Development of our people
The year 2015 continued to bring new challenges for Outotec employees. To adapt the company’s operations to the further weakened market situation, Outotec was compelled to launch a new cost structure program to follow the earlier EUR 45 million cost saving program that resulted in more than 500 redundancies globally. Despite the many challenges, our people remain committed to enhance Outotec, and we have planned various actions to improve employee engagement and satisfaction.
Several rounds of restructuring in previous years had an impact on employee engagement. According to our bi-annual employee survey O’People, conducted in September 2015, all our key human resources indexes – employee engagement, performance enablement and job satisfaction – declined. The Employee Engagement index fell to 56 percent (2013: 69%); the Performance Enablement index was 63 percent (2013: 67%); and the Job Satisfaction index decreased to 61 percent (2013: 67%).
These weaker results represent a serious message for Outotec, and we have already taken action in response. The results have been discussed by all our management teams and in different locations in facilitated employee workshops. The high 79 percent response rate to the survey nevertheless shows that our employees are committed to help us enhance Outotec.
All leaders are held accountable for planning actions, taking corrective action based on results, and continuously following up on actions. All our top leaders also made personal commitments relating to the results in the Leaders’ Forum, an annual event that brings together our top leadership. A special emphasis will be put on building engagement, spirit and trust, even in these uncertain times. Employee events and change management activities will support these actions. The O’People Challenge campaign has been launched to promote local actions and share success stories. Teams can challenge each other to share their commitments, actions and stories, by posting short video clips in our internal social media. Progress will be measured in the O’People surveys in 2016.
More than 95 percent of Outotec employees have engaged in performance development dialogues (PDD). During 2015 we further improved our performance management practices. A new component, Outotec value-based behaviors, was embedded into the PDD process in order to enhance Outotec’s value-based culture. Related training was initiated, but due to our new cost structure program the planned wider training was put on hold in the fourth quarter of 2015.
Outotec’s values are the foundation of our strategy, and we want to ensure that all employees are aware of our values and behave in line with them in their everyday work. We also encourage our employees to set themselves behavioral development objectives through PDDs with their line managers. These objectives provide a concrete tool for managers to give structured feedback and support employees in their personal development.
Outotec’s main development initiatives in 2015 were strongly linked to our five strategic programs. A new Project Manager curriculum was developed as part of our Delivery Excellence program, and a sales development assessment was conducted as part of our Customer Focused Sales program.
The Project Manager curriculum has been designed to support the professional growth of project managers. It consists of three different levels from junior project manager to project director, and focuses on commercial project management and leadership. Training modules are supported by on-the-job learning, self-reflection and e-learning. During 2015 approximately 50 project managers completed the program.
An assessment of sales competences was carried out in the autumn 2015 to identify Outotec’s strengths and development needs in sales and sales management. Based on the results, personal development objectives were set for each participant.
Outotec also continued to offer classroom or virtual classroom training on products and technologies, global Outotec business processes and QEHS. Outotec has a strong portfolio of product and technology training, from introductory e-learning to advanced training on specific products, product groups or technologies, and these modules are continuously enhanced. In 2015, special emphasis was put on the internal marketing of our training offering, measures to facilitate access to learning opportunities, and the creation of new tools for supporting the design of high impact development initiatives. Many development activities including induction, leadership, languages, ICT and project management training were run locally in Outotec’s Market Area offices.
In addition, Outotec is continuing to focus on on-the-job learning. Our mentoring concept is being rolled-out in different locations. In 2015, a second mentoring program was organized in Finland with 14 mentor-mentee pairs. A cross-company mentoring program with 13 participants was successfully completed with KONE Corporation.
Job rotation opportunities are promoted within Outotec. During 2015 approximately 350 of our employees were sent on international project assignments, with an average length of three months. The fact that we employ over 70 expatriates in 16 countries is an important indication of Outotec’s investment in on-the-job learning and knowledge sharing around the globe.
Outotec’s Spare Parts team tested short-term job rotation during 2015 to endorse change and development within their organization. The program involved six job positions, with participants making extended business trips of approximately four weeks as job swaps between Chile, Australia, US, Peru and Finland. Feedback from participants was very positive, and there are plans to continue the program in 2016.
Outotec’s leadership profile is used as a framework for leadership development. The first profile-based leadership development tool, a 360° assessment, was rolled out globally in 2015, with a network of facilitators trained to support the use of this tool. Leaders and managers are guided to base their work on the four cornerstones of the profile: Provides direction; Inspires for collaboration; Drives high performance; and Drives change. We have also produced new virtual modules to support managers’ target setting and performance management skills. Leadership development training was delivered as part of the new Project Manager curriculum.
