S1-4 – Taking Action on Material Impacts on Own Workforce, and Approaches to Managing Material Risks and Pursuing Material Opportunities Related to Own Workforce, and Effectiveness of those Actions

To implement strategies for addressing topics such as “working conditions / shortage of skilled workers” and the associated material impacts and opportunities, including “financial opportunity through appeal as an employer” “promotion of employees’ professional development” and “employee (dis)satisfaction due to (lack of) co-determination,” we take the following measures. These measures are determined based on the evaluations of our employee satisfaction survey, which allows employees to provide open feedback on topics like co-determination, development opportunities and Vonovia’s overall attractiveness as an employer. During the partial survey conducted in the reporting year, employees had the opportunity to evaluate the follow-up process to the employee satisfaction survey from the prior year’s survey, particularly in the category of necessary improvement measures. The evaluation included feedback on whether employees were informed by their managers about the improvement measures derived from the prior year’s survey and whether they were given the opportunity to collaboratively define those measures. Additionally, the survey assessed the perceived implementation level and the resulting positive changes across the Group and at the team level. The survey results show that 87% of employees participated in developing improvement measures within their work environment, and 50% agreed that these measures brought positive changes to their teams.

As a measure to achieve high employee satisfaction and employer attractiveness, as well as to reduce employee turnover, we offer the majority of our workforce permanent employment contracts. Over 88% of our employees across the Group held such contracts during the reporting year. We continue to avoid outsourcing jobs abroad and limit temporary employment to exceptional cases. Additionally, only regular employment relationships exist within the Group; we do not employ seasonal workers or pseudo self-employed individuals. Through initiatives like qualitative surveys, turnover analyses and employee satisfaction surveys, we ensure that our established measures remain effective and appropriate. These efforts enhance Vonovia’s image as a secure and trustworthy employer, increasing our ability to attract and retain skilled workers long-term. As these measures are ongoing, no fixed completion date has been established.

In the reporting year, more than 85% of Vonovia employees across the Group were covered by collective agreements. Collective agreements, renegotiated regularly, ensure adequate wages and salaries while safeguarding workers’ interests. To maintain stable wages and purchasing power, we introduced a package for Vonovia employees at the start of 2023 that included an inflation compensation bonus of up to € 3,000, paid in monthly installments over 24 months, and income-dependent salary increases (ranging from 1.5% to 3.5% based on decreasing annual gross base salaries). The increase in remuneration came into force in 2023. The majority of Vonovia’s and Deutsche Wohnen’s workforce in Germany are eligible for these benefits. All of Vonovia’s and Deutsche Wohnen’s workforce in Germany, including trainees, apprentices, temporary staff and part-time workers, are eligible for these benefits. During this process, we focused on income groups that are particularly badly affected by rising prices. Initially set to expire at the end of 2024, the inflation compensation bonus will be incorporated into gross monthly salaries starting January 1, 2025. The income-dependent salary increase will also continue indefinitely.

We are particularly reliant on filling our vacancies with individuals from the available applicant pools who meet our requirements and match the relevant skill profiles. This is why our comprehensive package of measures for successful recruitment continued to focus on the further development of our application and recruitment process, our training concept, the recruitment of specialists from abroad, and the targeted further training of skilled technical workers and auxiliary staff. We are implementing these measures for current business areas in Germany. Given the ongoing shortage of skilled workers, no end date for these measures has been set. Instead, we aim to continuously develop our processes. In 2023, we launched a revamp of our employer branding strategy and our image as an employer, and conducted broad-based analyses using industry benchmarks and stakeholder interviews in order to further develop our employer brand in a targeted manner. The first set of focal topics were elaborated and corresponding target group-oriented measures developed in the reporting year. These initiatives will be operationalized in 2025, with the employer brand development continuing beyond 2025. Given the tight labor market, we aim to keep our employee turnover as low as possible. In 2024, employee turnover was 16.7%, which corresponds to a decrease of 2.5 percentage points compared to the previous year. To combat the skills shortage, while promoting workforce diversity, we recruited skilled workers from Colombia for roles in electrical installation, landscaping, photovoltaic system expansion and technical services in Germany (excluding the Care segment).

