Employees

On December 31, 2008, the Bayer Group had 108,600 employees worldwide, compared with 106,200 at the end of 2007. The net increase of 2,400 was mainly the result of our acquisitions and the expansion of our organization in the BRIC countries (Brazil, Russia, India and China) and other growth markets. These factors were partly offset by decreases in headcount such as that resulting from the integration of Schering, Berlin, Germany. In Germany we had 37,400 employees, who made up 34.4% of the Group workforce.

On the reporting date we employed 53,100 people at HealthCare (2007: 51,500). Included here for the first time are 300 employees who joined the subgroup following the acquisition of Possis Medical, Inc. in the United States, 600 employees of the acquired company Topsun in the Asia/Pacific region, and the 600 employees of Sagmel in Europe. CropScience had 18,300 employees as of December 31, 2008 (2007: 17,800) and MaterialScience 15,100 (2007: 15,400). In addition, 22,100 (2007: 21,500) Bayer Group employees work for the service companies or the holding company. Personnel expenses declined in 2008 by 1.1% to €7,491 million (2007: €7,571 million).

Employee Data	Dec. 31, 2007	Dec. 31, 2008
	FTE	FTE
Employees by region
Europe	56,200	55,500
North America	16,800	17,000
Asia/Pacific	18,900	20,800
Latin America/Africa/Middle East	14,300	15,300
Employees by corporate function
Production	48,800	49,100
Marketing	36,900	38,000
Research and development	11,600	12,300
General administration	8,900	9,200
Total	106,200	108,600
of which trainees	2,700	2,900

Training costs in percent of personnel expenses	2.0	2.7
Percentage of women in Bayer Group senior management	4.3	4.7
Number of nationalities in Bayer Group senior management	16	23
The total number of employees with permanent or temporary contracts is reported in full-time equivalents, with part-time employees included in proportion to their contractual working hours. We believe this presentation improves the comparability of personnel expenses and employee numbers.

The Bayer Group’s economic success is crucially dependent on a high level of commitment by all employees. It is therefore important to enhance employee skills and performance through continuing education, global personnel development programs and a healthy work environment. Flexible worktime models enable our employees to better harmonize professional and personal interests. We have also initiated actions and projects in many countries to counter the effects of demographic change at an early stage and find tailored solutions for our company.

Our human resources policy is based on the conviction that commercial success and social responsibility are mutually dependent. That’s why we offer our employees not only diverse career challenges and development opportunities, competitive performance-based compensation and numerous additional benefits, but also a high level of social security. All of our employees worldwide either have statutory health insurance or can obtain it through the company. 80% of our workforce also has access to corporate pension insurance. The working conditions for nearly 60% of our global workforce are set forth in collective or company agreements. For many years we have safeguarded jobs in Germany through a series of agreements with the employee representatives that rule out dismissals for operational reasons. The current agreement runs until the end of 2009.

Employee participation

The participation of our employees in the company’s success has traditionally been a key element of our human resources policy. €475 million is earmarked for short-term incentive (STI) awards for 2008 that are to be paid out to our employees in 2009 under our Group-wide STI program. The Group Management Board decided last year to fundamentally reorganize the globally uniform STI system for managerial employees. The aim of the changes, which will take effect for the 2009 fiscal year, is to make the STI system even more transparent for its approximately 18,000 participants and provide greater rewards for personal performance than in the past.

In 2008 we continued the international introduction of the redesigned “BayShare” stock program launched in 2007, thus stepping up our commitment to this area of compensation policy. The program, already in force in Portugal, Spain, Italy and the Netherlands, was also introduced in Finland and Belgium, enabling employees in these countries to acquire Bayer shares at a discounted price. In addition, we offer local programs in many other countries so that employees there may acquire Bayer shares on special terms in order to benefit further from the company’s success. Since 2005 we have offered senior and middle managers throughout the Group uniform, widely acclaimed stock-based compensation programs known as Aspire I and II (see note [26.6] to the consolidated financial statements).

Vocational training and programs for young employees

The vocational training of young people is not only part of our social responsibility as a major employer, it is also a sustainable investment in the company’s future. Thus in 2008 we again continued our intensive global effort to train or recruit future specialists and managerial employees. In countries with dual training programs we offer places on such programs. At our German sites alone, more than 900 young people embarked on our vocational training programs in 2008 to prepare for a career. In Mexico more than 80 youngsters entered our dual training programs, in Argentina about 30 and in China more than 20.

In November 2008, Bayer celebrated the 20th anniversary of its program to assist and train disadvantaged youngsters, once again receiving praise for this contribution from numerous representatives of politics and industry. Last year, this groundbreaking initiative implemented at five sites in Germany prepared 149 young people with educational deficits for a formal vocational training program.

As an inventor company, we rely to a great extent on the ideas and potential of managerial staff with an academic background. In Germany, for example, this again prompted us to hire some 300 university graduates in various disciplines during 2008. The number of employees with various academic qualifications joining the company during the same period was over 1,000 in the United States, more than 800 in China, some 400 in Brazil, about 300 in Mexico and nearly 100 in Japan.

Realigning the human resources function

Since 2006 Bayer has been realigning its human resources function by way of the Group-wide “Transforming Human Resources” project. The goal is to increase the contribution of the human resources function to the success of the business and enhance the quality and efficiency of global human resources processes through an innovative operating model. We recorded major progress in this respect during 2008, with the continuing introduction of the new HR operating model in five South American countries, the United Kingdom and at five German affiliates. In January 2009, Bayer Schering Pharma AG also aligned its human resources activities to the new structures. This marks the conclusion of the project in Germany. By 2008, five central human resources processes had already been successfully implemented within the new structures and according to uniform rules and processes in more than 70 countries and over 160 Group companies.