Human Resources and Social Policy
At TMK, we treat HR management as an interconnected system. The systematic approach to HR management helps ensure TMK maintains its position as one of the world’s leading pipe producers and one of the industry’s best employers, providing competitive working conditions, social guarantees, professional development opportunities and growth potential for career-driven employees.
Our human capital is a key competitive advantage, and investment in personnel is integral to the Company’s long-term development. We see a return on this investment through improved performance across the Company’s key business metrics.
We pay close attention to internal customer focus as we believe it allows us to effectively address the pool of large-scale and ambitious business objectives we set for ourselves.Elena Pozolotina Vice President for Human Resources — Director of TMK2U Corporate University
Align TMK’s human capital with our strategic objectives and ensure employees are motivated and have the professional qualifications needed to achieve them.
TMK’s HR Strategy for 2020— 2027, which is based on TMK’s Business Strategy adopted by the Board of Directors in 2020, TMK’s HR Management, Internal Regulations and Policies Relevant to the of Strategy’s Key Functional Areas of corporate quality management standard.
TMK’s HR Strategy defines:
- corporate HR management principles
- corporate values
- strategic HR initiatives
- key areas and tasks
- corporate HR management KPIs.
Vice President for Human Resources — Director of TMK2U Corporate University provides overall guidance and coordinates HR management activities across TMK Group facilities. HR management organization at each of the Company facilities is structured as an integral part of the company-wide function.
Implementation of TMK’s HR Strategy in 2020
Corporate Development and Headcount Management
In 2020, TMK’s total headcount across its facilities in Russia, the EU (including Romania), the UAE and Kazakhstan was 37,160. We continued implementing our comprehensive approach to building a robust management framework focused on synchronizing business processes and the Company’s production plans across our organizations, enabling us to right-size our workforce across TMK. We maintained high staff performance in a challenging financial and economic environment brought about by the COVID-19 pandemic. Importantly, 2020 was marked by the integration of new assets into TMK Group.
Headcount changes in 2020 were due to:
- the implementation of the project to sell TMK’s American division and the retention of the two core divisions, Russian and European
- the addition of new production assets to the Russian division, specifically: JSC Uralchermet, LLC Parus and LLC Truby 2000 in the Russian division.
Employee Incentives and Compensation
Corporate motivation programs and unification of the compensation system:
- In 2020, the Unified Compensation System was in place at 11 production facilities across the Russian division and covered over 31,500 employees (90% of the Company’s headcount)
- We continue implementing and developing the Motivation Programme Based on management by objectives and key performance indicators (KPIs) for management by setting KPIs aligned with the system of balanced indicators by objectives.
- TMK Russian and Romanian plants have in place a special incentive scheme for key production employees operating and maintaining pipe rolling mills.
- A new bonus system based on management by objectives and KPIs for commercial staff was developed and introduced. The programme is expected to deliver results in 2021.
- A motivation system based on project results was introduced, aimed primarily at increasing employee involvement. Unified bonus rules have already proven to be effective their efficiency.
Average Pay at TMK in 2018–2020
The average pay across TMK was significantly affected by fluctuations in the financial market, in particular, changes in the Russian rouble exchange rate, lower production volumes and the sale of our American assets.
Average pay across the Company, excluding the American division, increased in roubles (up 3% year-on-year) and decreased in US dollars (down 7.9% year-on-year).
The average pay in local currency demonstrated an upward trend both in the Russian (up 1.1% year-on-year) and the European (up 5.7% year- on-year) divisions.
At any TMK entity each employee’s pay is linked to their performance. The Company offers competitive salaries to its employees across all TMK plants aligned with the financial performance of the Company’s divisions and ensures compliance with national laws, industry agreements and collective bargaining agreements as regards salary indexation.
In 2020, our representatives were actively engaged in negotiating with the Russian Mining and Metallurgical Trade Union and the Russian Metallurgists Association on the Industry Tariff Agreement for the Russian Metals and Mining Industry for 2020–2022.
New collective bargaining agreements were signed at TMK’s Romanian facilities: TMK-ARTROM — for a term to February 2021, TMK-RESITA — for 2020–2022.
All of the Company’s facilities complied with the requirements of all applicable codes and standards, whether industry-wide or set forth by collective bargaining agreements.
Promoting Employee Health
We have expanded all of TMK’s corporate recreation and health programs for the Company employees and their families in order to improve health, and offered them more leisure opportunities. However, due to the spread of the COVID-19 pandemic, health improvement activities for TMK employees were only partially implemented.
