Support the company in adapting to its surrounding dynamic context

Participate in Company 5 year plan (done in 2005)
Complete implementation of restructuring plan
Formalize Social policy
Review and align social procedures with Principles for Sustainable Excellence

 

Total headcount evolution l LA1 l ST12 l

 

Headcount evolution by region l LA1 l ST12 l
Region	2004	2005	2006
Europe	22,593	22,405	22,527
Americas	3,180	3,120	3,277
Mediterranean	7,224	6,906	7,336
Asia-Pacific	16,532	17,602	18,596
Total	49,529	50,033	51,736

 

Hires by job type l LA1 l
	2004	2005	2006
Engineers and managers	2,593	1,605	2,312
Technicians and administrators	1,167	749	1,154
Operators	4,446	3,189	4,088
Total	8,206	5,543	7,554

 

Average career length and turnover rate l LA2 l STS6 l
	2004	2005	2006
STS6 Average career length (years)*	12	15	13
LA2 Average turnover rate (%)	6.6	7.8	8.79
(*) Career length is the average length of employment of people leaving ST. Thus the calculation of the career length is based on the average turnover of the last 3-5 years.

Accompanying company strategy

The HR community has been involved in the development of the Company Five Year Plan from the earliest stages. The objective: to provide support for the organizations and anticipate strategies for HR and business in parallel. On the basis of this strategic planning HR will be able to act proactively and therefore more effectively in providing all the organizations concerned with appropriately timed solutions related to internal and external competences.

Starting from the business plans, HR has put together a synthesis of the challenges described by the organizations and consolidated the major development trends by organization and by region as well as at overall company level.

The major focus areas and priorities for action are evident from the challenges – technology transition, the necessary development of management competences, remuneration, competitiveness, etc.

The current and future HR infrastructures will guarantee deployment effectiveness as far as systems processes and centers of expertise are concerned.

There are four keynote programs aimed at offering close support for the strategic business programs and to ensure efficiency and flexibility of our organizations:

• The necessary transformation of organizations and the management of transitions, notably those brought about by technology discontinuities and the complexity of our market
• Developing expertise and leadership, focusing on an improved ability to identify and develop skills through greater competence and stronger involvement of managers
• A competitive remuneration strategy, focused on recognizing the value of individual performance
• Planning for and making available the key competences necessary to achieve our business objectives. This will be done through internal mobility, functional or geographic, by recruitment programs taking advantage of new channels like Campus Management, a more exact means of targeting expert profiles, and overall by bringing new blood into our teams, including management positions.

Employees by region and turnover

The overall company headcount has increased in 2006, especially in Asia which now represents 36% of the total ST population. The other regions are globally flat, with a slight increase in Europe and Middle- East / Africa.

More than 60% of our recruitments are centered in Asia (especially China) to support the ever-growing business needs and the aggressive business expansion plan. We maintain the recruitment activity in Europe, in particular for our skilled workforce which represents 31% of our professional hires.

Turnover remains rather high in developing countries, especially in China. Our objective, in most of the countries we operate in, is to maintain our overall turnover at the same level, while in India and China we aim to reduce it.

Disclosure on management approach

96% of our employees are covered by the performance indicators disclosed in this report. We took into account all our locations - manufacturing and non-manufacturing - at worldwide level to collect the 2006 results.

Social Policy

In 2006, we introduced a new Social Policy covering Human Rights, employee empowerment, engagement and continuous learning, responsible restructuring and other related subjects. For more details on this policy, see page 26.

The creation of a new Social Policy has opened the way for a deeper review of social procedures and the alignment of them with our new code of conduct, the Principles for Sustainable Excellence. This review will be carried out in detail by our regions and sites in 2007, with the support of our corporate Human Resources and Corporate Responsibility departments.