Progress of objectives 2017
Progress of objectives 2016
Progress of objectives 2015
We are the best employer in the trading sector in terms of job satisfaction.
According to our personnel survey, 79% of K Group employees would recommend the group as an employer. In the Universum Professionals survey, Kesko's ranking was 25.
We continued to employ young people by offering summer jobs to approximately 5,000. As part of the Finland's Mentors project, we carried out a K Trainee Programme.
We surveyed views and opinions from current and potential employees, as well as expectations towards K Group as an employer and general expectations of working life. Based on the findings, we redefined our plans for improving employee experience and our recruitment process. We initiated pilots to increase agility in our work practices. We adopted a common operating practice for mapping out employees’ career aspirations, skills and competencies and willingness to evolve and take on more challenging positions within the company.
We know the targets set for our work and receive feedback on our performance.
We introduced a new performance management model and K SuccessFactors, a system supporting the model, for support functions in Finland, Sweden, Norway and Russia. The model comprises target setting linked to strategy and follow up, personal development reviews and development plan, and performance evaluation tied to performance bonus. We will use the model to systematically guide the performance of employees and the organisation to implement our strategy, reward good performance, develop employee competencies, support target achievement, and prepare for future challenges.
Wellbeing at work and occupational ability
We improve work motivation and satisfaction.
The key focus area was to develop our Occupational Health and Safety (OHS) operations through management by information supporting business. We systematically monitored key OHS indicators and developed different areas from a business perspective. We launched international OHS and wellbeing principles in K Group.
We improved stress management skills among personnel through mindfulness training. We continued health training and introduced wellbeing programmes directed at managers.
We launched common occupational safety principles and operating models in Finland, and carried out pilots to improve occupational safety. We streamlined the labour protection organisation to reflect our current operating premises and organisation structure.
We reduce sick leave, accidents at work and premature retirement due to disability.
We continued to focus on decreasing sick leaves, accidents at work and premature retirement due to disability. Although the numbers for premature retirement due to disability are well under control considering the size of the company, we are paying more attention to the management of risks for occupational ability and the related costs.
Training for the Let's Talk About Work operating model is part of the occupational ability management training for managers.
We conduct an annual performance and development review with every employee.
The performance and development reviews continued and are part of the new performance management model adopted for support functions in Finland, Sweden, Norway and Russia. Read more in Performance management and 404-3.
We will regularly train our managers.
The consistent development of managerial work continued in support of our strategy. Manager training included the K Way training programme for new and experienced managers, the international K Way Middle Management Leader programme, and training related to the performance management model. A total of 727 managers took part in manager training. We will continue to systematically develop our training portfolio to meet future needs. In 2018, we will update our manager training and expand the concept to Poland and Norway.
In 2017, Kesko had an average of approximately 22,077 (2016: 22,476) full-time equivalent employees in nine countries: Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Poland, Russia and Belarus. 48% of the personnel were based in Finland and 52% in the other operating countries.
|Changes in the number of Kesko employees|
|Finland at 31 Dec.||12,327||14,845||10,081|
|Other operating countries at 31 Dec.||12,656||12,811||11,854|
|Total at 31 Dec.||24,983||27,656||21,935|
|Other operating countries, average||11,386||11,762||10,655|
|Fixed-term and part-time employments at Kesko|
|Fixed-term employees of total personnel at 31 Dec., %|
|Other operating countries||4.8||6.1||6.1|
|Whole Group, total||9.4||9.2||8.6|
|Part-time employees of total personnel at 31 Dec., %|
|Other operating countries||7.8||6.7||8.1|
|Whole Group, total||24.1||26.7||22.5|
|Kesko’s personnel statistics for 2017 analysed by operating country|
|Total number of personnel at 31 Dec.||12,327||1,058||399||694||702||4,028||786||1,978||3,011|
|Average number of personnel in 2017||10,691||1,077||383||690||636||3,467||761||1,738||2,633|
|Number of new employments1|
|Number of terminated employments1|
|Terminated by employer, %||8.0||16.0||6.0||2.0||10.0||11.0||26.0||0.0||0.0|
|Total turnover rate, %2||38.0||35.0||23.0||32.0||44.0||57.0||18.0||47.0||33.0|
|1 Including summer employees|
|2 Excluding summer employees|
|When calculating the number of terminated employments, each employee is included only once, whereas one person may have several new employments included in the total number.|
Kesko Group offers benefits to its personnel in all of the countries in which it operates. In Finland, employees on permanent, fixed-term and part-time contracts are offered the following:
In all operating countries, Kesko supports its employees’ leisure activities in different ways. The Finnish companies, for example, provide benefits for physical exercise, cultural activities and work commute. Some of the companies operating in Russia, Estonia, Latvia and Lithuania also give financial support to their employees through different situations in life, such as when a child is born, during a child's first year at school, in the event of the death of a close relative and in other special situations. Employees are also provided with a diverse range of shopping benefits that apply in K Group stores and staff shops. A company phone and car are also provided if required for the job.