In a challenging epidemiological situation, the health of our employees is our special priority. Preventive measures are consistently carried out at all of the Company’s facilities and the health of TMK employees is monitored on an ongoing basis. In case of any signs of COVID-19, employees are tested and the Company arranges for medical care for those who fall ill. During the peak of COVID-19, we were able to shift a large number of office employees to remote work quickly, without losing efficiency. On top of that, we arranged for prompt tracking of sick people’s contact lists and were able to prevent local coronavirus outbreaks in 2020 as TMK plants maintained uninterrupted production.
In 2020, many of our employees and their family members received health resort treatment
In 2020, TMK pursued its programme to award legal entities and individuals in recognition of their contribution to promoting sustainable, long-term and mutually beneficial relationships with the Company with badges and diplomas For Business Cooperation with TMK.
The corporate pension programme is part of TMK’s benefit package, aimed at improving the quality of life for retired employees and motivating employees to stay with the Company and improve their performance.
Employee Development and Training
In 2020, TMK invested $1.47 million in corporate training and career enhancement programs.
Since 2018, ТМК2U Corporate University has been the main platform used by Company employees to develop their professional and business skills. The University’s headquarters are located at TMK’s R&D facility in Skolkovo while it has training grounds at all of the Company’s major production sites.
The following priority areas have been defined for ТМК2U:
- Establishing unified standards of employee qualifications and competencies across TMK’s facilities
- Formalizing, unifying and facilitating the sharing of competencies between the businesses to ensure process sustainability
- Compiling a full set of corporate professional standards factoring in the Group’s ongoing digitalization and technological innovations using uniform criteria for personnel recruitment, onboarding and training, as well as talent pool management
- Improving the framework of early career guidance comprising TMK-sponsored secondary schools and colleges; contributing to programs for gifted children (the Sirius Educational Center, the Tochka Opory (Foothold) career advising project, the I’m Professional national competition, the nationwide Internships project, the national Career Night event, etc.) and promoting the latest visualization tools in career advising (gamification, animation, etc.)
- Attracting gifted students of relevant higher and secondary professional education institutions through competitive selection and targeted support based on the analysis and forecast of the Company’s needs
- Building a system to foster managerial skills in the Company’s leaders and identify leadership potential in younger employees
- Expanding capabilities that enable the Company to manufacture high value-added products
- Supporting the implementation of investment projects through proactive development of relevant skills
- Building an environment that fosters creativity and design thinking required to develop next generation high-tech production facilities
- Ensuring succession for the Company’s management personnel by prioritizing candidates from the talent pool when making appointments to management positions
- Creating a system of regular qualification and competency assessments of the Company personnel using diverse methods
- Ensuring a continuous proactive training process by employing both conventional and innovative approaches to training programme design
- In partnership with public authorities, establishing resource-based personnel training centers (training grounds at production facilities, Skolkovo Innovation Center) based on corporate specialization and a dual education framework
- Organizing and holding corporate knowledge-building events (the Horizons International Forum, International Scientific and Practical Conference, professional excellence contests)
- Developing the intra-corporate social and knowledge-building environment through promoting the Mobi2U corporate social network and the SOTA2U online HR platform
- Designing and implementing a range of events to reinforce the visibility and positive perception of the Company’s HR brand
- Introducing bilingual distance and multimedia learning and assessment channels via a single interactive platform
- Creating industry-specific competency assessment centers for qualifications relevant for the metals and mining industry
- Fostering employee engagement
TMK2U Corporate University is core to the Company’s employee training and development system as well as its social surveys
HEADQUARTERED AT SKOLKOVO
5 TRAINING GROUNDS LOCATED AT THE COMPANY’S PRODUCTION FACILITIES
In 2019, on the initiative of TMK2U, steeluniversity launched the steelTalks webinar series. Speakers included top experts representing World Steel Association member companies from all over the world.
Corporate digital environment: SOTA2U online HR platform and Mobi2U mobile app
Building a culture of development
Horizons International Forum
The Forum was held online in November 2020
Event promotion through media and PR, online streaming: via the Mobi2U mobile application
Evaluation and development
- 21 apprenticeships were arranged (before COVID-19 restrictions)
- 6 trade-specific tests were developed, 3 are underway
- A mentoring program for senior management was introduced
- Based on the developed methodology, a corporate-wide certification of TMK Group employees started
- Internal customer focus level was assessed at SOTA2U, involving 127 assessed employees and over 1,200 assessors
- A pool of 22 internal assessors has been established