Human resources

Workforce

2011 was characterized by an increase in the workforce by in excess of 10%. This was due to the completion of manning of drilling and offshore assets, the acquisition of new offshore and onshore projects and support on projects acquired in areas under development (mainly Canada and Mexico).

Payroll

In line with employment dynamics, the value of the payroll increased in 2011 compared to 2010 (€1,750 million at the end of 2011 compared to €1,627 million in 2010). This is accounted for by a combination of growth in the absolute head count and by a higher pro-capita cost compared to 2010, which rose due to a variation in the mix of nationalities used.

HR control system

2011 saw the completion of the following activities concerned with improving the governance of HR processes:

  • the extension of the GHRS integrated personnel management system to over 50 legal entities, bringing the percentage of the total workforce directly monitored by the system to 98%;
  • launch of the ‘GHRS One Step Ahead’ project, which will lead to further integration of HR processes within the IBIS Model, in particular the Compensation and Talent Management process;
  • start-up of an automatic interface project between all active payroll systems in the Group and of the Data Warehouse.
    In addition, a new dashboard for monitoring Labour Cost trends was designed and developed.

Industrial relations

Saipem’s approach to industrial relations is to consider it both necessary and vital to pay close attention to the handling of the diverse socio-economic and legal contexts prevailing in the countries in which the Company operates.
For many years now, the Company’s industrial relations model has focused on ensuring harmonization and optimal management, in accordance with Company policies, of relations with trade unions and employers’ associations, as well as political institutions and public bodies.
In line with this approach, 2011 saw various issues negotiated with national representatives of trade union organizations from the Energy and Maritime sectors.
The most significant issues that involved Saipem or specific business sectors were as follows.
Through the employers’ association Confitarma, Saipem took part in preliminary meetings for the renewal of the collective labour agreement for seamen serving on board special vessels, which expired on December 31, 2010. Negotiations are ongoing.

An accord was signed for the renewal of the ITF Agreement. This set both the legal and pay conditions that will be in force for the whole of 2012.
In the energy sector, an agreement was signed with the national trade union secretaries which redefines the regulations and allowances for offshore construction and drilling activities.
Meetings were held with union representatives to define the instruments needed to ensure efficient management of drilling facilities operating in Italy.
Following a reorganization project that affected environmental activities, and on the basis of resolutions of the Board of Directors and agreements reached with trade union representatives in October, as of November 1, 2011 the business unit SMALT was transferred to the Eni company Syndial along with its 32 human resources.
Using the same methods, and following resolutions of the Boards of directors of Saipem and SES, the procedures for the merger of SES into Saipem, effective as of January 1, 2012, were set in motion and concluded in September and October and the minutes were duly signed by the trade union representatives.
Company functions in charge of monitoring trade union events in the various geographical and operational contexts followed the developments of contract renewal negotiations for Drilling personnel in Latin American countries as well as the series of meetings that culminated in the signing of the GLNG Gas Pipelinei Greenfields agreement between Saipem Australia Pty Ltd and the Australian Workers Union.

Human resources

In 2011 the Human Resources Management function implemented a series of initiatives targeted at increasing efficiency and monitoring and analyzing key indicators relating to Saipem personnel. These initiatives are set within the framework of a broader plan initiated by Saipem Human Resources management with the aim of supplying Business Unit HR and Line Managers with timely monitoring of the main HR management issues.

In the context of the development of guidance initiatives, in 2011 the HR department rolled out new IT tools (InfoDip, Vacation Planning System, already available and in use, others currently being designed), organized training programmes for internal users on themes of both a general and specific nature (taxes and social security, immigration, management of expatriates, etc.), and also published policies and guidelines in the Company Document Management System in order to make key management processes (management of resources involved in international assignments, personnel assignment in GHRS, etc.) both clearer and more transparent.
Further testing of new expatriate compensation packages for assignments from Italy to major European and US locations was carried out. The salary package was designed with the goal of bringing expatriate compensation packages for Italians closer to those paid to similar professional individuals working in highly competitive markets.
A comparative analysis of expatriate procedures and practices in various Saipem companies in Italy and abroad was completed.
Consolidation and standardization of international mobility policies of the various operational companies was likewise concluded. In July 2011 an operating procedure was issued covering the management of Italian personnel on overseas assignment.

