Deputy CEO, Organisational Development and Human Resources Management
A key priority of Metalloinvest’s HR policy is the establishment of a transparent HR management system to hire skilled and committed personnel to achieve the Company’s goals in line with its current production needs and strategic objectives.
Metalloinvest is committed to using new technologies that can improve work places, the selection and adaptation of employees, their professional training, and that can also create a conducive environment for the personnel to fulfill their potentials and improve their commitment.
The Company is proud of the following HR achievements:
- an employee works at Metalloinvest for over 10 years on average;
- over 50% of its personnel hold university-level or trade-school diplomas;
- Company personnel earn over 40% more than the average wage in the regions where it operates.
Changes in headcount at Metalloinvest’s plants over the last 5 years reflect the Company’s focus on improving labour efficiency.
In 2014, the average headcount at Lebedinsky GOK, Mikhailovsky GOK, OEMK and Ural Steel was 42,000. Whatever headcount reduction took place was due to restructuring at Ural Steel.
The Company has sought to protect the legal rights and interests of the personnel it lays off. When it was downsizing, Ural Steel undertook a “soft” redundancy programme to retain its key skilled personnel and offered severance benefits to the discharged personnel that were far more generous than the legal requirements. Ural Steel personnel who were made redundant following the restructuring were offered to relocate and fill jobs at other Company plants.
As part of the investment programme, the Company hires new personnel to operate the new machinery and equipment at Oxygen Facility #2 at OEMK, in the new Pellet Plant #3 that is under construction at Mikhailovsky GOK and in HBI-3 Plant at Lebedinsky GOK.
In 2014, the payroll of Lebedinsky GOK, Mikhailovsky GOK, OEMK and Ural Steel was RUB 18.5 billion, or 7% higher than in 2013. This was due to the indexation of wages in October 2013 and in August 2014 on account of inflation. The rise was compensated to an extent by headcount reduction.
In 2014, average monthly remuneration at Lebedinsky GOK, Mikhailovsky GOK, OEMK and Ural Steel increased by between 7.5% and 9.5% as compared with 2013.
The average monthly compensation of the employees exceeds wage levels in the regions where the company operates. In the Belgorod Region, wages at Lebedinsky GOK were higher by ≈51% than the regional average; at OEMK, by ≈66%. In the Kursk Region, compensation was ≈49% higher than the regional average at Mikhailovsky GOK, and, in the Orenburg Region at Ural Steel, they were higher by≈43%.
In 2014, the gender composition of personnel at Lebedinsky GOK, Mikhailovsky GOK, OEMK and Ural Steel remained unchanged.
Personnel turnover at all plants is at the optimum level, which enables the Company to replace exiting staff through planned recruitment programmes.
Industry Tariff Agreement
A member of the Board of the Association of Russian Steelmakers (AMROS), Metalloinvest maintains the achieved level of social partnership by actively participating in the development of the Agreement on Amendments and Additions to the Industry Tariff Agreement for Mining and Smelting Complex of Russia in 2014–2016.
The Agreement on Amendments extends the validity of the Remuneration section until the expiration date of the Industry Tariff Agreement (ITA) without any major changes to the employer’s obligations on increasing employee compensation. Additional changes were introduced in compliance with Federal Law #421-FZ dated December 28, 2013 On Introduction of Changes into Certain Legal Acts of the Russian Federation Following the Adoption of Federal Law On Special Assessment of Working Conditions.
The Industry Tariff Agreement regulates the key parameters of employer-employee relationships in areas such as remuneration, social programmes, training, and occupational health and safety. All companies in the industry are required to respect ITA conditions.
Implementation of Grading and KPI Systems
In 2014, Metalloinvest introduced a remuneration system that assessed and assigned ‘grades’ to the Company’s jobs and positions. The system was implemented in order to improve the transparency of the Company’s employee remuneration system, to establish an efficient structure in its jobs and positions and to ensure a fair system for setting salaries, compensations and benefits as well as ensuring that its compensation levels meet market standards.
As part of the project 143 individual positions and over 200 position categories were described and appraised at Mikhailovsky GOK and at the Management Company Metalloinvest. Four assessment committees were set up to ensure an objective appraisal of the positions. Management Company Metalloinvest established a top-level committee, which included members of the Management Board and other executives, and formed a committee of division directors that assessed position categories. At Mikhailovsky GOK, the top-level committee includes executive-level personnel while the committee for assessment of position categories includes supervisory-level personnel. In 2015, positions will be assessed at other plants: LGOK, OEMK and Ural Steel.
In 2014, Metalloinvest launched a KPI system to define the Company’s operational goals that are shared by all managerial personnel, and also some individual goals of individual units. The KPI system covers over 100 of Metalloinvest’s key managerial personnel as well as key operational managers at its enterprises (Lebedinsky GOK, Mikhailovsky GOK, OEMK and Ural Steel). In 2015, the number of employees involved in the programme is planned to increase to 500 managers, including mid-level managers of Metalloinvest and division managers at the Company’s enterprises.
