Sustainability report


 
Sustainability report
 
 

CREATING AN ENVIRONMENT in which our employees can thrive

Nurturing and managing our employees

With more than 6 300 employees across Africa, SSA, Asia Pacific, Latin America and Europe, Aspen’s human capital represents a diverse group of cultures, languages and competencies. Aspen’s employees are passionate, diligent, committed, loyal and biased towards action in accordance with the Group’s values. Integrity, accountability and teamwork are promoted in working towards achieving business objectives.

The Code of Conduct advocates that all people, including employees, should be treated with fairness, equality and respect to foster an open, transparent, progressive and trusting environment which is free from prejudice, discrimination, bias, harassment and/or violation. This ensures that all employees are treated equally, irrespective of gender, race, physical health, sexual orientation and individual belief systems. There is no discrimination against genders – males and females are given equal opportunities to progress within the Group. At year-end, females comprised more than 51% of the Group’s workforce. Approximately 80% of the Group’s employees are permanently employed.

 


Owing to the rapid expansion of the Group, the integration of consistently applied human resources policies and procedures remains in progress and a central Group human resources structure has been established with this intent. The Group human resources strategy has been revised and approved. The roll out of this strategy will follow a phased approach and implementation has commenced in South Africa. Once the strategy is satisfactorily embedded in the South African business, it will be rolled out to each of the international companies in turn. In the interim, formal decentralised Human Resources departments are in place at each of the Group’s South African, SSA and International business entities. Employees are managed in accordance with existing policies and procedures which are considered to be fair and relevant.

A human resources Forum, comprising senior Group executives, has been established and meets quarterly to monitor and review the progress of the human resources strategic plan for South Africa. The human resources strategic priorities target the following areas of focus:
  • Mastering the fundamentals – revising and standardising human resources policies and procedures in line with best practice
  • Driving organisational effectiveness and efficiency –measuring and managing employee performance against the desired organisational behaviour required to align business activities with the Group’s strategic objectives; and
  • Acquiring, growing and retaining the best talent –attracting, developing and retaining a sustainable talent pipeline to meet organisational needs and groom future Aspen managers and leaders.

Aspen recruits its employees through reputable recruitment agencies and all candidates are considered with reference to defined job specifications. In South Africa, preference is given to historically disadvantaged individuals in accordance with Aspen’s transformation objectives. An Employment Equity Committee is in place at each of the South African business units which meets twice per month to monitor the status of compliance to BBBEE Codes.

The key performance assessment (“KPA“) process is in place throughout the Group for managers and key staff. This process takes place at least annually to define and direct annual functional objectives for managers and professional employees. Performance incentives and annual salary increases for assessed staff are determined with reference to the completion of individual KPAs. Development and training needs are also identified during this process. In South Africa, a revised KPA process has been rolled out to all managers. The Group Talent Development Manager conducted structured training sessions for all managers in South Africa during the year to ensure effective implementation of the new process.

Owing to the defined entrepreneurial culture at Aspen, succession planning is an acknowledged imperative. The Board’s Remuneration & Nomination Committee monitors the adequacy of succession plans for senior executives. In South Africa, the formalised succession planning policy requires succession plans to be in place for the top three tiers of management. Departmental succession plans for the South African business units are monitored and approved by the Head of South African Operations or the Chief Executive Officer South Africa, as appropriate. Succession plans are in place for key executives and managers in the International businesses. The adequacy of these succession plans is monitored by the responsible Group executives. In a similar manner, retention plans are in place for identified key staff members in each business. Retention plans are tailored in accordance with individual circumstances to secure the employee’s services to the Group over the long term.

Employment indicators

Employee movement     Group South Africa SSA International
Number of employees at 1 July 2011     6 067 3 933 890 1 244
Appointment of employees     907 528 51 297
Addition of employees through acquisitions     805 38 798
Termination of employment contracts     (1 386)   (733)   (225)   (428)  
Transfers to international operations     (1)   1
Retirements     (39)   (28)   (11)  
Medical retirements     (17)   (9)   (7)   (1)  
Deaths     (18)   (16)   (2)  
Total Group employees at 30 June 2011     6 319 3 712 696 1 911
– Percentage permanent employees     82% 79% 61% 93%
– Percentage temporary employees     18% 20% 39% 7%
Average employee turnover percentage per region     16% 12% 16% 23%
Average employee turnover percentage per region (2010)      16% 9% 16% 46%

The acquisition of the Sigma pharmaceutical business added a total of 798 employees in Aspen Australia, of which 682 remained employed at 30 June 2011. In South Africa, Aspen acquired African Health Networks (Pty) Ltd and its subsidiary (collectively “AHN”) with effect from 1 June 2011 as a result of which 38 employees were added to Aspen’s South African business and remained with the Group at year-end.

