Sonova ESG Report 2022/23
Advancing our people
ADVANCING OUR PEOPLE
Our employees are vital to the success of Sonova: our people create innovative solutions, care for our consumers, and drive our business forward. We aim to build a secure foundation for our employeesʼ wellbeing and enable our people to develop personally and professionally. The sections that follow describe the various aspects of the ‘Advancing our people’ pillar:
As of the end of the 2022/23 financial year, Sonova had 17,608 employees (FTE), 5.2% more than in the previous year. During this year, 682 employees joined Sonova through the acquisition of HYSOUND in China; several smaller businesses were also acquired in EMEA, United States, Americas and Asia/Pacific. All of these businesses produce or distribute and service hearing instruments.
Employees by region
✔ Data externally assured (limited assurance)
Employees by gender
✔ Data externally assured (limited assurance)
Of the total workforce, 83.3% of the total workforce is employed directly by Sonova Group companies; the remaining 16.8% comprises of external temporary workers contracted as external consultants, via service agreements or staff leasing. The main functions with non-employee workers are IT (31% out of all external temporary), sales (26%), marketing (13%), and finance (10%).
Employees by employment contract
✔ Data externally assured (limited assurance)
Sonova has put in place a comprehensive set of global human resource processes, standards, and policies, which are implemented locally in line with country-specific regulations and customs. The majority of our employees are directly supported by a local human resources manager. We assess the impact of our activities on a monthly basis through a set of key performance indicators such as employee turnover rate, internal leadership recruitment rate, and the availability of internal talent for potential succession to management positions. Sonova conducts regular internal audits at Group level and Group company level to ensure compliance with internal regulations and local labor law, to monitor progress in all our locations, and to monitor that we provide excellent working conditions. As of 2022/23, 26% of Sonovaʼs global workforce is represented by an independent trade union or covered by collective bargaining agreements.
Various global challenges in recent years – macroeconomic instability, geopolitical conflicts, market volatility, and cost of living increases – have had a significant impact on our employees and potential talents. In the past financial year, rising costs for basic necessities have increased financial constraints on individuals and families. Sonova has introduced various measures in 2022/23, both on a global and local level, to ease financial pressure on our employees. One global measure was implemented during the yearly salary review: Sonova set a higher compensation increase rate for employees below senior and middle management, a definition that covers more than 90% of our employees. This helps our employees with lower incomes, who are most impacted by cost of living increases caused by price inflation.
Employee engagement
Maintaining employee engagement and inviting suggestions for possible improvement are vital activities for our continued success. Disengagement among employees presents a real business risk; by soliciting feedback from our global workforce, we can take timely and effective measures to mitigate problems, thus helping to create a better working environment with a focus on our employeesʼ productivity and wellbeing.
HearMe, Sonovaʼs annual confidential employee engagement survey, was conducted for the fifth time, and included feedback from our new colleagues at Alpaca and our Consumer Hearing business. The survey is managed in cooperation with an external provider and consists of 63 questions covering 13 topics, such as strategy and leadership, operational excellence, collaboration, diversity and inclusion, and sustainable engagement. With more than 17,000 eligible1 employees invited to the latest survey, a participation rate of 93% was reached.
Sonova calculates the sustainable engagement rate based on nine questions that ask employees to assess how much they are engaged, enabled, and energized to achieve their goals. Typically, an engagement rate above 70% is considered to represent an engaged workforce. This yearʼs survey revealed that 82% of Sonova respondents reported feeling actively engaged by their work, a decrease of one percentage point compared to previous year. Sonovaʼs engagement rate was, however, two percentage points higher than the medical devices industry average of 80% (based on the benchmark data prepared by our external survey provider).
Employee engagement target:
We achieve the employee engagement rate level of high performing companies by 2022/23.
