ALROSA: human resources management
Yakov Urinson, Member of the Supervisory Board of ALROSA, gave this interview to Rough&Polished to delineate the diamond mining company’s personnel policies.
You are in charge of the Personnel and Remuneration Committee under the Supervisory Board of ALROSA. What are the main functions of this committee?
The Committee reviews the evaluation criteria and remuneration and compensation amounts meant for the members of the Supervisory Board, as well as the issues related to validating and allotting salaries for the company’s president and members of the Board of Directors. All these matters are considered by the Committee which then submits proposals for appropriate actions by the Board of Directors and company management. The Committee also prepares recommendations for the general meeting of shareholders regarding the size of rewards and compensations paid to the members of the Auditing Commission.
The Committee also develops criteria for selecting candidates to the Board of Directors and to the position of the company’s president, considers essential terms of contracts to be concluded with them and makes recommendations with respect to the total number of members sitting on the Board and its personal composition.
Taking part in developing the company’s human resources policy, the Committee is expected to furnish it with qualified personnel bringing competent managers to its administration and creating effective incentives for their successful work.
This country is facing an acute problem of reproducing highly skilled workers and engineers. What programs are implemented by the company along this line?
For many years the company has been implementing its approved personnel policy, which pursues a set of arrangements specifically designed to reproduce skilled workers and technical staff.
In the first place, this is a system of in-house training and retraining of workers, which is based on the work of training courses within the company’s Training Center. Owing to this work the company’s personnel receives additional expertise to upgrade their current professions on a planned basis, which in turn has an effect on work rates and the level of workers’ wages. Scheduled work is also underway to train skilled workers to master new or related professions because of the technological restructuring of the company’s primary production due to its gradual transition to underground diamond mining.
There are other corporate programs to improve the vocational and educational level of engineers and managers. These are both in-house and out-house workshops and courses in relevant areas. Academic training of the company’s employees (getting the second higher education, academic title, training in specific professional fields subject to certification) is also practiced.
As for attracting new employees to work with the company, our manpower policy also involves sufficiently flexible methods. On the one hand, as a city-forming enterprise, the industrial infrastructure of which is located in ‘monocities’, the company is primarily focused on internal workforce resources. To this end, there was developed the Comprehensive Program of Professional Orientation for Schoolchildren adopted in schools in Western Yakutia. It is designed to ensure that by the end of school the young people studying in this region had an idea about basic techniques employed in diamond mining, knew the history of the diamond industry in the country and the most popular professions in this field. This makes the graduates able to choose their future occupation consciously in accordance with their preferences.
There is also another program stipulated by the personnel policy of the company. The company-profile universities and colleges hold out-house scientific Olympiads, and their participants are enrolled in educational institutions on the basis of their results receiving corporate scholarships and practical training at the production facilities of the company and then, after having been trained in their specialties, are employed. Many single-industry companies have also come to such a scheme and are successful in its implementation.
The activities of primary and secondary vocational institutions functioning in Yakutia having appropriate agreements with the company appear to be another important source of workforce replenishment.
I believe that this approach makes a substantial contribution to solving the problem of retaining young people in the Far North.
Is there any company equivalent of Russia’s “national gold personnel reserve” for mid-level managers?
The corporate policy of ALROSA suggests that managers of both medium and higher levels mainly have to be prepared by the company itself, going through all the stages of production and management skills, and they should thoroughly understand the company's operating specifics and its business structure. Certainly, ALROSA has a personnel reserve, which is annually reviewed and updated. In some cases, the company attracts experts from the market to introduce advanced technologies in engineering or management. It is necessary to impart a new quality to a particular area of production or management. But in general, as I said above, the personnel policy is initially focused on the capabilities of the company’s own staff.
What is the policy with regard to top managers at the level of vice presidents? For instance, in what way does the company seek replacements for Sergey Oulin and Yuri Ionov?
The vice presidents, whom you mentioned, vacated their offices due to their retirement. To the best of my knowledge, currently the company is optimizing its administration structure, including the level of top management.
At Yakut web forums people are ruthlessly debating the gap in monetary rewards between rank-and-file workers, specialists and senior managers, unprecedented in the Soviet time. This creates continuing tension in ALROSA’s working community. What kind of measures are being taken?
At web forums everything is discussed ruthlessly – this is what they are made for. The comparison with the Soviet Union is not correct, since at that time wealth was expressed not only and not so much in money as in having access to a certain level of supply which involved food and other goods, medical services, recreation facilities, education and so on. Just let me remind you of all the labor conflicts in the USSR in its late period. As for the current state of affairs, the level of wages and difference in remunerations in ALROSA are consistent with nationwide corporate practices and current labor market in this country. There is no tension, but there is a normal dialogue. Recently, the president of the company signed a new collective agreement with Profalmaz, ALROSA’s inter-regional trade union of workers, preceded by the discussion of each article of this agreement in all the working units of the company.
ALROSA offers a good social benefits package. In my view, this is the right kind of practice taking into account the working conditions in ‘monocities’ in the north. The company’s employees do not just get cash which they are free to spend at their discretion, but apart from that their families have an opportunity to spend their vacations at ALROSA’s sanatoriums, take advantage of subsidized medical care, benefits for travel, education, sports facilities and day care centers. I would like to stress it particularly that young workers in the company are also offered social protection like the so-called ‘relocation expenses,’ corporate support for young professionals in dealing with housing issues, mentoring, promoting to be included into the reserve for managerial positions, and the company also resorts to other motivational tools that have arisen in the Soviet period and which have been retained and improved.
As for the average wage in ALROSA, it is about 55,000 rubles a month.
Vladimir Teslenko for Rough&Polished