A significant portion of the termination of employment contracts for the Group comprised expiration of temporary employment contracts in South Africa, SSA and the International businesses. At the South African facilities, automation of processes through the facility expansion and upgrade projects resulted in no job losses of permanent staff during the year. However, reliance on contracted employees was reduced. The restructuring of sales representative teams and dilution of public sector business in the Latin American businesses comprised approximately 8% of total terminations.

The Group’s 2011 employee turnover has been calculated with reference to total employee departures as a percentage of average employees. Due to the change in the formula adopted, comparatives have been restated. Aspen aims to maintain its employee turnover below industry norms. Aspen’s average staff turnover of 12% is below the pharmaceutical industry norm for South Africa of 15% as measured by Deloitte. These ratios will be benchmarked against industry statistics which become available for future comparability. Concerted efforts have been made to retain scarce skills such as pharmacists and chemists in the South African business through benchmarking of salaries and expanding the role of pharmacist assistants. Skills development initiatives continue to be promoted with tertiary institutions such as the Nelson Mandela Metropole University and Rhodes University in the Eastern Cape, South Africa. Outside South Africa, the restructure of sales representative teams in the Latin American businesses was the key reason for the higher reported staff turnover ratio. A total of 17 employees retired due to ill-health and 18 employees in the Group passed away as a result of natural causes and non-work-related accidents. Endeavours will be made to benchmark the employee turnover ratios in the International businesses against relevant industry statistics which become available to aid future comparability.

Training and developing our people

More than 4 000 employees received training across the Group, at an average spend of R2 560 per employee.

      Group
Training spend June 2011     R10 866 715
Number of employees trained     4 244
Average investment in training per employee     R2 560
Training spend June 2010     R9 220 954
Number of employees trained     3 130
Average investment in training per employee     R2 946

The quantified training spend represents externally procured training. Training spend per employee was less than that incurred in 2010 as a consequence of an initiative undertaken to eliminate ineffective third party training programmes from Aspen’s training programmes in South Africa. The cost of internal training is not included in this value. Steps are intended to be taken towards developing a reliable system to measure and quantify the cost of internal training in which extensive investment is made. Training programmes conducted during the year focused on developing and enhancing functional skills, GMP update training, health and safety, information systems and management/leadership training. Professional staff across the Group attended professional update training sessions, as required, to maintain professional competence. Legal compliance training sessions were also conducted to maintain an awareness of relevant legislative updates. In this regard, formalised Companies Act and Competition Law training was arranged for all senior managers and Group Legal Compliance staff in South Africa. A summary of international competition regulations was disseminated to managers across the Group. Once read and understood, managers were required to sign a declaration acknowledging an awareness of and compliance to competition legislation.

In Aspen Australia, the main area of focus has been the completion of the integration plan for the Sigma pharmaceutical business, including the integration of the IT and supply chain systems. Post-integration, the training needs of the expanded employee base will be assessed to develop a skills matrix. Functional and compliance update courses continue to be conducted at Aspen Bad Oldesloe where the level of skills and competence employed is inherently high. At Shelys and Aspen Brazil the implementation of the new Enterprise Resource Planning systems was prioritised during the year and hence externally procured training was limited. In East Africa, preliminary assessment sessions for world class manufacturing, fire fighting and HIV/AIDS awareness took place during the year. In Brazil e-learning courses were introduced in respect of marketing strategies, product attributes and marketing dynamics. Administration staff at Aspen Venezuela attended English courses. In addition in-house sales training was conducted for all sales representatives in the Venezuelan business whilst in Mexico employees were trained on GMP, health and safety and senior manager coaching.

Building the skills pool and developing future Aspen leaders

Management and executive development training programmes are important in preparing business leaders capable of delivering the Group’s medium- and long-term strategic objectives. Select executives and senior managers are identified and developed to improve the alignment of their personal aptitude, experience and behavioural profile with the organisation’s strategic intent.

In South Africa, management development programmes are designed to support an employee’s transition into supervisory and management positions. Management development training and executive coaching programmes included key modules for managing change, conflict, compliance, discipline, diversity and interaction as well as high-performance coaching. In total, 269 employees participated in these management development programmes.

In South Africa and Brazil, some members of the management team are completing MBA programmes to build management and leadership skills. In Mexico management development took the form of leadership training and life coaching for senior managers.