The definition of this benchmark was provided by our external partner: it consists of companies across various industries worldwide that combine excellent return on capital employed (ROCE) with top-tier ranking in independent employee engagement surveys over several years. In 2022/23, the engagement rate for these benchmark high performing companies was 88%, while Sonovaʼs was 82%. However, in two of the topics of the survey, diversity and inclusion and talent development, improvements in our score in recent years helped us reach the level of high performing companies for those topics. Despite not having achieved our very ambitious target, we are proud to have maintained employee engagement at a high level over the past five years, and aim to continue our improvement in this area.
Each year, Sonova conduct workshops with teams around the world to analyze and discuss the HearMe survey results, agree necessary actions, implement them, and monitor their success. Concrete initiatives inspired by this yearʼs HearMe results have already been implemented, aiming to release untapped potential, identify key drivers of employee engagement, encourage effective leadership at all levels, and thereby stimulate professional growth and business success. Two further key topics of global focus, recognition and employee wellbeing, have also been established, with designated members of the Management Board assigned as sponsors for each.
Participation rate
✔ Data externally assured (limited assurance)
Employee engagement
✔ Data externally assured (limited assurance)
Since 2021 we have conducted a monthly Pulse survey, in addition to the yearly HearMe survey, to assess employeesʼ perception continuously. The Pulse survey consists of 13 questions covering a range of global focus topics and actions, and is sent to a regularly-changed sample group of employees worldwide. The feedback is analyzed monthly to identify development areas and the results are combined into quarterly reports that are shared across the organization.
Talent development
The limited availability of specialist talent in Sonovaʼs industry is a continuing challenge: we therefore follow a proactive strategy to attract, develop, and retain that talent, adapting swiftly as employment markets shift. We aim to be an employer of choice and regularly gather feedback from employees and job candidates to refine our overall employment propositions. We are committed to offering an environment where employees can develop, and encourage internal succession to keep exceptional talent within the Group – thus sustaining our competitive advantage and long-term success.
Development plan target:
Over 95% of employees should have a development plan by the end of the 2022/23 financial year.
This target applies to all employees except external temporary workers, interns, and employees in production/assembly roles, for whom other skill-related growth paths are established. In addition, employees on long-term leave (such as maternity or sick leave) are excluded. We achieved our target in 2022/23: 97.4% of our employees had a development plan.
Development objectives
✔ Data externally assured (limited assurance)2
Sonovaʼs annual performance appraisal process includes setting individual, measurable goals and conducting appraisal meetings to discuss progress towards those goals. Line and HR managers annually review the competencies, performance, and potential of our employees. The results support our global succession planning process, whereby we reduce the risk of losing specialist knowledge, skills, and experience in vital positions by identifying and developing promising candidates for internal succession. This process also enables our employees to take on new career opportunities – in a new role or a new location – within the company. During 2022/23, 66% of job openings for all leadership positions (people and project managers) were filled by existing Sonova employees.
As part of HearMe, our annual employee engagement survey, we calculated and benchmarked Sonovaʼs talent development score. The talent development topic covers three questions focusing on development opportunities and development processes. During the past few years, we have improved our score for the topic of talent development continuously. As of 2022/23, our external survey provider rated Sonovaʼs talent development score best-in-class among top performing companies.
Internal leadership recruitment rate (ILRR)
✔ Data externally assured (limited assurance)
New hire rate
✔ Data externally assured (limited assurance)
In the 2022/23 financial year, the overall employee turnover rate decreased from 17.4% to 14.7%, and the voluntary employee turnover rate from 13.1% to 11.3%. During the last financial year, efforts to retain talent included our wellbeing framework implementation, focus on diversity and inclusion and employee development. It is these initiatives that we believe are the reasons for the decrease in turnover. We still aim to improve the employee experience even further so that we can continue to retain our top talent. Comparing our total and voluntary employee turnover rates with our most recent benchmark data from an external provider covering over 50 medical devices industry peers, Sonova is ranked better than the median. The average tenure of our people managers in 2022/23 was 9.6 years, while the average workforce tenure was 7.1 years.
