People

During 2011, we hired approximately 6,400 permanent employees to replace leavers, to fuel the expansion of our business in Emerging Markets and to build the new capabilities required to implement our strategy successfully. With 1,400 of the new hires having joined AstraZeneca in China and 400 in Russia, we have developed a range of innovative approaches to ensure that we have an attractive employer brand globally and to help us achieve our ambitious growth plans in these markets. During the course of the year, we have also successfully attracted key talent to supplement critical capabilities across the business, including in payer excellence and personalised healthcare, and to refresh our leadership pipeline in key areas.

In parallel, we have invested significant management time over the last 12 months to better understand the key drivers influencing employees’ decisions to leave across the business, particularly in markets where conditions are most volatile. We have implemented a range of initiatives to minimise the risks to the business from such attrition.

We encourage and support our people in achieving their full potential by providing a range of learning and development (L&D) programmes. These are designed to build the capabilities and encourage the behaviours needed to deliver our business strategy.

We have a global approach, supported by the creation of our global talent and development organisation, to ensure that high standards of L&D practice are applied across the organisation. We continue to develop and deploy instructor-led and online development resources, which we aim to make available to all employees to increase access to learning and to support self-development.

We recognise the importance of good leadership and its critical role in stimulating high levels of performance and engagement. Our leadership development frameworks are focused on the core capabilities which we believe are essential for strong and effective leadership. These capabilities are defined for each level in the organisation and apply to all our employees.

Alongside judicious hiring of new leaders into critical senior roles, such as recently into our R&D organisation, the development of an internal pipeline of future global leaders is a high priority. We work to identify individuals with the potential for more senior and complex roles. These talent pools provide succession candidates for a range of critical leadership roles across AstraZeneca. We regard these individuals as key assets to the organisation and we proactively support them to reach their potential through, for example, global talent development programmes and targeted development opportunities.

We complement our leadership capabilities with a set of manager accountabilities which define what we expect from our managers. Building line manager capability is supported by a suite of global learning programmes which we have extended during 2011, addressing people management, change management and other critical capabilities.

We remain committed to making full use of the talents and resource of all our people. We have policies in place to avoid discrimination, including on the grounds of disability. Our policies cover recruitment and selection, performance management, career development and promotion, transfer and training (including re-training, if needed, for people who have become disabled) and reward.

Our global workforce provides a diversity of skills, capabilities and creativity and we value the benefits that such diversity brings to our business. We aim to foster a culture of respect and fairness where individual success depends solely on ability, behaviour, work performance and demonstrated potential. As we continue to reshape our organisation and geographic footprint, our ongoing challenge is to ensure that diversity in its broadest sense is reflected in our workforce and leadership, and integrated into our business and people strategies.

We have made progress on our evolving global diversity and inclusion strategy following research carried out in 2010 to better understand the barriers to women progressing into more senior roles in the organisation. Under the leadership of a global steering group chaired by our CEO and made up of senior leaders from across the business, we are driving change in three key areas: ‘Leadership & Management Capability’; ‘Transparency in Talent Management & Career Progression’; and ‘Work Life Challenges’. We track gender representation at different levels of the organisation and the country of origin of our senior leaders to measure progress over the medium term.

We use a variety of global leadership communications channels to engage employees in our business strategy. These include face-to face meetings, video conferencing and Yammer (a social media tool) to encourage two way dialogue to take place. For the second year in a row our annual global employee survey (FOCUS) included an open text feedback mechanism, with around 19,000 comments made on a variety of topics.

We measure levels of engagement, the effectiveness of our communications and other areas critical to the performance of our business, such as leadership and management capabilities, through our FOCUS survey. The results are communicated to all employees. Ninety one percent of our people participated in 2011. Our employee engagement score increased by one percentage point from 2010, restoring it to 2009 levels. The leadership category score improved by two percentage points and the leadership communication score, which was identified as a priority after last year’s survey, improved by four percentage points. In 2012, we will build on this further, with particular emphasis on clarity of direction and prioritisation from leadership teams.

FOCUS engagement scores

A further area of attention in 2011 was work-life balance, given scores in this area had declined between 2008 and 2010. A set of global work-life balance principles was agreed and communicated in April 2011, initiating a range of activities across the business including manager dialogues, better use of virtual meeting technologies, and health and wellbeing initiatives. Work-life balance category scores improved by two percentage points this year, and we intend to maintain momentum in this area during 2012.

A key element of our people strategy is the continued development of a performance culture across the organisation. By strengthening our focus on setting high quality objectives aligned to our business strategy, and ongoing coaching and feedback, we strive to ensure that performance at all levels of the organisation delivers value. The Board is responsible for setting our high-level strategic objectives and monitoring performance against them (see the Operation of the Board section). Managers across AstraZeneca are accountable for working with their teams to develop individual and team performance targets, and for ensuring that our people understand how they contribute to overall business objectives.

We will continue to empower our leaders to drive performance, to hold our managers accountable for understanding and delivering against the standards required, and to provide the tools necessary to reward outstanding contributions.

Our focus on optimising performance is reinforced by performance related bonus and incentive plans. AstraZeneca also encourages employee share ownership by offering the opportunity to participate in various employee share plans, some of which are described in the Directors’ Remuneration Report and also in Note 24 to the Financial Statements section.

The composition of our global workforce continues to evolve. Our strategic focus on business growth in Emerging Markets has meant the workforce in these areas has grown substantially (as shown in the Sales and Marketing workforce composition figures below). This increase has been accompanied by headcount reductions as a result of our continuing strategic drive to improve efficiency and effectiveness. Reductions have come about through restructuring in R&D, supply and manufacturing, support functions and our sales and marketing workforce in Established Markets, together with the disposal of our Astra Tech business. The net effect of these changes since the end of 2006 has been to reduce our total headcount by some 9,600 from 66,800 to 57,200. This decrease includes a reduction of 2,600 positions in 2010 and a further 5,000 in 2011 which resulted from our business change plans announced in 2010.

Sales and Marketing workforce composition 

In 2011, the most significant business change was the implementation of the R&D strategy announced in 2010, which also involved a number of site changes. While the net impact by the end of 2011 was a reduction of approximately 1,400 roles, almost all R&D employees worldwide were impacted in some way by this change. In order to mitigate further job losses, over 750 employees were redeployed where appropriate skills and capabilities allowed. We were committed to ensuring that AstraZeneca’s core values, robust people policies, consultation infrastructure and prior experience were integrated into this multi-faceted business transformation. Trade unions and employee representative groups were involved throughout the restructuring process. With significant investment in outplacement support, high levels of success have been achieved in finding employees alternative opportunities outside AstraZeneca.

In addition, there were reductions in the number of roles in several areas of our sales and marketing organisation in 2011, which were incremental to the ongoing restructuring programme announced in 2010. The most substantial reduction was in the US, where we announced in December that the sales force would be reduced by approximately 1,150 leadership positions and sales representative roles by the end of February 2012.

In February 2012, we announced the next phase of restructuring. Further details are set out in the Our strategic priorities to 2014 section.

We work to ensure a level of global consistency in managing employee relations, while allowing enough flexibility to support the local markets in building good relations with their workforces, taking into account local laws and circumstances. To that end, relations with trade unions are nationally determined and managed locally in line with the applicable legal framework and standards of good practice. However, each change programme has its unique challenges and a standard solution may not always be appropriate. Where this is the case, the appropriate solution is developed through consultation with employee representatives or, where applicable, trade unions, with the aim of retaining key skills and mitigating job losses.