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EUROPEAN STEEL COMPANIES–UNIVERSITIES

JOINT CONFERENCE

Warsaw 26-27 April 2007

Restructuring of employment

and recruitment needs of Arcelor Mittal Steel Poland

Andrzej Wypych

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My (and not only) private life’s philosophy

" Those who don't want- look for a reason,

  Those who want - look for a way.„

(a gift from Grzegorz Turniak)

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Agenda

I. Restructuring of company Arcelor Mittal Poland –

conditions and social aspects in the context of recruitment needs.

II. Recruitment needs of Arcelor Mittal Poland and main

actions aimed at satisfying those needs.

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KEY:HeadquartersHuta CEDLERHuta FLORIANHuta KATOWICEHuta im. T.SENDZIMIRA

Basic information

Restructuring

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SpecificationNumber ofemployees

Reduction

Period before the creation of PHS S.A. E

mp

loym

en

t level a

s on

01.01.1999 35 16418 734

31.12.2001 16 430

Period after the creation of PHS S.A.01.01.2002 16 430

1 304

340105.03.2004 15 126

Period after the privatization of PHS S.A.

05.03.2004 15 1262 097*

01.01.2007 13 029

TOTAL01.01.1999 35 164

22 13501.01.2007 * 13029

* Incorporation of maintenance services took place on June 1, 2006 - 966 employees

Employment restructuring in the years 1999 – 2006 - summary

18 734

1.01.2002 creation of PHS S.A.

1.01.1999

1 304

1.01.2007

2 09735 164

16 430 15 126

5.03.2004 PHS S.A. privatization

13 029

Restructuring 1.

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Employment structure

Restructuring 1.

Date of start-up : 1976 1954 1902 1828

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Employment structure „Pareto 63-29-8%”

Production (69%):

direct and indirect service of technological lines, employees related to repairs in plants/production departments, quality control in plants/production plants.

Auxiliary (23%):  

production planning and settling, dispatchers in steel plants, technical production support, servicing the shutdown technological lines – employees do not participate in the technological process, IT, development, process engineers employed in the Headquarters, quality control, claims, environmental protection, ISO systems, servicing laboratories, logistics, warehouse and materials management, transport work control, fire protection and industrial security services, general operations teams, scales operation.

Administrative (8%):  

management organization, information and property protection (industrial security services not included), HR services, financial services, economy, accounting, sales and marketing, products forwarding, property restructuring, contracts and settlement of power utilities as well as repair services, archives, Hotel Jaskółka, and the Healthcare Center in ZHC.

Restructuring 1.

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Employment structure

Restructuring 1.

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Employment structure

Restructuring 1.

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Employment structure

Restructuring 1.

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Restructuring 2.

• Factors determining the restructuring process in MSP:timesocial stability (the so-called social acceptance)

■ quantitative• Aspects of the restructuring ■ qualitative

■ social

• Restructuring in the context of EU requirements - 10411(Company’s Business plan, Privatization Agreement, Protocol no.8 (‘Competition’) to the Accession Treaty), ‘the Pareto principle structure 63%-29%-8%’

• McKinsey project in MSP vs. the number of 10411

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Restructuring 3.

Characteristic features of the restructuring process in MSP

• Forced restructuring – trade unions resistance

• Time shortage – not enough time for implementation in view of the conflicts existing in the background, both in the company and in the country

• Lack of legal support on the part of the Polish government as regards mass lay-offs

• So far the restructuring has been to a small extent followed by changes in the organizational structure, workload optimization has been too slow, no new methods of work organization nor new management methods have been implemented.

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Restructuring 4.

• Causes of the so-called age gap „successors- fear” syndromecreation of big organizational unitscreation of small organizational units (taking over

employees from large companies by offering higher salaries to them)

• Instruments used in scope of employment restructuring and reduction: – Shield Program– Voluntary Retirement Scheme– Vocational Activation Scheme– Employee Retirement Scheme– Departure as a result of withdrawing from the Social Package (for

reason on the part of the employer)

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Recruitment needs 1.

Situation in MSP

• Lack of adequate databases with information on the existing human resources for planning purposes – works aimed at creating such a database are in progress.

• Lack of adequate recruitment policy for MSP – a project aimed at long-term recruitment of employees for MSP needs is in progress

• 1998 recruitment – 198 persons (including 35 with higher education)1999-2006 recruitment – 40 persons (including 16 with higher education)

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Number of employees who will become entitled to retirement pension in the years 2007 -2020.

Recruitment needs 1.

Influence of manpower optimization

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Employees’ age in individual Company Units.

Average age in the Company: 45 years and 11 months.

Average age at the following positions:- U (white-collar) – 47 years and 3 months- F (blue-collar) – 45 years and 6 months

Recruitment needs 1.

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Recruitment needs 2.

• Internal training and educational resources – brief information

HK (Katowice)– previously – Vocational school functioning by Huta Bankowa

currently - noneHC (Cedler) – Vocational school, apprenticeship in ZHC

currently - noneHF (Florian) – Vocational school functioning by HF

currently – noneHS (Krakow) – Vocational school functioning by HTS

currently – exists in a slightly changed form

Conclusion:It is necessary to take adequate steps in order to find new forms of ensuringblue-collar employees

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Recruitment needs 3.

• External training and educational resources (main centers)

– For the purposes of technology and production (63%)vocational secondary schools and vocational schools, (Silesian Secondary School of Science and Technology)Silesian University of Technology, Częstochowa University of TechnologyAGH

– For the purposes of auxiliary services (29%)vocational secondary schools and vocational schools, (Silesian Secondary School of Science and Technology)Silesian University of Technology, Częstochowa University of TechnologyAGH University of Science and TechnologyUniversity of Economics in Katowice, University of Economics in Kraków

– For administrative purposes (8%)University of SilesiaUniversity of Economics in Katowice, University of Economics in KrakówNational Louis University in Nowy Sącz

Please note:There has been a dramatic change in educational trends, it also concerns highereducation institutions,

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Recruitment needs 4.

General issues• Tasks related to the recruitment system are the responsibility of

both HR services and line management• Employment policy targets:

population replacement (closing the so-called age gap)qualitative replacement (related to new investments and

technological changes)• Demographic and employment situation is similar in every country (for

example Ireland, Germany, France); typical labor-related migration for instance from African countries is useless due to language and educational (professional) barrier.

• Influence of demographic depression in Poland on a number of schools graduates.

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Recruitment needs 5.

Issues to be dealt with by the employer• Taking advantage of the potential of retired employees or those who

are past the retirement age (creating a relevant database). • Extending internal opportunities in scope of vocational training (for

example the so-called vestibule schools).• Employees’ multifuctionality – an element supporting the process of

creating the succession system and smooth responding to employee needs.

• Issue of adequate motivation and motivating employees to accept employment offers made by MSP

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Recruitment needs 6.

Issues to be dealt with by training and educational institutions• Higher education institutions and schools do not only provide

future employees but they also support the process of identifying the needs of companies

• Changes as regards higher education institutions related to business attitude to education and the management of higher education institutions – grounds for the existence of specialist departments within one country. Perhaps international cooperation should be suggested? Changes based on the example of Silesian University of Technology and University of Science and Technology

• Existence of R&D centers – guarantee of keeping and winning employees, as well as financial support for higher education institutions.

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How to improve recruitment ?

‘Those who don't want - look for a reason, Those who want - look for a way.’

Thank you for your attention