Employee turnover rates
✔ Data externally assured (limited assurance)
Voluntary employee turnover
✔ Data externally assured (limited assurance)
Tenure
✔ Data externally assured (limited assurance)
Leadership development programs
Sonova offers a wide range of leadership development and training programs, which use feedback, coaching, and experiential learning to give participants an opportunity to reflect on their personal style, to understand and to increase the impact they have on their performance, and to plan how they will continue to develop as leaders at Sonova. In the 2022/23 financial year, 1,500 employees received a total of 15,607 hours of leadership development training.
Learning and development programs
SonovaLearning is our group-wide learning and development platform for all employees with access to a personal work-related computer. Mandatory training courses are available on the platform which ensures that our employees have what they need to do their work correctly and in compliance with relevant rules and regulations. In 2022/23, 151,817 trainings were completed. In addition, SonovaLearning grants access to Mindtools. This app offers content that supports our employees to enhance their personal and professional competencies. In 2022/23, more than 2,600 employees accessed over 20,000 pages and articles.
Sonova offers various onsite and online training for hearing care professionals, such as the Sonova Academy in Germany, the SIHA program and other local trainings to further develop their skills in delivering best-in-class service and customer experience.
Traineeship programs
Sonova collaborates with various leading universities around the world, where students can participate in joint studies. We also offer opportunities to work as a member of one of our own research and development teams, either in an internship, or as a part of Bachelorʼs, Masterʼs, or PhD thesis work.
Apprenticeship program in Stäfa, Switzerland
Sonova supports and invests in Switzerlandʼs dual training system, which links formal education with in-company training, providing both theory and practical experience. During 2022/23, we trained 45 apprentices at our headquarters. They represented twelve professions, from polytechnician through logistics clerk to cook. We also rolled out a new one-week induction training program for new apprentices, covering such topics as accident prevention, occupational health and safety, first aid, and IT. Sonova supports education and training for young people with disabilities: in recent years, several apprentices with disabilities have successfully completed their apprenticeships with us.
Diversity and inclusion
Strategy, governance and relevance
Sonova fosters a work culture that reflects the principles of diversity and inclusion (D&I) and represents the full spectrum of stakeholders and communities that we engage with, in terms of language, background, ethnic origin, disability, beliefs, gender identity, and sexual orientation. Sonova is committed to providing equal and equitable opportunities in its hiring, development, and advancement policies. We are convinced that building a more diverse organization improves our employee engagement, our performance and productivity, as well as our customer engagement. We strive to create an environment in which all employees feel safe, valued, included, and empowered to do their best work and realize their full potential.
Sonovaʼs global D&I strategy is built around six pillars:
- Governance: We have a global D&I Council, chaired by Sonovaʼs CEO with representatives from the main regions in which we operate and from key diversity dimensions. The Council sets targets, establishes accountability for target achievements, ensures that the necessary resources are in place, and regularly monitors progress. We have a global Senior Manager Diversity and Inclusion, several regional D&I councils as well as employee resource groups.
- Targets: We set D&I objectives and measure our progress toward achieving them, while ensuring their alignment with other strategic business objectives. We monitor the composition of our workforce, where appropriate and legally permitted, along various diversity dimensions such as age, gender, nationality, or ethnic origin.
- Hiring and development: We stand for equity, equal opportunity, diversity, and inclusion in the workplace – in all our operations. We foster an environment that attracts and retains the best talent, mitigates biases, and encourages the contribution of diverse ideas, backgrounds, and perspectives to build the best team. We create opportunities for training, development, and progression.
- Training: We train our employees and leaders on general topics in diversity, inclusion, and bias mitigation. We also train colleagues on how to embrace diversity and contribute to an inclusive Sonova culture in their specific functional roles.
- Communication: We drive active and transparent communication about D&I to foster an inclusive culture, encourage role model behavior, and emphasize the high relevance of diverse and inclusive teams as a core element of our values and business strategy.
- Supportive environment: We strive to make our physical, technical, and cultural work environment inclusive and equitable, and give everyone who works with Sonova a sense of belonging.
Sonovaʼs D&I actions at Group level are governed by the Global D&I Council, which meets once each quarter; it is chaired by CEO Arnd Kaldowski and includes council members from each region (EMEA, Asia, Oceania, and Americas). Regional D&I councils established in 2020/21 tailor their actions to local circumstances, including region-specific training and celebration of certain culturally relevant days. National councils have also been established, which bring a local focus to global D&I initiatives.
