Annual Report 2013

Human Resources and Social Policy

The purpose of TMK’s HR Strategy is to ensure that human capital of the Group matches its strategic objectives, and that professional competencies and incentive programmes are in place to achieve them.

In 2013, TMK’s HR Strategy was implemented focusing on the following:

HR Management and Corporate Development

2013 saw implementation of a set of measures geared towards streamlining the management of business processes, corporate and staff structure, optimising the headcount and improving workforce productivity, such as:

  • building a global organisational structure of 4 divisions (Russian, European, US and Middle East) with TMK as a common management centre;
  • undertaking preliminary arrangements to unify organisational structure at TMK’s Russian plants;
  • introducing a product line–based production management system;
  • issuing recommendations on how to improve the efficiency of personnel management at TMK-IPSCO based on an in-depth analysis of HR processes, including payroll, bonuses, professional development, terms and conditions of collective bargaining agreements;
  • initiating and successfully implementing the reorganisation of the management system at the Orsky Machine Building Plant;
  • completing a number of working time analysis projects at the company’s trade departments and administrative function optimisation projects. These initiatives were implemented using up-to-date analysis techniques and methods helping to classify and re-allocate resources among divisions based on their priority.

In 2013, new production entities became part of the company. Nonetheless, due to the headcount optimisation efforts taken primarily at TMK’s Russian plants, the average total headcount remained almost flat.

TMK’s average headcount

201120122013
Average total headcount45,08044,26644,025
incl.:
Russian Division40,55439,56938,968
European Division1,9741,9982,019
US Division2,5522,6992,909
Middle East Division129

Employee Compensation and Incentives

Average wages and salaries at TMK (2012–2013 vs 2011), %

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In 2013, the wages and salaries at TMK grew by an average 12% y-o-y compensating for inflation losses in the regions and countries where we operate, thus helping the company to live up to its commitments provided for in the 2011–2013 Branch Tariff Agreement for the Mining and Metallurgical Industries of the Russian Federation.

TMK entities are attractive employers in the Russian, European and US job marketplaces, offering competitive remuneration and social benefits to their employees. We are working tirelessly on improving earnings structure and employee remuneration system. In 2013, we started to roll out a bonus system at TMK’s plants based on the Management by Objectives (MBO) method. This system proved efficient at the Sinarsky Pipe Plant and TAGMET and will be applied at other plants of the company.

Employee Development and Training

In 2013, 172 TMK employees completed internships within the Corporate Internship Programme

Continued improvement of professional and management competencies of our personnel is a precondition to sustainable growth and competitive performance of the company.

We address this issue holistically at each TMK division by providing high-quality, innovative and systematic employee trainings. In 2013, we increased financing of our corporate professional development programmes by almost 20%, spending approximately 5.5 mln USD on them. The funds were,inter alia, spent on long-term training programmes for the management of production entities and on the Six Sigma training programme designed to introduce quality management methods across the board.

Last year, we completed the Efficient Manager Programme of trainings for top managers at all production entities of the Russian Division. Overall, 840 managers were trained in 2012–2013, accounting for more than 30% of the total number of managers at these entities. Also, 120 employees of TMK and sales managers of the TMK Trade House took a corporate course in the Fundamentals and Basic Production Methods in the Pipe Business.

To attract university graduates to the company’s entities and have highly-skilled personnel trained, in 2013 we continued rolling out our dedicated new talent programme, within which:

  • 22 TMK employees were enrolled in the Ural Federal University named after the first President of Russia B. N. Yeltsin (UrFU). There are now 60 sponsored students from the company’s entities in the UrFU.
  • To support and encourage the most talented students of the National University of Science and Technology (MISiS) and attract them to TMK, the company introduced the A. D. Deineko scholarship for top students of the Piping Engineering and Equipment Department of the University. The first scholarship was awarded on 14 November 2013 at the MISiS career forum.
  • The TMK Youth Scientific and Technical Conference was held for the ninth time, where recent graduates representing all Divisions of the company presented their inventions and unique solutions, most of which are ready for manufacturing implementation.
  • Together with the Government of the Sverdlovsk Region, training grounds were built at the premises of the Seversky Tube Works and Sinarsky Pipe Plant for in-plant training of students. The investment made by the Government of the Sverdlovsk Region in this programme in 2012–2013 totalled 33.1 mln RUB.

In 2013, 172 TMK employees completed internships within the Corporate Internship Programme. 2013 was the first year when Romania-based entities of TMK were used for internships.