603 566 21.0% 50 Eurobell 692 T-Online France 469 520 452 40 Ya.Com 243 274 254 30 T-Mobile Austria 2,419 2,971 2.813 2,642 11.7% 20 4,050 6,876 6,384 6,216 T-Mobile UK 8.5% 13,298 11,296 9,523 Slovenske Telekomm. 10 16,595 15,365 14,351 16,634 16,241 MATAV 0 220 233 573 867 581 Others ‘98 ‘99 ‘00 ‘01 6.‘02

  8. Deutsche Telekom Personnel Restructuring The Role of the Social Partners 1 The Transformation 2 Personnel restructuring within the Group 3 Support from social partners for personnel restructuring

  9. Deutsche Telekom Personnel Restructuring Strategic Co-operation with Deutsche Telekom’s Social Partners Employeerepresentation committees within the Group Supervisory Board Trade Unions • Ver.di (civil service, banking, retail workers, etc) • IG Metall (metal workers) • KommunikationsgewerkschaftDPV (DPV KOM)(communications) • Christliche GewerkschaftPost und Telekommunikation(CGPT)(Christian; post&telecom) • Group works councils • Central works councils • Local works councils • Corporate Group ExecutiveStaff Representation Committee • Executive StaffRepresentation Committee

  10. Human Resources Rightsizing and Rebalancing Key Elements Agreement with ver.di creates the necessary conditions • To solicit close and reliable support from social partners for personnel restructuring measures within the Group • To strengthen the company and provide added job security in today‘s competitive marketplace • To create forward-looking job structures • Inclusion of ver.di/central works council in the bodies set up to facilitate personnel restructuring measures (extended Deutsche Telekom sites committee/advisory committees) • Provisions for necessary qualifications measures/ skills data base • Measures to improve human resources rebalancing and transfers within the Group • A systematic waiver, until the end of 2004, of the right to dismiss personnel for operational reasons Objective of Key Elements Agreement Major items of agreement

  11. Christian Lepsien -Attorney-at-Law- Human Resources Management, Deutsche Telekom AG, Bonn Privatisation, Restructuring and Employee Retrenchment: Issues and Policy Responses Thank you for your attention!

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