The performance bonus schemes cover the entire personnel, with the exception of sales assistant jobs and jobs covered by other types of bonus or commission systems. The indicators of the performance bonus scheme include, for example, the Group’s and the division’s operating profit, the sales and profit of the employee’s own unit and customer satisfaction or market share. Depending on role, personal performance bonus targets may also be set. In spring 2017, around €11.4 million (€11.5 million in 2016) was paid in Finland in bonuses under the 2016 performance bonus schemes, accounting for approximately 3.0% (3.7% in 2016) of the total payroll.
In 2017, the total remuneration paid in the form of performance bonuses, sales commissions and other corresponding monetary remuneration was as follows:
The maximum performance bonus amounts vary depending on the profit impact of the person’s role and are equivalent to 10-67% of the person’s annual salary.
Kesko operates a share-based compensation scheme for some 140 members of management and other specified key personnel. Kesko’s share-based compensation scheme comprises three share-based incentive plans, which were communicated in a stock exchange release on 2 February 2017. The Performance Share Plan (PSP) consists of individual annually commencing share plans, each with a two-year performance period and a two-year commitment period following the payment of the potential share award. The Bridge Plan is a one-off, four-year plan aimed at covering the transitional phase from Kesko's previous long-term incentive scheme to the new incentive scheme adopted in 2017, with a two-year performance period. The PSP and the Bridge Plan are complemented by a Restricted Share Pool (RSP), a plan that consists of annually commencing share plans. Each RSP includes a three-year commitment period, after which the potentially granted share awards of the individual plan will be paid to the participants in Kesko’s B shares, provided that the participant’s employment or service relationship with Kesko Group continues until the payment of the awards.
In February 2017, the Board decided to grant a total of 192,822 Company B shares to 130 members of Kesko’s management and other key personnel based on the fulfilment of the performance criteria for the 2016 performance period of the share plan.
New pensions were granted to 291 people (271 in 2016) in Kesko Group in Finland. The figure includes employees retiring on part-time pensions, partial disability pensions and rehabilitation benefits in addition to those who retired on old-age pensions and disability pensions. Rehabilitation benefit is a form of fixed-term disability pension granted with the aim that the employee is rehabilitated and returns to working life. Rehabilitation benefits were granted for the purpose of retraining or work trials to 111 people (87 in 2016) who were at a clear risk of losing their working capacity within a few years. The average retirement age of employees in 2017 was 56 (60 in 2016). Notably, the average retirement age for old-age and disability pensions was 62. In the other operating countries 29 (28 in 2016) employees retired.
Labour protection activities are arranged separately for each company, region or place of business in compliance with local legislation. Labour protection activity in Finland has been made more effective by testing regional committees and by combining worker health and safety committees in the Greater Helsinki region in preparation for the move to common operating premises. Outside the Nordic countries, labour protection matters are handled by OHS (Occupational Health and Safety) committees. Kesko's HR functions arrange occupational safety training for Kesko employees and K-retailers. Group companies also arranged training sessions tailored to their specific needs.