The effectiveness of the strategies and measures described in S1-1 and S1-4 to address the shortage of skilled labor is tracked in recruitment as follows:

We align our recruitment efforts to ensure that the number of new hires remains at least at the same level as the previous year. In the current reporting year, we hired 2,075 new employees for the current business areas (2023: 1,998). For 2024, one of our goals was to bring additional skilled workers from Colombia into employment at Vonovia. Currently, 65 people from Colombia (2023: 45) were employed at Vonovia sites in Hamburg, Bremen, Hanover, Braunschweig, Bielefeld, Stuttgart, Kiel, Lübeck, Dortmund and Berlin, 20 of whom were hired in the reporting year. The new employees will support, among other functions, the expansion of photovoltaic systems within Vonovia’s technical service in the future. The continuation of this program and the increase in recruitment numbers highlight the success of the cooperation project with the German Federal Employment Agency, which addresses the shortage of technical specialists at Vonovia.

We are committed to fostering a trusting and constructive exchange between management and employees in all of Vonovia’s business units through channels like works councils. Our employees are also free to form trade unions and exercise their statutory right to freedom of association. This is ensured through works agreements specific to the various Vonovia companies, guaranteeing co-determination rights and preemptively addressing potential dissatisfaction. Feedback from employees on relevant subindicators (evaluation of the ability to provide feedback to managers) in the biannual comprehensive employee satisfaction survey allows us to detect emerging dissatisfaction with co-determination and assess the adequacy of our measures. If necessary, adjustments are made based on the findings. In the current fiscal year, only a partial survey was conducted to evaluate general satisfaction with the follow-up process from the 2023 survey and with Vonovia as an employer. These measures help manage the negative impact of potential dissatisfaction due to a lack of co-determination. Simultaneously, they strengthen employee rights through extensive information and representation, fostering a sense of inclusion in decision-making.

For further details on the employee satisfaction survey, as well as the effectiveness and achievement of our related strategies and measures, refer to section S1-5 .

Regular works council meetings, open to all employees, provide updates on important regulatory matters and new developments. Ensuring freedom of association is an ongoing measure with no defined endpoint.

As a company that offers a large number of traineeships, Vonovia invested heavily in the structured development of its young employees during the reporting year. We view apprentices as future employees, who must be prepared for the demands of the future workplace. To support and create ideal training conditions, we began expanding our vocational training opportunities in Berlin in 2024 by establishing a craft academy focused on vocational training and education. Once completed, the academy will be equipped in line with state-of-the-art technical and digital standards, and is to serve as a blueprint for the opening of further training sites based on the same model. The building is scheduled for completion in 2025, after which the training program at this location will be permanently established.

The effectiveness of the strategies and measures described in S1-1 and S1-4 to address the shortage of skilled labor is tracked in training as follows:

We measure the success of our training program and Vonovia’s attractiveness as a training provider based on training numbers and the training rate. We again achieved this target, increasing the number of trainees in our current business areas from 630 in 2023 to 662 in 2024. This value corresponds to a training rate of approximately 5.6% (current business areas in Germany). 

Digitalization is playing an increasingly important role in our traineeship approach. We have implemented digital learning platforms, such as the Ulmer Learning Portal for gardener apprentices. In addition, we worked on expanding our training software and digital learning management systems for Germany (excluding the Care segment) during the reporting year. Completion of these expansions is planned for 2025. Beyond this, we will continue to optimize and standardize our training processes and plan to introduce a Young Talent Program in 2025.

To achieve high employee satisfaction and promote professional development, suggestions from the employee survey were incorporated into the immediate design of new offerings and digital learning formats as part of the Vonovia Academy’s expansion during the reporting year. The Vonovia Academy centrally organizes the entire range of training, qualification and development formats for employees in Germany (excluding the Care segment) into an online catalog. Our traineeship offerings aim to build and expand the skills and knowledge of employees, focusing on specific roles, functions and needs. In the reporting year, new learning formats in energy-related topics and additional development packages were added to the training catalog. In addition to traditional formats like e-learning, online, hybrid and in-person training, we also offer materials for on-the-job learning and peer learning. Thanks to the wide range of development measures available, our employees are able to complete targeted professional, methodological and personal training and obtain professional certifications or qualifications. This is an ongoing measure with no defined endpoint. By aligning selected initiatives with specific business areas and roles, we ensured that training offerings were tailored to needs during the reporting year. On-demand and e-learning programs, such as digital training within our leadership development program, as well as additional programs for our employees, aim to make upskilling at Vonovia an even more flexible and personalized experience in the future. For example, managers can discuss ideas and receive advice from professional coaches on specific aspects and challenges associated with change processes. During the reporting year, new training courses, curated learning content and guidelines were continually being added to the wide range of programs in Germany (excluding the Care segment) to ensure that current and future requirements are met. This is an ongoing measure with no defined endpoint. As part of our extensive development program for managers, core competencies covering all aspects of good leadership and basic knowledge on innovation topics (e.g., on integrating sustainable action into one’s own area of responsibility) are to be taught in line with the new leadership philosophy.