Policies, targets and actions
Sonovaʼs commitment to D&I is based on our global Code of Conduct, which requires zero tolerance of discrimination and harassment.
The principal D&I target that Sonova has set is in the area of gender diversity: to achieve a 40% proportion of women in key positions (defined as leadership positions identified as business-critical) by 2025/26. At the end of the 2022/23 financial year, 34.5% of these positions were held by women; in 2021/22, the figure was 35.2%. After good progress in the previous years, one of the main headwinds this year was largely due to a challenging talent hiring market. There is currently strong competition to attract and retain the best talent, which is essential for us in building the best teams.
In 2022/23, Sonova implemented a new Group-wide job level hierarchy to enable easier global data collection and improve comparability between locations. We have therefore decided to replace the current target for women in key positions with two targets that are based on the newly defined job levels: women in senior management and women in middle management. This will help us to ensure we are making progress equitably across the organization. At the end of 2022/23, the total senior management population was around 200 people and the total middle management population around 1,400. The new targets are:
Diversity and inclusion targets:
We want to achieve a 35% proportion of women in senior management by 2028/29.
We want to achieve a 50% proportion of women in middle management by 2028/29.
In the 2022/23 financial year, the share of women in senior management was 22.0%, and was 36.4% in middle management. For comparison, the proportion of women among people leaders – those who manage a team of at least one person – was 54.4% across all our businesses. In recruitment for all leadership positions (people managers and project managers) during 2022/23, 65.3% of successful candidates were women. These broader measures suggest good conditions to reach our gender diversity targets through professional succession planning, individual development plans, and gender-balanced representation in filling open positions.
On the Sonova Board of Directors, three of the ten members are women (30%); as are two of the eight members (25%) of the Sonova Group Management Board. Jinlong Wang, non-executive member of the Board of Directors will not stand for re-election at the Annual General Shareholderʼs Meeting (AGM) in June 2023. Thus the total number of Board members will be reduced from ten to nine. The changes in Board membership proposed for the AGM Meeting would result in a proportion of 33% women (three out of nine members) on the Board of Directors, while the appointment of Katya Kruglova as GVP Human Resources & Communications in May 2023 raises the share of women on the Management Board to 37.5% (three out of eight members).
We conduct regular D&I training programs across our organization, including specific regions, worksites, departments, and job functions. Training on unconscious bias is an integral part of our onboarding program for new employees, and of training for all people managers. Senior leader training includes D&I topics along with our Code of Conduct.
Employee resource groups provide platforms where employees can connect and learn from one another, including a global womenʼs network and the global OutLoud network, which brings together employees from the LGBTQ+ community. A global Hearing Loss Network supports the message that hearing loss should definitely not stop anyone from thriving at Sonova, and provides input for making our processes and workspaces more inclusive. These networks held more than ten events in 2022/23 where diversity was celebrated, including International Womenʼs Day, Pride month, World Hearing Day, and International Sign Language Day.
Sonova promotes a range of work-life balance models such as working from home, flexible hours, and part-time work. It provides breastfeeding rooms at facilities in the larger Group companies for female employees returning from maternity leave, a discounted day care center at our headquarters in Stäfa, Switzerland, and extended maternity and paternity leave (in Switzerland, for example, Sonova offers maternity leave of 16 instead of 14 legally-mandated weeks and paternity leave of four instead of two weeks).
Inclusive meeting culture and enabled meeting rooms
Our goal is to have equal access to meetings, where everyone can contribute to the conversation. In larger meeting rooms in Switzerland, we have installed our Roger devices. These devices connect directly to hearing aids and allow for more clarity of sound. In addition, Sonova has internally and externally communicated tips on how to make meetings more inclusive for employees with hearing loss, such as having a clear meeting agenda prepared, clear audio and video technology, using recording and transcription, lighting considerations to enable better visuals, and using live participation functionalities.