Aspen encourages furthering the education of existing employees across all levels of the organisation. In South Africa a total of 61 bursaries were awarded during the year in the following fields:
  • Accounting and Finance
  • Pharmacy
  • Chemistry
  • Operations management
  • Engineering
  • Marketing
In total 228 learnerships are supported in South Africa, 96% of which represent historically disadvantaged individuals. During the year, 103 learners in South Africa successfully completed learnerships and apprenticeship programmes. Learnership programmes target the development of a scarce skills pool in South Africa which includes:
  • 12 productivity learnerships;
  • 12 mechanical apprenticeships;
  • 20 pharmacist assistants learnerships;
  • 23 team leader learnerships; and
  • 36 chemical operations learnerships.

In the International business, 15 learnerships are in place at Aspen Bad Oldesloe in the areas of logistics, manufacturing and engineering. One learnership is in place at Aspen Venezuela in accordance with legislation. In this country, companies are obliged to subsidise towards school fees for students who, after completing their schooling, join a company for a period of 15 months for practical work experience.

Providing a safe working environment

The Group aims to provide a safe and healthy work environment for all employees and third parties. SHE management practices are in compliance with regulations governing health and safety standards in each territory.

In South Africa, a formalised SHE Management Policy provides an overview of Aspen’s SHE objectives and demonstrates the organisation’s commitment to improving SHE management in the business. Senior site management takes responsibility for SHE management at all South African manufacturing sites, marketing and sales regional offices and the Durban corporate office. SHE management is implemented and maintained within the South African business with the support and guidance of a National SHE Department for the development of national SHE standards and compliance verification. At FCC, a dedicated Occupational Safety, Health, Environment and Medical Services Manager is responsible for this function. SHE systems and procedures facilitate legal compliance and the management of SHE risks in order to prevent injury, ill-health and pollution of the environment.

The Hazard Identification and Risk Assessment process is applied to identify significant SHE risks in order to eliminate or mitigate hazards in the workplace. In order to contain residual SHE risks to an acceptable level, action programmes are compiled and monitored in accordance with the hierarchy of control measures which include management, engineering, administration and personal protective equipment. All SHE risks are recorded in a SHE Legal Register in accordance with relevant SHE legislative requirements.

A formal plan is in progress to prepare the South African business for Occupational Health and Safety Advisory Services (“OHSAS”) 18001 certification. SHE system procedures are being drafted for completion early in 2012, and system implementation will be rolled out thereafter in preparation for system certification during 2013. An external SHE legal audit was conducted in 2011 in order to evaluate compliance with all applicable national, regional and local SHE legislation in South Africa. The results of this external legal review were satisfactory.

During the year, numerous health and safety training courses were conducted for various levels of employees at all South African manufacturing sites. Training modules included safe stacking and storage practices, fire fighting, legal overview of the regulations for hazardous chemical substances, biological agents and noise-induced hearing loss, professional drivers permit training, the supervision of the loading/unloading of dangerous goods and incident investigation. In addition, SHE SOP training was conducted for a number of key processes.

In the International businesses, the Bad Oldesloe site is already OHSAS 18001 compliant. SHE management systems in the other International and the SSA businesses adhere to relevant legislation and regulations governing business operations in each territory.

Health and safety training was conducted in Brazil, Venezuela and Bad Oldesloe. At Aspen Bad Oldesloe, health and safety procedures and policies were reviewed and updated. Amendments were necessary to incorporate changes to laws and regulations. A review of the health and safety management systems is part of the integration plan for the acquired Sigma sites in the Australian business and will receive focus in the next year as the new manufacturing strategy for the facilities is implemented.

Under the guidance of the Group Head of Operations, consideration is currently being given to the establishment of centralised oversight for health and safety structures for the Group as well as for environmental management. Once developed, the integration of Group health and safety policy, procedures and compliance management systems will be addressed in this universal platform.

The Disabling Incident Frequency Ratio (“DIFR“) is used to measure the effectiveness of health and safety management at the Group’s manufacturing facilities. The measure is formally monitored at the manufacturing facilities in accordance with the standard formula: DIFR = (number of cases x 200 000 working hours)/(number of hours worked over 12 months) where number of cases includes any work incident impacting an employee’s health which results in lost working hours.

South Africa SSA International
DIFR Unit
1, 2, 3
Sterile
facility
East
London
Aspen
Nutritionals
FCC Shelys Aspen
Australia
Aspen
Brazil
Aspen
Mexico
Aspen
Bad
Oldesloe
Tolerance <1,00 <1,00 <1,00 <1,00 1,00 2,00 To be
measured
from 2012
To be
measured
from 2012
<1,00 <1,00
Actual 0,29 1,04 0,34 1,52 3,20 2,16 To be
measured
from 2012
To be
measured
from 2012
1,20 0,60

Actual DIFR was above the internal tolerance set at certain facilities. Measures have been taken to address the causes thereof.