Within Kesko Group, the occupational health service's normal operations include providing advice and counselling related to employees’ health and wellbeing at work, analysing health risks related to work and preventing illnesses, and providing treatment – even in the event of serious illnesses – in collaboration with primary health care practitioners and specialist health care providers. In Finland, 12,600 (15,000 in 2016) Kesko Group employees were covered by Kesko’s own occupational health services. Kesko's occupational health service purchases occupational healthcare from one provider for employees in Finland outside the Greater Helsinki area. Centralised and target-oriented management enables consistent content and operating methods in occupational health service. In other countries, occupational health care is arranged in compliance with local legislation and practice.
A total of €6.2 million (€7.5 million in 2016) was spent on occupational health care in Finland in 2017. Kela (the Social Insurance Institution) reimbursed Kesko for approximately €3.5 million (€3.7 million in 2016) of this sum. In 2017, Kesko’s occupational health service spent €494 (€499 in 2016) per employee on maintaining employees’ working capacity and providing medical care.
|Kesko’s contribution to occupational health care, Finland|
|Injuries and occupational diseases in Finland|
|Occupational injuries, excl. commuting injuries||226||227||93|
|Injury rate¹ /million working hours||11||10||6|
|Average degree of injury severity, days||20.9||15.8||16.9|
|Suspected occupational diseases||2||1||4|
|Sick days due to occupational injuries, commuting injuries and occupational diseases||6,473||5,744||2,166|
|The calculation method: small injuries, i.e. those leading to absence of less than three days, are not included in the figures. Statistics do not include contractors.|
|¹ Excl. small injuries and commuting injuries, calculated with actual working hours|
|Sickness absences by country in 2017|
|Total number of sick days||132,608||11,709||4,450||6,557||6,013||35,377||9,199||19,225||42,969|
|Per million working hours||6,577||6,177||6,606||4,682||4,684||5,051||5,808||5,586||8,030|
|The calculation method: sick days per employee have been calculated on the average number of employees during the year.|
Statistics on injuries in Finland and breakdowns of sickness absences by country are presented in the tables above. In the other countries, a total of 154 injuries occurred resulting in sickness absences of more than three days in 2017. The corresponding figure in Finland was 226. In 2017, the sickness absence rate in the Group companies in Finland was 4.6% of hours worked (4.4% in 2016). Approximately 75.1% (74.7% in 2016) of sickness absences were short-term absences, i.e. paid sick days (the figure does not include the sickness absences of Onninen Oy and K-Market Oy). In the other countries, the sickness absence rate was 4.7% (4.2% in 2016).
|Training days and costs in 2017|
|Training days per employee1|
|Training costs, € million|
|Training costs per employee, €|
|1 2015: Excluding Konsoma JLLC, Belarus and OOO Kesko Real Estate, Russia 2016: excluding Kesko Foor Rus, Russia, OOO OMA Belarus, 2017: Excluding Byggmakker Handel AS and Onninen AS Norway, Onninen AB and K-Rauta AB Sweden and OOO Onninen Rus Russia|
Average hours of training per employee totalled 5.2 in Finland in 2017, and 6.3 hours in the other countries.
Systematic, business-driven development of personnel is a critical factor for future success. The transformation of the trading sector and the increase in electronic transactions have created needs for new competencies. Key areas of competence building were
Our new manager training programmes continued in 2017. The programme for middle management was carried out for the second time. The key focus area for the programme is strategic competence and management of customer experience. A tailored management training was initiated for the K-Citymarket chain, with the objective of 316 store managers obtaining specialist vocational qualifications in management. We also carried out a leadership ability assessment for 158 people in managerial and demanding specialist positions. Each participant established their own development plan based on the assessment.
Focus on digital competencies continued. We piloted trainings on LEAN and Agile development methods for management and managers, organised morning sessions for the whole personnel discussing the latest trends in digital development, and set up a digital agent network for the K-Rauta chain to support the implementation of digital services and tools at the stores.
