Human talent development is the key to fulfilling our business strategy.

In Human Resources, the challenge is maintaining an efficient organizational culture, focused on business results and headed by the leaders of the institution. That’s why values like integrity, trust, respect and loyalty are fundamental pillars to continue expanding on our successes, aligned with our vision of being “a great ally to grow strong with Mexico.”

Our employee development has been crucial in the results Banorte has achieved today. The pursuit of a balance between results-oriented culture and generating a value proposition that meets the personal and professional expectations of our employees has become one of our strategic goals.

The value of our human capital

We have more than 30,000 employees, balanced evenly by gender: 50.4% are men and 49.6% are women.

Data on permanent employees in the Annuities and Pension Sector includes outsourcing employees.

We began participating in the social program
Youth Building the Future

Data corresponds to Banking Sector.

Data corresponds to Banking Sector.

In Insurance and Annuities, we also have a balanced workforce: 55.4% men and 44.6% women.

Data correspond to Insurance and Annuities sector.

• SRS 201-3
• SRS 401-1
• SRS 401-2
• SRS 405-2
• SRS 404-1

Talent development

One of the biggest challenges on the Human Resources agenda in 2018 was the integration of Grupo Financiero Interacciones. Nevertheless, we were able to integrate personnel from that group into critical and functional roles, according to structure of our organizational model.

We continued to use the Success Factors platform, managing talent through four modules:

• Recruitment management
• My profile
• Performance evaluation
• Succession and development

Succession planning

Aware that safeguarding the institution’s competitive future means having the right leaders to develop and apply business strategies, we succeeded in identifying talent with the qualities need to occupy top management positions. This is an ongoing process that involves following up closely with each executive in order to strengthen skills and overcome development gaps identified in performance evaluations.

New retention plan

We created a new long-term incentive plan to strength compensation, continuing our strategy of attracting and retaining key executives.

• SRS 401-1
• SRS 201-3
• SRS 401-2
• SRS 405-2

Talent attraction and retention

We activated a Development Opportunities Model to keep our employees informed of vacancies within the company so they could apply for those that best fit their qualifications and experience. With this, we provide a platform for developing internal talent and promote meritocracy.

We worked on designing a process for onboarding new employees, creating an experience that allowed us to rapidly integrate new talent to their duties and the institutional culture, shortening the learning curve.

Last year we began participating in one of the new government’s flagship programs, “Youth Building the Future,” under which youth signed up for this program can come to our offices and be trained in aspects of financial education, while providing support for administrative and branch activities. Our goal is to bring in 500 young people in 2019. We are confident that this program will give Mexican youth an opportunity to develop better skills and knowledge, and strengthen talent attraction in our industry.

For GFNorte, a key factor in hiring new talent is knowing the skills, ability and know-how of each applicant, always on a fair and equitable basis, avoiding any kind of discrimination.

Banking sector; amounts expressed in pesos.

In keeping with general parameters in our industry, we are continually working to offer employees a comprehensive and competitive salary and benefits package.

For our senior management, whose responsibilities are associated with market, credit or regulatory risk, we pay out annual bonuses and have a retention plan whose characteristics vary. The annual bonus is subject to fulfillment of certain goals and performance of risk and human resources metrics, which include regulatory compliance. Forty percent of the bonus is variable, and it is paid out over a three-year period. This compensation scheme motivates our top executives to make decisions based on profitability, vision, and the creation of long-term value.

• SRS 401-1

Training

For the tenth year in a row, we successfully implemented the Product Certification program throughout our branch network, ensuring that executives offer comprehensive solutions to our clients.

In 2018, more than 600 GFNorte executives attended leadership training and skill development programs at prestigious domestic and international institutions.

Institutional regulatory training programs were a priority in 2018, as they are every year, and we intensified training on the topic of data security and supported the roll-out of key transformation projects for GFNorte.

INVESTMENT IN TRAINING AND DEVELOPMENT
	2018	2017	% Chge.
Scholarships	9.9	9.8	1.0
Travel expenses for training	41.7	33.2	25.6
Courses and conferences	121.4	108.6	11.8
Total	173.0	151.6	14.1

Banking sector; amount expressed in millions of pesos.

AVERAGE HOURS OF TRAINING BY GENDER
Gender	2018	2017	2016	% Chge.
Women	31	37	30	-16
Men	32	33	29	-3
Average	32	35	29	-8

Data correspond to Banking sector.

AVERAGE HOURS OF TRAINING BY EMPLOYMENT CATEGORY
Employment category	2018	2017	2016	% Chge.
Director	45	34	29	32.4
Subdirector	32	40	30	-20.0
Manager	28	37	28	-24.3
Administrative	19	31	23	-38.7

Data correspond to Banking sector.

AVERAGE HOURS OF TRAINING BY GENDER
Gender	2018	2017	% Chge.
Women	14	14	0
Men	17	13	31
Average	16	14	14

Data correspond to Insurance and Annuities sector.