Sonova is committed to equal pay for our employees, regardless of gender, ethnicity, disabilities or other factors. We are compliant with all local requirements regarding equal pay, and we review pay equality in job evaluations and grading processes to ensure fair compensation. We evaluate relative compensation between women and men, and take corrective action if needed. In Switzerland, an externally verified equal pay analysis resulted in Sonova receiving the Fair-ON-Pay certification. In United Kingdom, we published the legally required gender pay gap report for our local companies.
As part of HearMe, our annual employee engagement survey, we calculated and benchmarked Sonovaʼs D&I index. This index is based on eight questions that focus, among other topics, on whether people feel the company supports diversity in the workplace, whether they feel it is safe to speak up, or whether they feel that they can be themselves in the organization without worrying about how they will be accepted. During the past three years, we have improved our D&I index from 80% in 2020/21 to 84% in 2022/23. Compared to the medical devices industry, we score 4% points higher than our peers. Our external survey provider rates Sonovaʼs D&I index as best-in-class among top performing companies across all industries. In the survey, employees also have the opportunity to voluntarily self-identify as belonging to a minority group within their team or organization – in terms of age, gender, language, ethnic origin, religion, sexual orientation, health status, or any other dimension. Employees firstly agree that they want to see the self-identification questions. Once they agree, they can choose from three answer options: yes, no, prefer not to say, or decide to skip the question. Out of all employees who chose to answer the question, 24% of employees self-identified as belonging to a minority group, representing 20% of all survey respondents. This is an indication that minority groups feel safe to self-identify at Sonova, and enables us to receive diverse feedback, to create an even more inclusive environment.
Performance measurements
D&I in HearMe
✔ Data externally assured (limited assurance)
Women in management positions
✔ Data externally assured (limited assurance)
Women in positions with staff responsibilities and in key positions
✔ Data externally assured (limited assurance)
Leadership recruitment rate (LRR) for women
✔ Data externally assured (limited assurance)
Women in STEM positions and revenue generating functions
✔ Data externally assured (limited assurance)
Women in STEM positions and revenue generating functions and as people managers
Number of nationalities of all employees
✔ Data externally assured (limited assurance)
Employees by nationality (top 5)
✔ Data externally assured (limited assurance)
People managers by nationality (top 5)
✔ Data externally assured (limited assurance)
Employees by age
✔ Data externally assured (limited assurance)
Occupational health and safety
Sonova fosters an occupational health and safety culture that supports and protects our employees. We lay a foundation of safe behavior and provide the right tools to limit the risks of accidents and injuries at our workplace. We regularly monitor and analyze the potential health and safety risks of our operations and implement both legally required and voluntary occupational health and safety programs. Safety is the topic of daily meetings at our operation sites. Sonovaʼs production has a relatively low exposure to health and safety risk. Most injuries and lost work days are not caused by the manufacturing processes; they are more likely to be sustained during activities such as movement of goods. Employees who work with chemicals and hazardous substances, or come into contact with them, are regularly trained in their safe handling.
We have included both our newly-acquired Consumer Hearing business and our Cochlear Implants business in our health and safety measurements for the 2022/23 financial year. We recorded a lost day rate (LDR) of 63.8 and lost-time injury frequency rate (LTIFR) of 3.7. The LDR increased by 26% compared to 2021/22, partially from the increased number of operation sites, but more importantly because of an increase in days lost after injuries. The LTIFR increased slightly compared to the previous year. The absolute number of injuries at Sonova is generally low, and small changes have a significant impact on the key performance indicators. For example, in the 2022/23 data, two accidents were responsible for 44% of the total lost days. We investigate the root causes of each work-related injury, perform regular local internal health and safety audits, and implement action plans, such as intensified local training and awareness-raising activities to further reduce exposure to work-related health and safety risks. We carry out regular safety walks at our operation sites to help prevent accidents. We also discuss KPIs such as accidents and observed safety infractions during daily meetings at the operation sites.