To support flexible working models and environments tailored to employees’ individual needs, our HR processes also support more flexible working models through remote work, made possible thanks to a works agreement, and the gradual expansion and further development of digital processes at Vonovia. These works agreements apply to administrative staff at Vonovia Holding, Customer Service, Technical Service, Residential Environment Service, BUWOG Immobilien Treuhand and BUWOG. In the current reporting year, our holding company employees once again had the option of working flexible hours between 6:30 a.m. and 10:00 p.m. The digital processes include a wide range of functionalities that are already firmly established across the Group, such as reporting absences due to illness via an app or digitally recording working hours. These tools allow employees in departments with mobile work agreements to work remotely during the reporting year. These activities enhance Vonovia’s image as a secure and trustworthy employer, increasing our ability to attract and retain skilled workers long-term. In order to further develop future collaboration in modern working environments in the reporting year, Vonovia launched the “New Work @ Vonovia” project, which focuses on the corporate headquarters in Bochum and aims to offer our employees an attractive working environment that meets their individual needs. The initiative encompasses four focal topics, some of which were rolled out during the fiscal year, setting the framework for further measures, including the structuring of various working models, state-of-the-art workplace design currently being piloted on one floor at the company headquarters in Bochum, digital tools and technologies, and training concepts for managers and employees alike. Some networking formats were implemented during the reporting year, such as the Female Leadership Forum and the Vonovia Women’s Network. Following the successful completion of the pilot measures, the initiative is set to expand to other locations. Since this is a long-term initiative, no end date has been established.

To better support work-life balance, Vonovia also offered benefits beyond monetary remuneration to employees in Germany during the reporting year. These include offers, such as Jobrad bike leasing, our company pension scheme, vacation apartments, and various partnerships with sports and fitness providers as well as advisory services and mobile working models. During the reporting year, Vonovia established a new nationwide fitness partnership, with Wellhub, for its employees in Germany (excluding the Care segment), offering extensive services. These benefits are ongoing and available to our employees on an ongoing basis, which is why there is no end date or time limit. The effectiveness of these measures is ensured through the employee satisfaction survey, which allows employees to provide feedback and suggest improvements. A subindicator from the full survey conducted the previous year assessed employees’ perspectives on the compatibility of work and family life and will be surveyed again in 2025. In 2023, approval for this sub-indicator was at 81%. 

To implement strategies regarding “equal treatment” and the associated material impact of “promotion of diversity in the workforce,” Vonovia undertakes the following measures. These measures are determined based on our goal of increasing the proportion of women in management positions at the first and second levels below the Management Board to 30% by 2026, as well as from suggestions received through our employee satisfaction survey. This includes open feedback opportunities and improvement suggestions in the comprehensive survey’s questionnaire. Additional measures are identified and evaluated with the involvement of external experts, and they are implemented following thorough assessment. If an increased number of discrimination cases are reported through our complaint channels, this also prompts adjustments to our measures.

As part of its commitment to a discrimination-free working environment, Vonovia has implemented a comprehensive complaint management system, which was operational across the Group during the reporting year (see section S1-3). For example, affected employees can report incidents of discrimination through the whistleblowing hotline – a web-based reporting system – or to an appointed ombudsperson. The ombudsperson is selected and appointed by the Compliance Committee.

In Austria, a works agreement addressing discrimination, sexual harassment and bullying in the workplace has been in effect at BUWOG since spring 2024. This agreement defines discrimination and harassment in the workplace and establishes mechanisms for reporting and addressing incidents to prevent and respond to incidents of discrimination effectively. Since measures to prevent discrimination are part of a continuous process and are regularly adapted to current circumstances, no specific timeline for completion exists.

For further details, as well as the effectiveness and achievement of our strategies and measures described in S1-1 and S1-4, see section S1-3 and G1-3.