In Port Elizabeth, an employee was injured during a machine set-up operation. Corrective action was taken to improve the existing machine guarding controls and refresher training on lockout procedures and machine safety was conducted for all setters. Regular preventative maintenance inspections have also been implemented for machine guarding. A contracted occupational medical practitioner has recently been appointed at Aspen Nutritionals to give on-site assistance to employees following an incident. It is expected that this will reduce the quantum of time lost as a result of employees having to go off-site to receive medical attention. At FCC, an employee was injured during manufacturing. In order to improve safety at FCC, facility enhancement projects include an improvement in contained manufacturing capability. Improvements are also being made to engineering controls to prevent employee exposure to hazardous substances. In addition, health and safety training at FCC is receiving increased focus at Shelys in East Africa. Steps have been taken to improve controls around post-incident absenteeism. Employees are encouraged to return to work as soon as possible after injury and employees are offered lighter work until full recovery of the injury. Owing to the high rate of incidents recorded during the year at Aspen Mexico, increased focus has been directed to conducting health and safety awareness and training programmes, including SHE SOP training for production, warehousing and administrative staff. No work-related injuries gave rise to an employee’s death during the course of the year.

Promoting employee wellness

In South Africa, permanent employees are all members of one of three medical aid schemes, partly sponsored by Aspen. Clinic services for occupational medical surveillance, in compliance with statutory requirements, are in place at all manufacturing facilities. Primary healthcare services and employee assistance programmes are reasonably well established at the Port Elizabeth manufacturing site and are currently being reviewed for standardisation across the South African Operations. At FCC, primary healthcare services are provided to employees and occupational health and safety medical assessments are conducted in accordance with legislative requirements.

In East Africa, annual medical assessments are conducted for all employees in accordance with Tanzanian and Kenyan regulations. Health awareness seminars take place frequently and HIV/AIDS voluntary counselling and testing services are also provided.

At Aspen Bad Oldesloe, Aspen contributions are made towards employee medical insurance in accordance with German regulations. An on-site occupational physician is available on a weekly basis to provide free comprehensive medical services to employees. Employees at Aspen Brazil receive a medical subsidy and a first-aid centre is available on-site to assist with basic workplace healthcare needs and to promote healthcare awareness. Employees also have access to a nutritionist. Employees at Aspen Mexico receive a fully subsidised medical plan. Medical assessments are provided to all staff at Aspen Venezuela who are entitled to healthcare insurance on a half-yearly basis.

Supporting HIV/AIDS-infected employees and promoting awareness

Aspen continues to be a significant contributor to HIV/AIDS management programmes in South Africa through the supply of cost-effective ARVs. This commitment is also directed internally in Aspen’s own HIV/AIDS Policy, voluntary testing, counselling support programmes and HIV/AIDS education for its employees in South Africa.

The HIV/AIDS Policy ensures the fair, ethical and equitable treatment of infected employees and specifically prohibits any discrimination based on an employee’s HIV/AIDS status, in particular, when considering promotion or other career opportunities. The HIV/AIDS Policy is reviewed every three years to comply with the latest medical and legal guidelines and prescribes confidentiality of the employee’s status. Employees are encouraged to seek medical treatment, counselling, ongoing testing and assistance from support groups and HIV/AIDS awareness programmes are conducted on an ongoing basis. The Group disseminates information booklets on the prevention, care, support and treatment of HIV/AIDS. Posters, leaflets, T-shirts and caps are distributed from Khomonani Resources Centre and QualSA.

Aspen has appointed independent health risk management specialist, QualSA, to manage the HIV/AIDS programmes in South Africa. Through QualSA, HIV/AIDS testing is offered to all employees in the South African business every two years. Voluntary HIV/AIDS testing conducted for employees during 2010 reported that 5% (2008: 4%) of employees tested in South Africa were found to be HIV/AIDS positive. A total of 1 202 employees participated in the voluntary testing process conducted during 2010 (2008: 1 671). Infected employees have access to free medical treatment, counselling, ongoing testing and group assistance. QualSA also provides support to employees and their immediate family members who are not covered by a medical aid.

A “Knowledge, Attitudes, Perceptions and Behaviour“ survey is conducted annually which provides information on employees’ perception of HIV/AIDS in the workplace. The results of the confidential survey are used as input into the relevant intervention programme planned for the following year.

Aspen acknowledges World AIDS Day on 1 December and World Tuberculosis Day on 24 March. Playing cards displaying HIV/AIDS and TB messages and facts were distributed to employees in South Africa and visual media was used to raise awareness. Informational booklets received from peer educator groups were delivered to Aspen’s CSI beneficiary, MaAfrika Tikkun in Johannesburg.