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Personnel Management

To offer the best possible product quality, metals and mining companies are today required to employ sophisticated technology processes and ensure strict compliance with them. This means stringent requirements for the skills and competences of employees across the value creation chain. To ensure sustainably high product quality and production safety, the Company is committed to the ongoing improvement of its personnel management framework, with a special focus on recruiting and retaining highly-skilled employees. Corporate training is a major part of these efforts.

The Company’s priorities in personnel management are stipulated in its Development Strategy.

Corporate culture

Metalloinvest employs 48,111Headcount at the Company’s four core production assets. people in the Belgorod, Kursk, and Orenburg regions, where the Company’s key operating assets are located. The Company’s unique corporate culture and production system ensure each employee can realise their full potential. Regardless of their position, religion, or political preferences, employees gain unique experience in interaction with their colleagues and partners, which opens up great opportunities to rise to leading positions during their careers. The Company encourages its employees to learn and develop. The training and skills development programmes offered by the Company are aimed at improving professional competencies while also developing strong management and leadership skills.

The Company guarantees its employees competitive and safe working conditions, uses advanced workplace technologies and ensures efficient employee recruitment, orientation and development.

10 years

The average length of employment at Metalloinvest’s enterprises exceeds

~ 50%

of employees have university or vocational training degrees

All employees, no matter the type and nature of their employment, are covered by collective agreements, which are revised every three years.

2016 projects

  • Automation of core HR management processes through SAP roll-out
  • Centralisation of HR administration functions using the cross-functional shared service centre
  • Roll-out of a single non-financial incentive system across Company enterprises
  • Merger of OEMK’s healthcare and treatment facility and LebGOK-Health into a single legal entity
  • Repair services reorganisation
  • Introduction of Corporate University programmes
  • Improvement of talent pool management and development of modular programmes for talent pool development
  • Roll-out of remote training programmes
  • Unification of internal communications management
  • Unification of organisational structures

Staff structure and headcount

In building its personnel management system, Metalloinvest focuses on business objectives and the ongoing sustainable development of the regions where the Company operates. Metalloinvest’s key assets are located in the Belgorod, Kursk and Orenburg regions, where over 98.8% of its staff work.

Personnel structure by enterprise, people

Personnel structure by enterprise, people Personnel structure by enterprise, peopleEnlarge

Staff structure by gender, people

Staff structure by gender, people<br />  Staff structure by gender, people<br /> Enlarge

Staff structure by category, %

Staff structure by category, % Staff structure by category, %Enlarge

The growth in the Company’s overall headcount in 2016 is due to the staff transferred to Lebedinsky GOK from Lebedinsky GOK’s Mechanical Repair Plant (Lebedinsky GOK RMZ) and Lebedinsky GOK’s Electrical Equipment Repair Plant (Lebedinsky GOK EERZ) (2,094 people), and staff re-employed by Mikhailovsky GOK from Mining Equipment Repair Plant (3,082 people), which were not consolidated previously for the Annual Report.

Personnel recruitment

Metalloinvest opts for in-house recruitment, including for senior executive roles, giving preference to candidates from the regions where it operates.

Newly hired employees by enterprises

Newly hired employees by enterprises Newly hired employees by enterprisesEnlarge

Work with education institutions

    To recruit young specialists (under the age of 35), the Company actively cooperates with specialised higher and vocational educational institutions. More than 15 educational institutions in the regions where the Company operates are among its long-standing partners. Metalloinvest offers students internship programmes with the opportunity of permanent employment. Young specialists, having completed an internship and mastered the specifics of Metalloinvest’s operations, are a valuable addition to the Company’s talent pool, who generally soon become highly-qualified professionals.

    In 2016, 2,225 students with relevant qualifications completed their production, engineering and undergraduate training at Metalloinvest’s enterprises.

Employee development

In 2016, Metalloinvest ranked 34th among the Top 100 Employers in the Engineering category of the Most Attractive Russian Employers rating

Professional growth and development of management competencies

In 2016, the Company adopted its Regulations on Personnel Corporate Training and Development.

The document sets out a systematic approach to the organisation of the training process and the evaluation of its effectiveness as the main objective of the personnel corporate training and development system.

The Company’s training system covers all employee levels, from senior management to workers. In 2016, the Corporate University launched its first training programmes.

In 2016, the Company’s total personnel training costs amounted to RUB 75.47 million (RUB 1,727 per employee). Training for one employee takes on average 38 man-hours annually.

Training costs, RUB million49.746.975.5
Number of employees trained31,69630,63135,046
Cost of training per employee, RUB1,5691,1051,727

The significant increase in the Company’s training costs resulted from the launch of the Corporate University and the introduction of a number of new multi-level corporate training and development programmes.

Average annual training hours per employee by employee category, man-hours

Average annual training hours per employee by employee category, man-hours Average annual training hours per employee by employee category, man-hoursEnlarge

The change in hours was due to the decrease in the average headcount of workers and the revised training format offering sessions for larger groups of workers and therefore bringing down the number of training hours.

In 2016, the Company’s plants held professional training in the areas of occupational health, industrial and environmental safety, vocational training programmes, retraining and skills development, training to master a second (adjacent) trade and special purpose courses.

