Our One Unilever approach
Our 'One Unilever' programme is already streamlining our business by creating single operating companies for each country and outsourcing parts of our information technology, human resources (HR) and finance functions. Since 2004, we have reduced our senior management headcount by around 40%.
In 2007 we announced plans to accelerate our change programme further by developing more 'multi-country organisations' (MCOs) – clusters of countries with a single centralised management. MCOs reduce duplication and free up resources to focus on customers and consumers. In Europe, for example, we consolidated our operations in Belgium and the Netherlands into one MCO and in Africa, we formed an MCO from operations in six countries.
During the year we also divested some parts of our business including our Boursin, Lawry's and Adolph's brands.
As a result of restructuring and divestments in 2007, the number of people we employed worldwide decreased by around 5 000. Europe was strongly affected with a number of factories and offices being closed, leading to a reduction of 2 200 employees. Further changes were announced for 2008.
Outsourcing
Outsourcing provides a better service to our business and allows us to concentrate on our core activities. In 2006 we signed a seven-year outsourcing contract with Accenture to handle all transaction processing and administration support services for our human resources function. We have minimised the impact of the change by transferring staff to Accenture as well as providing early retirement, retraining and exploring alternative roles and voluntary programmes. Accenture is now running core HR and recruitment services in 17 countries. Our new web-based learning management system (LMS) brought access to training to 81 000 employees in its first year.
Responsible restructuring
In implementing our restructuring programmes we seek to act with integrity and follow agreed consultation processes. We make every effort to treat those affected fairly – and help them to find alternative employment if redundancy is necessary. From employee consultation, we recognise that this level of organisational change is a source of concern. We take these concerns seriously and throughout the process we communicate regularly to ensure that people understand what is happening.
When carrying out restructuring operations, our approach is to adhere to our values, as embodied in our Corporate Purpose and Code of Business Principles and treat people with respect, integrity and fairness. We seek to act in a socially responsible manner when we close plants or dispose of businesses.
As a general principle, we aim to safeguard the interests of our employees. Disposal of a company is preferable to closure, but if closure is unavoidable, other mechanisms are used to mitigate the effects on employees. Depending on local legislation, culture and circumstances, we seek to consult on measures to manage these effects.
Changes to the business are inevitable in a competitive marketplace, so we invest in employees' life-long learning. Training and personal development focus on the continuous updating of skills each individual can use, whether inside or outside Unilever.
Recent examples of our approach:
India
In India, when we divested our tea estates business, we sold the business to three separate companies, each of whom is in the plantation/tea business. In each case, the acquisition helped them strengthen their business presence and performance. As part of the agreement with the new owners we explicitly covered the continuance of service of all these employees and the protection of their employment terms and conditions. Apart from normal attrition, no employees lost their jobs as a result of this transfer.
Romania
In March 2006, Unilever Romania announced the consolidation of three of its factories onto one site in Ploesti. Recognising that the closure of the factories in Targu Mures and Bucharest would have a significant impact on our employees and local communities, Unilever Romania was committed to treating people fairly throughout the process of change. As a result, all employees at the affected sites (127 in total) were offered jobs within our new operations at Ploesti. To compensate them for the move to a new town, they were offered a 'disturbance allowance', rent contributions for a year, a retention bonus and a commitment to career development within the new plant. Over a fifth of affected employees accepted this offer and agreed to move to Ploesti.
For those who chose not to move, Unilever Romania set up a programme, Orizont 2007 (Horizon 2007), to support them in finding new jobs. To implement Orizont 2007, we commissioned an external agency to provide training and support for employees for a period of six months. We set the agency challenging performance targets to ensure that genuine efforts were made to find new jobs for our employees. For example, each person should receive at least three attractive job offers and a total of 60% of those that sought help should be re-employed. The agency set up centres at both the affected factories, and delivered over 1 500 hours of training, including training for new skills such as crane driving and vehicle servicing. Over 90% of employees used these services, with a high success rate in finding new jobs.
South Africa
The closure of part of our Home and Personal Care (HPC) operations plant in Boksburg, South Africa meant that a large number of people were to lose their jobs. The process of change was managed carefully by working with the union and employees over a three-year period. Many employees were retrained and so were able to stay on as Unilever employees in other parts of our business. The people who did lose their jobs were placed into small businesses linked to our HPC operations, for example with a local packing business. To help with the transition, the Boksburg site provided training and financial support to these employees and businesses.