We are continuously implementing further measures in this context – without a fixed completion date – and adapting our actions to changing conditions. Vonovia regularly updates its training programs for discrimination-free behavior and continues to promote flexible working hours to enable life-stage-oriented scheduling for employees. Since 2023, employees in Germany (excluding the Care segment) have had access to free e-learning on “Recognizing and reducing biases and stereotypes.” This training remains available without a set end date. In order to more firmly anchor the issue of diversity at the strategic level of the company, Vonovia offers a voluntary leadership development program focused on topics like unconscious bias. Simultaneously, diversity has been established as a key criterion in the leadership roadmap.

We believe that increasing equality of opportunity in the company is particularly important. In Austria, we were awarded the equalitA certification for the internal promotion of equality of opportunity in 2021 and it remains valid in this reporting year. In Germany (excluding the Care segment), three new programs were launched to promote equality of opportunity: the Women’s Network, the Female Leadership Forum and a mentoring program for high-potential female employees. The Women’s Network attracted 193 participants in the reporting year, while 135 women joined the Female Leadership Forum’s distribution list. The mentoring program is still in the initiation phase, so participant data is not yet available. As three formats were introduced in the reporting year, comparable figures from the previous year are unavailable. Since measures to promote women are part of a continuous process and are regularly adapted to current circumstances, no specific timeline for completion exists.

The effectiveness of the strategies and measures described in S1-1 and S1-4 to address the shortage of skilled labor is tracked in diversity as follows:

The effectiveness of our strategies and measures to promote diversity is monitored using the SPI sub-indicator “Proportion of women in management positions”. For further details, refer to section S1-5. Additionally, the regular collection of data on gender pay gaps (see S1-16) provides overarching insights into the success of our measures to harmonize remuneration models.

In addition, the gradual harmonization of social benefits aims to ensure corresponding equal rights for all employees in their respective countries of employment. For example, our employee share program is also in place in Austria. Following the introduction of a new, standardized retirement pension scheme in 2021, this offer was also available to most Vonovia employees in Germany during the reporting year (excluding the Care segment). This excludes executive employees and other employees who have been with the company less than six months. Work-life balance is a particularly important focus for Vonovia, which is why all leadership roles are advertised with part-time options. BUWOG in Austria also provides various offerings to support employees in balancing family and work responsibilities. For example, BUWOG made caring for family a priority in the reporting year, offering employees in Austria information through events and the “Because We Care” app. Since the app has no usage restrictions, this measure will continue into the coming year. In 2023, BUWOG also successfully achieved recertification as a family-friendly company by the Austrian Federal Ministry for Labor, Family and Youth. This recertification, valid for three years, remains in effect in 2024 and will continue until the next recertification in the 2026 fiscal year.

Overall, we consider our current measures adequate for reducing our significant negative impacts and contributing to our material positive impacts. Negative impacts from our measures would be reflected in our employee satisfaction survey or through our grievance mechanisms. Based on the results and feedback from these measures (see sections S1-3, S1-4 and G1-3 for more information), no such negative impacts have been identified. Our regular, Group-wide review of impacts, opportunities and risks related to our workforce and other material business activities within our value chain ensures early identification of potential future negative impacts and appropriate responses (for more details, see ESRS 2 SBM-2 and SBM-3).

Negative impacts from the transition to a more environmentally friendly, greenhouse gas-neutral economy on our workforce could arise if the shortage of skilled labor leads to employee overload due to increased workloads. Other potential impacts include the transformation of specific business areas due to new climate protection regulations, such as German federal funding for efficient buildings (BEG), or emerging market technologies that affect our business processes. This could result in an increased need for recruitment, training and education to implement, manage and further develop new technologies in our core business. The business-related necessity for energy-efficient renovations and new construction to reduce greenhouse gas emissions creates a high demand for skilled workers in both technical and administrative fields. We mitigate these impacts by providing further training for employees in these areas, encouraging long-term retention at Vonovia and recruiting new skilled workers. Our efforts to position ourselves as an attractive employer help us retain and attract talent. At the same time, these industry-specific factors could negatively impact employment in certain business areas (e.g., modernization and development) at Vonovia.

Managing these material impacts involves the CHRO and the Head of HR at the highest level. With regard to the management of identified impacts, we have implemented structural measures in the HR department. The topics of remuneration and equal opportunities are specifically addressed and systematically pursued by the relevant organizational units within the department.