Development, Organization, Communication and Compensation

Although a lack of continuity and uniformity across the various sectors and geographical areas can be observed, the difficult conditions on international markets are at present generally pushing businesses towards a radical rethink of traditional benchmark models and practices in the management of people, and are influencing investment choices in relation to organizational development.
These developments are compounded by the ongoing expansion of an Oil & Gas market which continues to suffer from a lack of talented and highly professional resources.
The new challenge is, therefore, to achieve greater competitiveness and greater innovation with fewer resources.
The Company’s focus is consequently shifting to the need to instil a greater sense of engagement in its employees and towards a new strategic paradigm for motivating and retaining critical resources, hinging on the creation of perceived value and the use of a mix of financial rewards and other types of ‘benefit’ such as experience and professional development.
Accordingly, Saipem’s recruitment, training, development, compensation, organization and communication activities are focusing strongly on the definition and implementation of solutions, policies and tools designed to ensure efficiency, flexibility, maximum fulfilment of business operating requirements and the realization of the full potential of Saipem’s key and distinctive resources and capabilities.
During 2011, a process was set in motion to redefine the Company’s People Strategy in relation to its business strategy.
This will lead to a review of the People Development model with the aim of making it more efficient, more attractive, both inside and outside Saipem, and easier to use by management and employees alike, including internationally.

In the light of the acquisition of a number of major projects by the Group, recruitment activities during 2011 were strongly oriented towards identifying personnel with extensive professional experience, taking advantage of significant opportunities offered by the market in this respect. In terms of junior personnel intake, the mix between new graduates and high school leavers was recalibrated in favour of the latter. Specifically, a number of initiatives targeted at centres of technical excellence in Italy were developed with the aim of strengthening Saipem’s image and reputation among young school leavers and its ability to attract such resources. Further training programmes focused on the in-house development of capabilities that are difficult to locate on the market. In order to attract resources with knowledge consonant with Saipem’s business characteristics, targeted employer branding initiatives were carried out in selected Italian universities.

With regard to Local Content, training and development campaigns for local resources in Kazakhstan and Saudi Arabia were launched with the aim of increasing the use of local resources in operative positions (i.e. technical roles in the offshore and drilling sectors). In Algeria, training programmes targeted at young local engineers were organized in association with the Université des Sciences et de la Technologie d’Oran to increase the availability of the technical and specialist capabilities required for the Engineering and Construction sectors, which are currently difficult to locate on the local labour market.
A post-university course in Project Control and a Masters university degree course in HSE are worthy of particular note.
To support the creation of a new engineering company in Angola, partnership relations were renewed with local universities and a staff recruitment campaign was carried out by means of announcements made in various countries around the world with a view to attracting Angolan personnel interested in repatriation.
Furthermore, to facilitate the development of the Karimun Yard, specific actions for the recruitment of local resources were undertaken, including monitoring of the labour market both on the island and in the surrounding area, as well as the planning of training schemes for key roles in the fabrication sector.

Training courses were characterized by a focus on law compliance initiatives. Following an initial phase focused on Italy, the initiatives were extended to cover the international sphere. Various e-learning courses were organized for a large number of resources in connection with Italian Legislative Decree 231/2001, the Code of Ethics and Security issues. The training initiatives for the members of the Compliance Committee of subsidiaries also continued during 2011, as did those for Employers, Safety Managers, Safety Supervisors and Officers regarding the new work safety legislation introduced under Legislative Decree No. 81/2008.
As regards professional training, an intense programme targeted at young school leavers was carried out over several sessions aimed at developing and consolidating the capabilities and skills required to cover a number of roles that are critical to Saipem’s business but which are difficult to locate on the market. Within the new Engineering and Construction Business Unit, a series of initiatives was launched that focused on redefining the roles of Project Director, Project Manager and Project Engineer, with a view to creating cross-disciplinary competencies for deployment on the types of project carried out by the Business Unit. For roles such as Project Director and Area Manager, an internationally oriented programme on Business Leadership themes was successfully set up.
Finally, courses targeted at the development of leadership, communication and HR management and development skills were carried out for senior and middle managers and for all managers in permanent offices, who are required to manage human resources in increasingly challenging and complex situations.

Activities in human resources development during the year were principally related to the introduction of the new strategic paradigms and the revision and updating of methodologies and tools in connection with the redefinition of the People Strategy.
The personnel ‘segmentation’ process was reviewed with the introduction of the concept of potential internal utility (functional, interfunctional and geographical) as an assessment criterion, while a new methodology for evaluating the potential of young resources and expert personnel was brought in.
Finally, a number of Italian middle managers were made ‘Knowledge Owners’ and ‘Key Managers’ during the year, with the purpose of leveraging their specific skills, strategic know-how and/or the critical nature of their roles for business.