In 2014, as a result of the grading and KPI systems, and labour market trends, the Company developed a new remuneration structure for Management Company Metalloinvest and executives of the Company’s enterprises (Lebedinsky GOK, Mikhailovsky GOK, OEMK and Ural Steel). The new system was launched in 2015.
Upskilling and the Development of Management Competencies
The level of Company staff with qualifications is rising due to its ongoing staff training system.
In 2014, Metalloinvest provided training for 32,000 staff, including more than 16,000 managers and specialists and 16,000 workers.
Under the Presidential Programme for the Development of Engineering Personnel developed by the Russian Federation’s Ministry of Education and Science, in 2014, the Company arranged training placements for the employees of the Management Company, including visits to operational sites of Rio Tinto and BHP Billiton in Australia. This enabled the selected employees to benefit from sharing experience in operational processes.
The Company continued to implement a programme to upgrade the competencies of top and mid-level executives. Its objective is to develop management skills, such as planning, delegation of authority, control, motivation, distribution of tasks, and time management. Over 1,500 managers participated in business training events to improve their management competencies.
During the first Strategic Session held for Metalloinvest’s top-level executives, business training activities were organised to develop various management skills, such as strategic planning, communications and team work.
Development of Corporate Competencies Model
A project to develop a corporate competencies model was launched in 2014. To enable data collection and competence modeling, focus groups were set up that included foremen, department and shop supervisors and structural division managers at Mikhailovsky GOK and OEMK. Meetings were held with the executives and interviews were arranged with individual managers at different production channels. The Management Company held interviews with members of the Management Board (in which the members made their predictions) and set up focus groups with division directors.
To check and correct the findings, remote assessment techniques were used in the process of development of corporate competences. Professional and personal questionnaires were issued at the Management Company, Lebedinsky GOK, Mikhailovsky GOK, OEMK, Ural Steel and Ural Scrap Cinoabt which were filled out by 1,180 Company managerial personnel. Assessment of division directors’ competence levels was carried out at the Management Company and for the executives of Mikhailovsky GOK.
All those participating in the assessment process received feedback.
The appraisal results were used to generate a model of competences that will be used to hire, promote and assess the performance of the Company’s employees and managers.
In order to improve dissemination of knowledge and to increase the number of people taking part in training, while respecting the fact that a common educational standard is required to apply to all enterprises regardless of their whereabouts, a remote training software Web Tutor was installed at the Company’s four enterprises (Lebedinsky GOK, Mikhailovsky GOK, Ural Steel UralMetCom) and at the Management Company. The programme was integrated with the HR and mail systems at the Company’s branches. At the next stage of implementation of the remote training system, all databases will be aligned with one another and will be integrated into a single training system.
In 2014, 657 managers and specialists included in the pool of potential candidates for managerial positions received required training. Training was also provided for 1,196 candidates for worker roles.
In 2014, the Company prepared a common policy for the development of a skill pool for the companies that Metalloinvest controls to ensure that the Company has the necessary staff to meet its requirements during the next 1 to 3 years.
In 2014, Metalloinvest held the 3rd Corporate Competition of Occupational Excellence at the Company’s four enterprises and Management Company to refine workers’ skills, to increase the attractiveness of worker-level jobs and to identify the top performers in their occupations. This competition covered nine steelmaking, mining and administrative occupations, and in total, 84 employees took part.
In line with the global best practices, in 2013 the Company examined for the first time employee engagement levels at Lebedinsky GOK, Mikhailovsky GOK, OEMK and the Management Company. Almost 29,000 staff were polled in the survey.
Employee engagement is an indicator that reflects the extent to which employees are proud of their work at a company, their willingness to stay with the company and to recommend it to others as an employer, as well as how much extra effort employees are willing to put in to achieve results.
The findings of the survey served as the basis for preparing and implementing a systemic approach to a project that aimed to increase the loyalty and commitment of Metalloinvest’s staff in order to retain the best personnel and improve the Company’s business processes. The implementation of this project contributes towards the improvement of the overall efficiency of the Company’s operations.
In 2014, 89 projects and activities were developed and implemented at Lebedinsky GOK, Mikhailovsky GOK and OEMK to increase their employee engagement levels, which were measured at 27, 35 and 27 respectively. Among these projects were a manufacturing contest at LGOK, a contest for the title of the Best Young Manager at MGOK, and an informationsharing day with the participation of top-level executives at OEMK.
Around 50 initiatives were suggested at the Management Company, including employee incentive schemes, upskilling programmes, the automation of internal business processes, and corporate sports programmes.
In 2015, a second survey of personnel commitment will be held to identify the effectiveness of the changes that have been implemented. This survey will also be used to prepare a plan for follow-up measures.
Development of the Company’s Image as an Employer
In 2014, Metalloinvest continued to implement a project aimed at shaping the Company’s image as an employer. Students of top Russian universities ranked Metalloinvest 36th in the TOP 100 ENGINEERING employers based on an annual poll to identify the 100 best employers in Russia. The Company achieved this good result in large part because it had launched a number of programmes for university students. One of these programmes offers internships to recent university graduates who are looking to start a career within the Company.