AVERAGE HOURS OF TRAINING BY EMPLOYMENT CATEGORY
Employment category	2018	2017	2016	% Chge.
Director	42	23	12	83
Subdirector	49	33	13	48
Manager	27	13	30	107
Administrative	12	13	9	-8

Data correspond to Insurance and Annuities sector.

Employee benefits

We are continually working to offer comprehensive salary and benefit packages to our employees that are competitive in our industry. The compensation we pay our employees includes benefits, most of which are above the minimum required by law.

MAIN BENEFITS
	Annual bonus		Grocery vouchers
	Savings fund		Social Security subsidy
	Paid vacation and vacation bonus		Comprehensive Health System
	Cash loans		Insurance
	Auto loans		Loans for sports facilities
	Mortgage loans		Pension plan and retirement savings

Quality medical service

We expanded the functions of our telephone service center to provide control, tracking and evaluation of employee hospitalizations covered by the major medical insurance policy provided by Seguros Banorte.

In September 2018, the Banorte Medical Unit (UMB) formally opened its doors to employees in the city of Monterrey, incorporating the specialties of Family Medicine, Geriatrics, Pediatrics and Gynecology. It is open from Monday to Friday, 8:00 a.m. to 8:00 p.m., and Saturdays from 8:00 a.m. to 2:00 p.m.

• In the first phase, we closed three external primary care units, generating expense savings.
• The evaluation of services provided has been 90% favorable (between excellent and good).
• The UMB has the capacity to handle 21,000 appointments a year in its four specialties.
  • A system was introduced for evaluating external medical services nationwide, providing information on user satisfaction both with the performance of both physicians and pharmacies. The result was a complaint ratio of less than 1% (0.55%) of all services provided (346,829) in 2018.

We signed agreements with nine hospitals in the cities of Guadalajara, Puebla, Tijuana, Tampico, León, Villahermosa and Campeche, improving the quality of care and security for our employees and their beneficiaries.

We established and applied a protocol for dealing with an unexpected outbreak of tonsillitis in the city of Monterrey (61 cases in three office buildings), introducing prevention and control mechanisms and keeping the illness from spreading to other cities and workplaces.

A flu vaccine campaign was carried out, with 7,000 doses applied to employees and their family members across the nation.

Personnel in our corporate offices were trained the Life Medical Support program, and units were installed for dealing with situations of cardiac arrest (DEAS).

Health and wellness

A total of 8,899 medical appointments were given in corporate offices in Mexico City, Monterrey and Guadalajara, 5,444 of which were nutritional consultations, 1,072 were medical checkups and 2,482 were physical activations.

We pilot tested the National Program for Emotional Wellness in the Workplace (Pronabet), which was joined voluntarily. We were the first financial institution to join the program, which is based on the Ministry of Labor and Social Planning Official Standard 035.

We began the first phase of a cancer screening program; its purpose is to promote early detection of breast, lung, prostate, cervical-uterine and colon cancers. The program was carried out in corporate offices (the KOI building in Monterrey).

During this exercise, four cases were detected among 816 participants, and were promptly treated.

Cardio-metabolic scans were also conducted in 13 corporate offices (4,019 employees), obtaining a global health rating of 7.8 on a scale of 1 to 10.

On the basis of these results, a follow-up program was designed for high-risk employees, and by the close of the year, 51% of these cases had been addressed.

In corporate dining rooms a program called “Green Trays” was introduced, which aims to improve the quality of our employees’ diet.

Banorte was recognized by the Mexican Workplace Wellness Council as a Responsibly Healthy Organization, and obtained level 4 out of 7 in the category of Behavior Modeling.

Process improvement

Our technological platform was strengthened in order to improve operability, security and service levels.

Dining rooms

We offer cafeterias for employees —five in Mexico City and three in Monterrey, in addition to two executive dining rooms, where we provide a variety of menus that include healthy options, and offer a 45% subsidy on the cost of the food.

Each month we serve around 70,000 meals, the cost of which is deducted from the paychecks of employees who opt for this service.

All our dining rooms are certified with H Distinction from the Ministry of Tourism, which means they meet the highest standards of cleanliness and hygiene.

• SRS 102-41

Collective bargaining agreement

As stipulated by Federal Labor Law, and respecting workers’ right to free association, Banco Mercantil del Norte, S.A., Institución de Banca Múltiple, Grupo Financiero Banorte, signed a collective bargaining agreement with the National Union of Banorte workers in 1992.

This union has been structurally autonomous since the time of its creation, and has a National Executive Committee whose members are elected by unionized workers.

Since the signing of this collective bargaining agreement, annual reviews are carried out during the National Congress, and are ratified in the presence of union delegates, then later presented to the Federal Conciliation and Arbitration Board.

• SRS 401-1

The collective bargaining contract incorporates the rights and obligations of 6,383 banking sector employees affiliated with the union, representing 31.4% of that sector’s workforce.

