Annual Report For the year ended 31 March 2009

Vodafone employed an average of around 79,000 people worldwide during the 2009 financial year. The Group aims to attract, develop and retain the best people by providing a stimulating and safe working environment, offering attractive performance based incentives and rewarding career opportunities.

Organisation changes

Vodafone changed the shape and size of its organisation during the 2009 financial year to accommodate growth within the business as well as to create a leaner, more agile structure with clearer reporting lines and accountabilities across the Group. Changes included:

• creation of three regions (Europe, Africa and Central Europe and Asia Pacific and Middle East), each managed by a Regional CEO;
• centralisation of teams who manage activities that benefit from the Group’s global scale, including terminal procurement, supply chain, IT and network programmes and product development;
• continued integration of new acquisitions; and
• restructuring and cost efficiency activities in some operating companies.

As a consequent of these changes, approximately 1,900 jobs were eliminated. Despite these reductions, the overall number of people working for Vodafone grew by 9%, due to growth in emerging markets and business acquisitions. People whose jobs were affected by the organisational changes were treated in line with Vodafone policy and good practice on employee relations and consultation.

People engagement

In November 2008, Vodafone carried out its fourth global people survey. The survey measured the level of engagement (a combination of pride, loyalty and motivation) of the Group’s people and 59,453 people responded to 68 individual questions covering most aspects of the employee experience, achieving an 85% response rate overall.

• Employee engagement increased by four percentage points to 75%. This is the highest it has ever been since Vodafone started surveying its people in 2003. It is particularly significant because, for the first time, Vodafone achieved the high performance benchmark for engagement. The high performance benchmark is an external measure of best in class organisations that achieve strong financial performance alongside high levels of engagement. This achievement demonstrates that, more than ever before, people at Vodafone feel proud, committed and willing to give their best.
• Certain results from this year’s survey were above the benchmark for other high performing organisations, particularly in relation to fair treatment, encouraging innovation and recognition.
• Vodafone identified three key areas of action (team working, attracting and retaining talent and managing change) from the 2007 survey. The 2008 survey showed significant improvement in each of these areas.

Targets and actions have been identified to build upon and sustain the high level of engagement achieved. The Group plans to carry out another full global survey in November 2009.

Performance management

Vodafone operates a globally consistent performance management process, which requires each individual’s performance to be reviewed with his or her manager and career development goals to be set through a performance dialogue. Excluding India, 96% of employees completed a performance review and 95% of employees agreed development goals and business objectives with their manager.

Succession planning is supported through development boards, which occur annually, covering all functions and levels within the organisation. Leadership roles and key appointments are reviewed monthly by the Executive Committee.

Training and development

Vodafone is committed to helping people reach their full potential through ongoing training and development. In the 2009 financial year, Vodafone provided an aggregate of 230,000 days of training, an average of three days per employee.

In the 2008 financial year, over 4,500 managers globally received training on Vodafone’s total communication strategy and products. In the 2009 financial year, this training programme was extended to all employees via an online interactive course that has been translated into 11 languages and rolled out to 18 countries. So far, over 8,500 people have completed the online course, and 13,701 people have attended the quarterly web sessions that support the programme.

In the 2008 calendar year, Vodafone launched Inspire, a development programme for the leaders of tomorrow. Inspire has a total of 70 delegates from across 17 countries on the programme, with a further intake planned in the 2009 calendar year. The programme is focused on developing commercial acumen and leadership capabilities through a combination of training, business challenges and international assignments.

Equal opportunities and diversity

Vodafone is committed to providing a working culture that is inclusive to all. The Group does not condone unfair treatment of any kind and offers equal opportunities for all aspects of employment and advancement regardless of race, nationality, sex, age, marital status, disability or religious or political belief. This also applies to agency workers, self employed persons or contract workers who work for Vodafone.

People with disabilities are assured of full and fair consideration for all vacancies and efforts are made to meet their special needs, particularly in relation to access and mobility. Where possible, modifications to workplaces are made to provide access and, therefore, job opportunities for the disabled. Every effort is made to continue the employment of people who become disabled via job design and the provision of additional facilities and appropriate training.

Gender diversity is a key focus area for Vodafone. 13% of the Group’s senior employees, including three operating company CEOs, are female. In 2008, Vodafone implemented a diversity and inclusion strategy to improve gender diversity across the Group. Nine work streams were established, overseen by a steering committee, to ensure the Group continues to make progress in this area.

Vodafone has started to rollout inclusive leadership workshops for leaders in all operating countries. These workshops aim to improve understanding of inclusive and non-inclusive behaviour. Members of the Executive Committee attended the first of these workshops this year.

Reward and recognition

To support the goal of attracting and retaining the best people, Vodafone provides competitive and fair rates of pay and benefits in each local market where it operates.

In the 2009 financial year, Vodafone extended reward differentiation based on individual contribution through the global reward programmes. This included individual differentiation on both the global short term incentive plan and the global long term incentive plan.

A variety of share plans are offered to incentivise and retain employees and in July 2008, all eligible employees across the Group were granted 290 shares under the global allshare plan.

Retirement benefits are provided to employees and vary depending on the conditions and practices in the countries concerned. These are provided through a variety of arrangements including defined benefit and defined contribution schemes.

Health, safety and wellbeing

The health, safety and wellbeing (‘HS&W’) of Vodafone’s customers, employees and others who could be affected by its activities are of paramount importance to Vodafone and the Group applies rigorous standards to all of its operations.

Following a review of business activities in the 2009 financial year, Vodafone introduced a group wide product safety and assurance policy to provide clear standards and accountabilities for managing HS&W in the development, sourcing, sale and use of products.

This year saw increasing importance placed on integration of HS&W into Vodafone businesses in developing markets. Supplier performance in managing high risk areas, such as network deployment, was a major focus. A range of initiatives included producing a ‘ Guide to Partnering with Vodafone’ for suppliers, establishing access for suppliers to health and safety resources online and actively engaging with the Group’s global network suppliers to agree safety standards.

The Group’s continued focus on the implementation of wellbeing initiatives across the business saw a significant improvement in responses by employees to wellbeing questions in the 2008 people survey.

Employment policies

The Group’s employment policies are developed to reflect local legal, cultural and employment requirements. The Group seeks to maintain high standards wherever the Group operates, as Vodafone aims to ensure that it is recognised as an employer of choice. The Group considers its employee relations to be good.

Key performance indicators⁽¹⁾

KPI	2009	2008	2007
Total number of employees(2)	79,097	72,375	66,343
Employee turnover rates (%)	13.0	15.2	14.2
Average training spend per employee (£)	600	704	530
Number of women in the top senior management roles	29	26	22
	out of 221	out of 211	out of 204
Number of nationalities in the top senior management roles	23	20	20

Notes:
(1)	Of the total number of employees, 71,664 (2008: 62,456, 2007: 59,909) are included in the scope of these figures.
(2)	Represents the average number of employees during the financial year, incorporating employees of newly acquired entities from the date of acquisition and the Group’s share of employees in joint ventures.