HR Management Approach
Highly skilled NOVATEK employees are the key driver behind our business success and sustainability. The Company’s strategic priority is to provide employees with the most favorable conditions for work and professional development.
To attract and retain the best talent, the Company strives to ensure fair treatment and inclusion at the workplace, competitive salaries, and professional growth opportunities, especially in times of uncertainty.
In matters related to HR management, the Company is guided by such corporate documents as the Human Rights Policy, the Code of Business Conduct and Ethics, the Collective Bargaining Agreement and internal regulations and rules.
Matters related to HR management are monitored both at the Board of Directors level by the Remuneration and Nomination Committee and at the executive body level by the Deputy Chairman of the Management Board, who is responsible for HR management and internal social policy, including on diversity matters.
HR risks assessment
HR risks are assessed for all new Company projects as part of the ongoing ESIA. In particular, the FEED stages of the Yamal LNG and Arctic LNG 2 projects included an analysis of HR potential, supply and demand in the employment market of the Russian Arctic, risks and opportunities for workforce migration as well as an assessment of the local population’s mental well-being. NOVATEK’s Risk Map covers HR management risks, in particular the risk of losses due to the lack of qualified talent and tight competition for talent with industry peers.
Non-discrimination
NOVATEK has zero tolerance for any kind of discrimination or persecution based on any grounds that warrant protection under universally accepted principles and standards of international law. When recruiting, hiring, training, establishing job duties, wages and promotions, the Company looks at the qualifications, performance, skills, and experience of a person and adheres to the equal opportunity principle.
Discrimination-related incidents are tracked within the Company through grievance mechanisms (such as an anonymity hotline, for example).
Diversity and Inclusion
The Company values diversity of opinion and experience among our employees, as outlined in NOVATEK’s Human Rights Policy. The Company does not tolerate any kind of discrimination, whether based on gender, race, religion, physical abilities, or political affiliation. When recruiting, hiring, training, establishing job duties, wages, and promotions, the Company takes into account the qualifications, performance, skills, and experience of each person and adheres to the equal opportunity principle, without any bias.
Diversity matters, along with other aspects of the HR policy, are included in the agenda of meetings of the Remuneration and Nomination Committee of the Board of Directors.
People with disabilities are employed in the Kostroma, Chelyabinsk, Tyumen, Leningrad, and Moscow Regions as well as in the Yamal-Nenets Autonomous Region.
The Company guarantees such employees extended paid vacations and paid leave to undergo medical examinations. Employees who have appropriate recommendations in their individual rehabilitation plans.
Gender equality
At NOVATEK, wage rates for women and men are based on equal pay structures. Women working at the Company have the same opportunities for development and career advancement as men.
The gender breakdown at the Company is influenced by two key factors. Firstly, the nature of the Company’s operations in the severe climatic conditions of the Russian Far North involves a workforce comprised mainly of men. Secondly, Russian labor laws restrict women’s ability to work in severe climatic conditions. At the same time, the Company maintains a gender balance wherever possible.
Age diversity
The Company has initiatives in place to ensure a diverse workforce, including age diversity.
To attract and retain young talent, the Company implements a range of measures, from school student engagement programs to mentoring at universities and on-the-job training.
Local hiring
When sourcing its workforce, NOVATEK prioritizes local hires, while also promoting regional education and minimizing talent sourcing costs. The proportion of local residents (means the population of a certain area, regardless of their ethnic origins or culture) employed by the Company’s subsidiaries varies from region to region.
The Company also has employment programs for the indigenous peoples of the Far North. For example, the Company has in place the Regulations on Hiring Members of Indigenous Peoples of the Far North for the Yamal LNG project and the Local Hiring Policy for the Arctic LNG 2 project.
Hiring and exit
Being a constantly developing and fast-growing company, NOVATEK has grown its headcount by more than 60% over the past five years. The Company supports job rotation by providing employees with relocation opportunities.
To attract top talent in today’s market, NOVATEK continuously improves its procedures for recruiting highly skilled employees. In particular, the Company focuses on closing vacancies faster using advanced recruitment solutions, such as the E-Staff internal database, which is constantly updated, and relevant recruiting resources as well as headhunting and recommendations.
In some cases, particularly when sourcing and staffing for subsidiary projects, NOVATEK engages recruitment agencies. The Company favors internal candidates for open roles to expand career and professional growth opportunities for its people.
NOVATEK offers job security, striving to minimize forced exits. Downsizing becomes an option only when all possible prevention measures have been exhausted. When selecting among employees with equal productivity performance and qualifications during downsizing or job elimination, preference is given to retaining those who have worked for the Company for more than 10 years as well as single mothers and fathers raising children under 18. Employees who have been given notice eight weeks before their dismissal are provided one day a week (paid at their average pay rate) to look for another job.
Interaction between employees and management
The Company has in place a system allowing its employees to contact management, communicate their concerns, and receive feedback on their review and solution. Employee reports are discussed at meetings of subsidiary and affiliates heads with PAO NOVATEK’s Chairman of the Management Board. Close communication between employees and management enables the Company to understand employees’ current needs and respectively adjust its social policy.
Grievance mechanisms enable employees to raise any concerns without fear of retaliation and ensure that appropriate action is taken.
Trade union relations and collective bargaining agreements
NOVATEK regularly monitors changes in the labor market and boosts social support for its employees. In 2021, NOVATEK and its subsidiaries signed collective bargaining agreements for 2022–2024, which provided for indexing retirement benefits, one-off vacation payments, monthly social benefits for retired employees, and much more throughout 2022.
Collective bargaining agreements regulate the Company’s engagement with employees on all key labor matters.
Trade unions regularly interact with NOVATEK’s management on labor relations matters through targeted meetings, meetings of union committees, and conferences. In addition, trade unions represent the interests of employees to the Company’s management by communicating their urgent needs identified through close interaction.
Employee rights to associate, including forming and joining trade unions to protect their labor rights, freedoms, and legitimate interests, are also set out in collective bargaining agreements.
Motivation and remuneration system
NOVATEK’s performance-based remuneration system aims to source, motivate, and retain employees with the necessary qualifications to achieve the Company’s objectives in the most effective and efficient way.
The minimum wage of NOVATEK employees across the Company’s regions of operation is traditionally almost twice as high as the local minimum wage. In addition, NOVATEK performs salary indexation on a regular basis in line with its collective bargaining agreement.
Employee remuneration is determined in a manner providing for a reasonable and justified ratio of fixed and variable parts, the latter depending on the Company’s performance and the employee’s personal (individual) contribution. Compensation and benefits packages offered by the Company are also an important part of the remuneration system.
The variable part of remuneration payable to Management Board members and other key employees uses KPIs aligned with the Company’s strategic goals.
The Company seeks to increase employee engagement in its operations by encouraging efficiency and optimization proposals. For several years now, NOVATEK has been running the Innovator program, under which every employee can not only put forward a business improvement initiative but also be rewarded for it.
The Company also actively uses non-financial incentives in addition to financial ones.