Personnel turnover

AVERAGE EMPLOYEE TURNOVER BY AGE RANGE AND GENDER
Gender	Age range	2018	2017	2016	% Chge. 2018 vs. 2017
Women	< 30 years	13.3	15.8	10.7	-15.8
	31 - 50 years	6.8	7.0	6.5	-2.5
	> 51 years	0.8	1.7	0.4	-56.4
Total Women		20.9	24.5	17.6	-14.9
Men	< 30 years	15.8	13.5	13.1	17.1
	31 - 50 years	7.2	6.4	7.2	12.7
	> 51 years	1.6	0.7	0.9	140.3
Total Men		24.6	20.5	21.2	19.7
Total		22.7	22.5	19.5	0.7

Data correspond to Banking sector.

AVERAGE EMPLOYEE TURNOVER BY AGE RANGE AND GENDER
Gender	Age range	2018	2017	2016	% Chge. 2018 vs. 2017
Women	< 30 years	2.1	2.9	4.0	-27.6
	31 - 50 years	0.2	0.4	5.5	-50.0
	> 51 years	3.8	3.7	0.4	2.7
Total Women		6.1	7.0	9.9	-12.9
Men	< 30 years	2.3	2.8	3.7	-17.9
	31 - 50 years	1.0	0.9	6.0	11.1
	> 51 years	4.8	5.9	0.9	-18.6
Total Men		8.1	9.6	10.5	-15.6
Total		7.1	8.3	10.2	-14.5

Data correspond to Insurance and Annuities.

Human Capital Outlook for 2019

Responding to the demands of a highly competitive market, which has been transforming business models in traditional banking, our institution has positioned itself as the second largest bank in the Mexican financial industry. We are proud of this distinction, and it inspires us to continue working to achieve the goals this organization has set for itself.

For this reason, redesigning our value proposition for personnel has become critical, while the generational challenge is now a reality for our institution. The mix of three generations working together requires us to evolve every one of our processes, evaluating the experiences and moments that matter in the lives of every co-worker, and facilitate new mechanisms for attracting and retaining talent.

Digital transformation and the identification of new work skills are one of the main challenges in Human Resources management for coming years. In 2019, our efforts will focus on the following projects:

• Strengthening the “Success Factors” technological platform with the launch of an Onboarding module, to manage the incorporation of new hires. This will shorten the learning curve and improve the experience of their integration into Banorte.
• Equipping a learning experience platform that will contain online content for employees to develop their skills.
• A new webpage and mobile application where employees can view their total compensation in monetized form and maximize their value perception.
• Our process of echelons, which works to promote a meritocracy in the promotion of branch personnel.
• The Employee Experience model will help us to improve the experiences of our personnel.

Transparency and gender equity

In 2018 we voluntarily filed a Report on Operations with a Gender Perspective to the Mexico delegation of UN Women, in order to communicate on the state of gender equity at Banorte. In this document we provide key figures on our human resource management, including matters such as wage parity, training hours, maternity and paternity leave, and breastfeeding rooms. We also report on our financial inclusiveness efforts through products like credit cards by gender, the “Mujer Banorte” product, receipt of wage remittances and social programs with a focus on women. Finally, we include Fundación Banorte’s strategy of promoting women who are educational leaders in Mexican preschools.
https://investors.banorte.com/~/media/Files/B/Banorte-IR/financial-information/annual-reports/es/2017/ropg.PDF

Mentoring program for Banorte women employees

As one of our gender equity and diversity initiatives, we promote women’s talent through a pilot internal mentoring program, the purpose of which is to create a network of mentors made up of Group Directors to support women employees at the managerial and sub-director level with more than five years of experience, helping them to strengthen their management skills. The program lasts for nine months and consists of the following phases:

1. Training: three-hour sessions to prepare mentors and mentees in order to empower their participation, align expectations and resolve logistical issues.
2. Mentoring sessions: Five individual sessions with mentors and mentees, to establish a relationship of trust in which the mentor guides and encourages the mentee according to her needs, to develop her talent. Over the course of these sessions, mentors will have access to personalized guidance from a consulting team allied with the group, and Banorte will provide them with a complete and detailed guide on the program’s implementation.
3. Workshops: once the mentoring sessions are complete, specialized workshops will be held for mentees on a variety of issues, depending on the areas that require strengthening:
   • Leadership skills: Helping participants to develop the eight skills needed to grow within the organization: communication, ambition, life balance, fear management, conflict management, delegation, career plan, and guilt-free leadership.
   • Creating and managing high-yield teams: empowering communication, alignment, decision-making and negotiation, and capacity for listening and empathy.
   • Personal branding: provides techniques on personal branding and public speaking at various levels, in order to achieve brand coherence and engagement with the target audience.
   • Negotiation: develops negotiating skills for mentees’ career plan; learning to dominate cooperative negotiation and to negotiate in groups and individually.
4. Evaluation: At the end of each mentoring, a cross survey is taken to evaluate the process.

Race with a cause

In May, with the participation of employees from our contact center and their families, we held the first “race with a cause” focused on empowerment of women and girls. Before the race, we distributed a message to raise awareness about the inequalities faced by women and girls in Mexico and in the world through various activities, like a commitment wall, the “woman I admire” campaign, and a cash donation to “Hagamos la Diferencia,” a nonprofit association committed to making a difference.