We developed a new training portal for store staff: all training available can now be easily found in K-Academy. We developed customer service in the building and technical trade through a Rautaliiga programme for retailers and staff. For B2B sales, we developed an ABC programme for sales staff in Onninen Express.
The Master Sales Assistant customer service and sales training for all chains was organised for the 57th time. Store personnel were also offered vocational training and the opportunity to obtain vocational qualifications.
Our acquisitions were also reflected in competence building. By the end of 2017, 407 Siwas and Valintatalos had been converted into K-Markets. Each transfer entailed plenty of training for both the retailers and the staff.
Future K-food retailers are trained in our K-food retailer training. In 2017, 66 new retailers completed the K-food retailer training. As the number of K-Markets grew, there was also an increasing number of retailers who were in charge of multiple stores, and we designed and launched a specific Luotsi leadership training programme to support them. 40 retailers took part in the training during the latter part of the year. The programme will continue on 2018.
We promoted the continuous development of existing retailers' competences by offering supplementary training.
Internal job rotation opens up possibilities for various careers options. In Finland, approximately 1,992 (4,837 in 2016) internal transfers took place in 2017, while the combined figure for the other operating countries was 2,637 (2,923 in 2016) (figures excluding internal transfers within K-Market Oy).
In Finland, K Group's recruitment is supported by the K Trainee and retailer coaching programmes. The seventh K Trainee programme began in May 2017 with 12 trainees, who have obtained permanent positions via the programme.
Performance and career development reviews and performance assessment of key personnel are carried out at all Kesko Group companies and operating countries. In the performance and career development reviews, the performance of the past period is evaluated and targets are set for the upcoming period, including a discussion on the development of the employee, managerial work and the working community. The implementation of performance and career development reviews was surveyed in conjunction with the personnel survey conducted at the end of 2017. The response rate to the personnel survey was 71%. Of the respondents, 80% had discussed their objectives and development with their manager during the past year.
The objective of performance evaluation is to give feedback on performance in the previous year, support the person's development and encourage enhanced performance. Uniform evaluation criteria enable equitable evaluation of performance and competence for all employees. Systematic and effective performance reviews provide important information and form a strong basis for other HR processes.
The personnel survey is one of the key tools for developing internal operating practices and developing the quality of managerial work. The whole personnel is given the chance to take part in the survey: the Group’s common personnel survey is conducted simultaneously within the Kesko Group and some of the K-stores in Finland and other operating countries. A separate survey has been created for stores that do not take part in the Group’s common survey, covering the same issues but comprising less questions.
The survey seeks to identify the commitment of personnel to the organisation, the operating methods that enable good work performance, the implementation of our shared operating principles, the occupational wellbeing of personnel, and satisfaction with the work of immediate managers and management. The survey results are used as the basis for agreeing upon development measures, which are integrated into the annual operational and personnel plan and the implementation of which is monitored.
We made changes to our personnel survey in 2017, adopting a new system that enables result monitoring both at group level and flexibly based on unit needs. In 2017, 13,400 employees from all our operating countries took part in the personnel survey (71% of target group). Results showed positive development in all eight question categories.
Equal opportunities, justice, non-discrimination and equality are important principles that are observed at Kesko. Kesko Corporation and its subsidiaries in Finland draw up statutory company-specific HR, training, equality and non-discrimination plans and define objectives for improvement. At the beginning of 2017, Kesko established the TASY gender equality working group in accordance with the non-discrimination plan, tasked with handling matters related to non-discrimination and equality within the Group. The working group includes representatives of the employer, personnel and labour protection functions. The working group analyses recruitment, career development and training, remuneration and the reconciliation of work and family life.
Of Kesko employees in Finland, 55.5% were women and 44.5% were men. In the other operating countries, the figures were 46.7% and 53.3%, respectively. In Finland, the average age of employees was 37 in 2017. In the other countries, the average age of employees varied from 35 to 46 years.
In recent years, K Group has initiated projects to employ members of special groups:
In 2012, the K-Retailers' Association started a project named ‘Many kinds of performers’ in collaboration with the Finnish Association on Intellectual and Developmental Disabilities (FAIDD). A permanent operating model was created for employing people with developmental disabilities. Many of the people with developmental disabilities who were employed as part of the project are still working at K Group.