Talent pool

Number of employees who have completed talent pool development programmes, people

Number of employees who have completed talent pool
development programmes, people Number of employees who have completed talent pool
development programmes, peopleEnlarge

In 2016, Metalloinvest continued building the talent pool of its controlled entities to ensure the availability of the required workforce for the next one to three years. As at the end of the reporting year, a total of 803 employees had completed talent pool development programme.

The higher number of line managers and specialists trained and added to the talent pool was due to the launch of the Company’s Corporate University.

Incentives and motivation

Remuneration system

Metalloinvest’s remuneration system is performance-based and takes into account the specifics of regional labour markets, and the individual contribution of each employee.

In order to maintain the level of its employees’ salaries, the Company indexes them in line with collective agreements.

In 2016, the average monthly salary of employees of Lebedinsky GOK, Mikhailovsky GOK, OEMK and Ural Steel increased by 3% year-on-year. The average monthly salary at the Company’s enterprises exceeds regional salary levels across the regions in which the Company operates: by 55% in the Belgorod region (Lebedinsky GOK and OEMK); by 58% in the Kursk region (Mikhailovsky GOK); and by 37% in the Orenburg region (Ural Steel).

Average salary at the Metalloinvest’s’s key enterprises as compared to average salary levels across the regions in which the Company operates
Region Average regional salary, RUB Average salary at the Company’s enterprises, RUB
2014 2015 2016 2014 2015 2016
Belgorod Region 23,975 25,364 26,869 37,890 40,532 41,607
Kursk Region 23,161 23,855 25,309 34,543 38,627 39,880
Orenburg Region 23,531 24,936 26,128 33,957 34,685 35,822
Average salary     35,206 38,665 39,814

Harmonisation of compensation practices

In 2015, a decision was made to launch a project to harmonise the Company’s compensation practices.

In 2016, the Company developed a payroll structure organised by categories of professions and positions; performed test calculations; approved a salary grid target model; and adopted unified compensation and bonus regulations for its controlled entities, along with a number of other local by-laws. The unified compensation system became effective as of 1 January 2017. The system is based on the Company’s unified list of salary disbursements and deductions developed in 2015 and on the single calculation algorithms approved in the same year.

The system of financial incentives includes extra rewards paid on top of the employees’ base salary for their active involvement in the Company’s affairs. These are split into the following categories:

  • rewards to commemorate landmark events and milestones;
  • contest rewards;
  • rewards for participation in corporate events;
  • rewards to those honoured with awards and titles;
  • paid additional vacation days as per the collective agreement;
  • compensation for occupational injuries (by agreement of the parties);
  • severance pay upon employment termination or retirement.

Non-financial incentive system

As part of the development of its corporate culture, the Company actively uses non-financial incentives. The Company’s non-financial incentive system is designed to align its employees’ behaviour with Metalloinvest’s values and goals. It includes corporate events, contests, corporate awards, and tools to gauge and enhance employee engagement. As part of its updated approach, the Company is implementing a set of corporate events aimed at boosting employee motivation and developing teambuilding within the Company. In 2015, the Company focused on analysing its existing non-financial incentive tools and activities and developing an approach for their unification. The concept of non-financial incentive tools and a new corporate award policy based on analysis results were designed and launched in 2016.

Employees engagement

In 2015, an anonymous engagement survey was carried out at Metallloinvest’s enterprises. It showed that Metalloinvest enjoys a high level of employee loyalty, with 80% of employees willing to remain working for the Company for the long term, 78% ready to recommend Metalloinvest as a good employer to their friends, and 73% proud to be part of the Company. Around 54% are ready to give extra effort and take on tasks outside of their regular duties.

Following the survey, Company-wide and individual projects were developed for each enterprise. In 2016, over 40 projects and initiatives were implemented to raise employee efficiency and loyalty.

A third engagement survey is planned for 2017 to measure the effectiveness of these initiatives.

Social support for employees

Metalloinvest operates a social support system focused on building and maintaining the long-term motivation of employees by providing them with purpose-oriented social benefits.

Internal communications system

Employees are a key stakeholder group for the Company. Internal communications are managed by the Company’s Corporate Communications Department and the enterprises’ internal communications functions responsible for the implementation of communications programmes for employees.

Metalloinvest has developed a feedback procedure, which allows employees to interact with the Company’s management. All enterprises have on-site “Your Voice” feedback boxes to collect employee questions. All of the questions received through these boxes are collected and classified by the enterprises’ corporate communications departments and are further reviewed and addressed with the involvement of the relevant business units. Responses are communicated to employees via the media, internal communications channels or in person, depending on the question type. The project was launched in autumn 2015. In 2016, over 140 questions from the enterprises’ employees were received and handled. Employees can also raise their questions during regular personal meetings with managers at various levels.

Social spending breakdown, RUB million

Social spending breakdown, RUB million Social spending breakdown, RUB millionEnlarge

Trade union and internal employee associations

Metalloinvest actively cooperates with the leaders of primary trade union organisations of the Russian Mining and Metallurgical Trade Union, with more than 90% of the Company’s employees being members. In addition to primary trade union organisations, internal employee associations are also set up at the Company’s enterprises representing the interests of certain categories of workers, such as veterans councils, youth councils, women’s councils and others.