Although showing signs of recovery compared to the period 2009-2010, market trends and global economic conditions continued to dictate a cautious attitude in relation to compensation policies.
Accordingly, variable incentive plans (including project incentives) and retention systems, which continued to be subject to careful analysis and rationalization, are being adopted on a selective basis, taking into account the specific characteristics of the relevant labour markets and current business trends and future outlooks.
As regards management, the current short-term monetary incentive scheme, which is linked to the individual’s performance, and the long-term monetary scheme, linked to the Company’s performance, was confirmed during the period for Italian and international managerial resources.
Individual annual monetary incentives, which were based on actual 2010 management performance, were paid out in April to 221 Italian senior managers, representing 77.5% of the total, with a total cost outlay of €7,244,000 (23.6% of total compensation at January 1, 2011). The new targets for 2011 for the same population of senior managers were also defined.
Additionally, July 2011 saw the allocation of deferred monetary incentives to 219 senior managers, representing 76.8% of all senior managers, with a total cost outlay of €4,502,000.
In order to boost the motivation of critical management resources, as well as to guarantee Saipem’s long-term performance and keep the compensation package in line with the market average, the Board of Directors reconfirmed the long-term monetary scheme that replaces the stock option plan that ran until 2008. The scheme was implemented in October 2011 for 73 critical Italian resources, representing 25.6% of Italian managerial staff.

(units) Average workforce 2010 Average workforce 2011
Offshore Engineering & Construction
13,533 13,336
Onshore Engineering & Construction
14,916 16,242
Offshore Drilling
1,508 1,655
Onshore Drilling
5,213 5,823
Staff positions 3,258 3,332
Total 38,428 40,388
Italian personnel 7,071 7,204
Other nationalities 31,357 33,184
Total 38,428 40,388
Italian personnel under open-ended contract 6,174 6,222
Italian personnel under fixed-term contract 897 982
Total 7,071 7,204
(units) Dec. 31, 2010 Dec. 31, 2011
Number of engineers 7,244 7,355
Number of employees 39,249 44,232

Finally, at global level, the adoption of the single grading system for organizational positions was further consolidated. The system makes it possible to carry out uniform, cross-company compensation analyses which can be used to set more accurate salary strategies that are better suited to the specificities of local markets.

The Organization activities carried out during the year were focused on implementing the strategic choices made by the Company.
Special attention was paid to the Engineering and Construction Business Unit with the implementation of an organizational model designed to ensure optimum integration and operational synergy and to maximize the specialist cross-disciplinary capabilities and competencies developed in the framework of the previous organizational set-up (Onshore and Offshore Business Units).
Additionally, flexible models of project execution were defined, with the objective of achieving the optimal deployment of centralized engineering and project management competencies geared towards the execution of complex projects characterized by a high level of plant engineering and technological content, in conjunction with the construction capabilities developed in the geographical areas where Saipem operates, including through the promotion of local content.
To complete the process of assigning key operating levers that are critical for achieving business objectives and maximizing results to the Business Units (while safeguarding the principle of the segregation of duties which lies at the heart of the Company’s governance model), the following activities were integrated within the operating Business Units:

  • development, management and maintenance of pertinent company assets, hence the abolition of the Asset function;
  • post order activities (expediting, purchased materials quality control, shipping and customs), which was separated from the Procurement function at both Corporate and world-wide level.

In line with the OSO - ‘Organizational System Optimization’ project implemented with the aim of simplifying and optimizing the organizational structures of the business units and with a view to achieving optimal levels of flexibility, effectiveness and efficiency, an organizational alignment process commenced for the Staff and Business Support functions.
2011 also saw the introduction of a new Company regulatory system, which was approved by the Board of Directors of Saipem in December 2010. The system comprises four levels: Policies, Management System Guidelines, Corporate Standards and Company Regulations.
Finally, in line with the implementation of the organizational model of the new E&C BU, a number of significant actions were carried out to achieve organizational and operational optimization in Saipem companies abroad and to define and implement governance and organizational models for starting up new companies in relation to new markets and business prospects.

As regards Communications, the issue of safety, which has always been at the centre of Saipem’s education and training projects, has taken on even greater importance since the Macondo accident. Awareness-raising and training courses were organized in 2011 at Saipem operating sites as part of the ongoing initiative to promote a company safety culture. To this end, company videos were produced and made available worldwide covering actual events involving real Saipem people who, by dealing with emergency situations encountered during offshore drilling operations in an exemplary manner, managed to prevent negative consequences for their colleagues and the environment.
The in-house magazine ‘Orizzonti’, now in its 20th year, has been redesigned for publication in three separate language editions (Italian, English and French) to allow for more targeted and efficient distribution. Total circulation is in excess of 10,000 copies.