In 2013, Kesko and the K-Retailers’ Association launched the ‘Youth Guarantee in K Group’ programme, which aimed to provide a job, a work trial or an apprenticeship in K Group by the end of 2014 for 1,000 young people under 30, who were at high risk of social exclusion. The target group also included young immigrants and young people with disabilities. The employment of young people and special groups continues as a permanent operating model. The support for Kesko’s managers and retailers in issues related to employing young people and special groups was moved to Kesko’s centralised service centre in 2017. By the end of 2017, more than 3,800 young people from the target group had received a position in K Group with the help of a work trial, pay subsidy or apprenticeship training.
The average annual salary of Kesko employees was €40,275 in Finland, €44,385 in the other Nordic countries, and €11,680 in the Baltic countries, Russia, Poland and Belarus. As the Kesko Group operates in many lines of business, the average salary is not a good indicator of salary level or structure. The wage groups and tables specified in the collective agreement are applied to jobs covered by the agreement, such as sales assistants and warehouse workers. Salaries are also influenced by role-based responsibility bonuses, years of experience and the cost-of-living category of the locality. Besides the role and its requirements, the salary of a senior clerical employee is determined by competence, experience, performance and results. Equality in remuneration is considered as part of annual company-specific equality plans. Gender is not a factor which influences remuneration, and no significant differences between comparable jobs have been detected. Equality plans strive to promote pay equality in jobs where comparisons can be made.
|Percentage of women by employee category, Finland|
|Managers and specialists||45.2||41.9||46.4|
|Workers and white-collar employees||58.4||64.4||57.8|
|The figures also include those called to work on demand|
|Percentage of women by employee category, other countries|
|Managers and specialists||49.1||48.4||54.4|
|Workers and white-collar employees||41.6||47.2||47.8|
|2015: Excluding Senukai, Lithuania|
We want to be the most attractive workplace in the trading sector, with satisfied employees and competent managers. The K Group offers varied career and personal development opportunities in a variety of jobs in the trading sector. In restructuring situations, Kesko complies with local legislation in all of the countries.
Kesko and K-stores are responsible for providing employees with a safe working environment and appropriate training and guidance for their work.
Systematic, business-driven development of personnel is a critical factor for future success. The transformation of the trading sector and the increase in electronic transactions have created needs for new competencies.
Key areas of competence building are:
A pluralist organisation that promotes diversity guarantees equal opportunities, rights and treatment to all. Equality, justice and non-discrimination are important principles which are observed at Kesko throughout the employment relationship. The most suitable person with the most development potential is selected for the job, and applicants are judged according to their competence, skills and accomplishments.
The objective of remuneration in Kesko is to encourage employees to exceed the objectives given and to motivate them to do long-term work in order to meet the goals of the K Group. Remuneration is fair and is based on principles that are commonly known.
HR management is based on Kesko's values and operating practices and the K Code of Conduct guidelines. Kesko's HR policy defines key operating principles in the various areas of HR management. The HR strategy defines HR management objectives, critical success factors and key development initiatives.
Kesko is a member of Diversity Charter Finland. The operations of Diversity Charter Finland are based on a charter that is signed by all members.
The personnel's ability to work is protected by creating a safe and supportive working environment. The goal of labour protection is to secure and maintain employees' ability to work and to prevent and avoid occupational injuries, occupational diseases and other physical and mental health hazards arising from work or the working environment.
In the development of wellbeing at work, the objective is to increase job satisfaction and motivation, reduce sick leave, increase the retirement age and decrease premature pensions, and enhance the employer image. From 2016–2018, the wellbeing at work programme focuses on:
In 2012, the K-Retailers' Association launched a project called 'Many kinds of performers' in cooperation with the Finnish Association on Intellectual and Developmental Disabilities (FAIDD). Read more in 405-1.
The employment of young people continues as a permanent model in accordance with the ‘Youth Guarantee in K Group’ programme.