Occupational health and safety
✔ Data externally assured (limited assurance)
The LDR, LTIFR, OIFR and work-related fatality figures reported in the table above cover around 20% of our global workforce, focused on employees in manufacturing, and operation and distribution roles. The measurements cover all of our manufacturing sites in Switzerland, Vietnam, China, Ireland, and the United States, our operation and distribution center in the United States, and our service centers in Spain and the United Kingdom. In each of these sites, a designated person is responsible for local implementation of the health and safety program. Any incident that requires external medical health care is considered a work-related injury: first-aid level injuries are not included. Any work-related injury that results in the company employee not being able to return to work the next scheduled workday/shift is considered a lost-time injury. Lost days refer to working days, not calendar days, and begin right after the accident.
Employee wellbeing
Sonova is committed to foster employee health and wellbeing, at work and beyond. People spend more active time at work than anywhere else: their wellbeing is therefore heavily influenced by conditions and culture in the workplace. By implementing a holistic wellbeing program, Sonova can realize significant benefits: increased productivity, more innovation, higher employee engagement, and attract talent – because its employees can enjoy a beneficial work environment.
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- Physical: nutrition, exercise, sleep, medical care, ergonomics
- Mental: relaxation, mindfulness, stress management, resilience, mental health
- Financial: financial security, retirement, ancillary benefits
- Social: healthy relationships, team spirit, leadership
- Purpose: purpose in life and work, beliefs & values, charitable activities.
Employee wellbeing at Sonova is led by a Corporate Health Manager and is managed through a cross-functional global health team, supported by local wellbeing champions in our Group companies. These are responsible for implementing global initiatives, complemented by local programs, which cover the five dimensions of our wellbeing strategy.
Wellbeing target:
We aim to implement an enhanced global employee health & wellbeing program by 2022/23.
We achieved the target in 2022/23 with the implemented measures in the financial year across our Group companies. As a next step, we aim to train more than 1,000 line managers on “Mental Health First Aid Conversations for Managers” by 2024/25.
Sonova launched a global hybrid working policy in 2021/22, which gives office-based employees the option to work part of their time from home. This allows people to balance their work tasks efficiently with their other life commitments: by the end of 2022/23, more than 98% of Group companies with employees eligible for hybrid work had implemented the policy. There has also been an increase in the number of Group companies offering our Employee Assistance Program (EAP), and in overall program usage. EAP offers anonymous counseling services for employees and immediate family members with personal concerns – whether at work or at home – that effect their wellbeing. Two further global wellbeing measures launched the previous year, were continued in 2022/23: shortening standard meeting duration to avoid back-to-back scheduling and provide regular recovery breaks; and a weekly global four-hour focus time to work with no meetings and no interruptions. Surveys confirmed that both measures were highly appreciated by employees across all job levels.
New wellbeing measures introduced in 2022/23 focus on mental health, increasing awareness through global online events and regular communication on the Sonova intranet, along with events specifically for team leaders featuring external experts. A new leadership training program, “Mental Health First Aid Conversations for Managers,” teaches leaders how to recognize early signs of mental challenges and address them in conversation. About 200 leaders completed the training during this financial year.
In the coming financial year, we plan to further expand the number of leaders trained in mental health first aid, continuously raise awareness on wellbeing, and implement further local wellbeing measures in our Group companies across all five dimensions of the wellbeing framework.
Responsible reorganizations
At Sonova, we are committed to treating our workforce responsibly. In the event of major reorganizations, such as restructuring, relocation, outsourcing, or mergers and acquisitions, we strive to reduce negative impact on our employees by ensuring job security, minimizing compulsory redundancies, and mitigating the consequences for those made redundant. In such cases, a local implementation plan is developed to minimize negative impact, containing a variety of measures that can be adapted to the local situation and needs of the individual employees. At our headquarters in Stäfa, Switzerland, for example, the applicable measures include early retirements, internal mobility, financial compensation, re-training or outplacement services, case management, extended notice periods, and hardship funds.
In the past three financial years, there were no significant job cuts at Sonova – that is, none affecting more than 1,000 employees or more than 5% of the total global workforce annually.