Change management training sessions were organized to help leaders drive changes. Transitional leadership was also on the agenda in the Leaders’ Forum, an annual event for our top leaders.
Active talent management, succession planning and internal job rotation continue to be the key elements in leadership development. Our ability to promote internal job rotation and fill leadership positions with good internal candidates has improved significantly.
We have been able to enhance our talent management maturity and expand the scope of our annual talent management process. More than 1,000 employees are invited to the annual process.
Outotec Experience is a two-day interactive workshop designed to give employees deeper insights into the company’s strategy, business, customers, values and processes. The program aims to enhance collaboration by engaging people from different parts of the organization. Discussions focus on how we can work together to add value for Outotec’s customers. The program is developed in-house, with Outotec leaders functioning as presenters.
One of the highlights of the Outotec Experience training was a session where participants wrote postcards with personal messages of thanks and recognition to colleagues near and far.
During 2015 a total of 17 Outotec Experience workshops were held around the world. Since the start of the program in 2014, nearly 770 of our employees from seven market areas have participated, and their feedback has always been very positive. The workshops’ learning impact has also been measured through questionnaires, with results showing remarkable improvement, especially concerning participants’ better understanding of our strategy, business process and organization.
For Outotec, it is very important to be able to recruit and retain world-class professionals as key assets who help to create the company’s intellectual property. Fair and motivating compensation is achieved through remuneration scaled to the requirements of the job and the performance and competences of the employee.
According to Outotec’s compensation policy, total compensation should align closely with the interests of Outotec, its shareholders and all employees. Our employee share savings plan supports this principle by making our employees into shareholders. A significant proportion of total compensation should be based on the company’s performance, as well as on each employee’s individual performance. In order to attract and retain highly competent professionals, total compensation should also be competitive compared to compensation levels in the relevant labor market.
Almost all Outotec employees benefit from an annual bonus system. These bonuses are paid to employees who have been employed by the company for at least six months during the calendar year, and are still employees when bonuses are paid. If a person was first hired during the accounting period, they qualify for the bonus after four months.
Incentive bonuses are determined on the basis of the attainment of the company’s financial targets, as well as targets set specifically for the employees or their departments. Maximum bonuses generally range from 10 to 60 percent of employees’ annual salary, depending on their position. Due to the difficult market environment and consequent operating losses and personnel reductions, no bonuses will be paid to management or employees for 2015.
Outotec has employees of over 60 nationalities in 32 countries. The company has signed the United Nations Global Compact, and we are committed to its principles on human rights, environment, labor, and anti-corruption. Our commitment to the Global Compact demonstrates our desire to further advance sustainability and social responsibility in our business practices.
We also recognize the UN’s Guiding Principles on Business and Human Rights, and we are developing an approach on this basis. We support the realization of basic human rights globally, and we do not knowingly provide any goods or services that will be used to carry out human rights abuses. We do not use any form of compulsory, forced or child labor, and we expect the same from our agents, suppliers, contractors and other business partners. We strive to contribute towards the effective abolition of the use of compulsory, forced or child labor globally, and we also respect the rights of indigenous peoples. Outotec also fully respects freedom of association and the right to collective bargaining.
We additionally value diversity in the workplace, and follow the principle of equal opportunities. Employees are selected and treated on the basis of their abilities and merits. Every individual is equally entitled to enjoy fair treatment, respect and common courtesy, without discrimination and regardless of their ethnic origin, nationality, religion, political views, gender, sexual orientation or age. We do not tolerate any form of harassment or behavior that could be considered offensive, intimidating, discriminating or insulting.
There were no reported incidents directly linking Outotec to human rights abuses or discrimination of any type in 2015.
We monitor diversity and equal opportunities in relation to the composition of our governance bodies and the breakdown of employees by category, gender, age group and other indicators.
Traditionally there are fewer women than men working in the mining and metals industry. To share the career experiences of female leaders, Outotec organized a panel discussion and networking event ’Women at Outotec’ in Espoo, Finland. More than 100 women attended the event in March 2015.
Our newly established company Outotec Services RSA, which makes up a significant part of our business in Sub-Saharan Africa, has qualified as a Black Economic Empowerment (BEE) entity in South Africa. A BEE entity is defined as a company of which 25% +1 vote of share capital is in the hands of historically disadvantaged South African ethnic groups. This ownership may involve individual shareholders or organizations such as educational trusts, community trusts and employees’ share ownership plans.
Outotec does business globally and has acquired companies in countries where certain human rights risks are widely recognized. As part of the integration of the acquired companies in 2015, we have been providing training on our Code of Conduct. This training emphasizes Outotec’s commitment to human rights and globally recognized labour practices to the employees and local managers of the acquired companies in the Middle East and Africa.