HR policy and employee overview

At RusHydro, we place great emphasis on human capital, as we believe that highly skilled, responsible, and diligent employees are key to the Group’s successful development.

The Company’s generating facilities in Russia and abroad are staffed with professionals with extensive operational experience and superior technical expertise. RusHydro’s HR policy aims to ensure ongoing improvement of labor relations and social development, create efficient and safe work environment, facilitate career growth, and ensure decent living standards and well-being for employees across the Group and its subsidiaries.

The Company’s stable performance allows it to maintain its employee headcount. As at December 31, 2019, RusHydro Group employed 69,547 people, down by 0.17% as compared to the previous reporting period.

RusHydro’s workforce structure breakdown by gender, age, and expertise reflects the nature of the industry. Men represent the majority of all employees (68.1%). In the management cohort, there are 3.5 times as many men as women; in the blue-collar category — 4.6 times as many men as women.

Nonetheless, women make up 62.0% of all employees in the white-collar category. 25.1% of RusHydro Group’s employees are aged 35 or younger. One of RusHydro Group’s priority tasks the area of personnel management is attracting young talent.

Over 76% of RusHydro employees work in the Far Eastern Federal District, where the Group’s facilities account for three fourth of total power generation providing electricity and heat transmission and distribution to end users.

Most of RusHydro employees work full-time (98.6% for RusHydro Subgroup and 99.8% for RAO ES East Subgroup) and under permanent employment contracts (88.7% for RusHydro Subgroup and 97.7% for RAO ES East Subgroup). [102−8]

Recruitment

RusHydro Group recruits staff, including management, on a competitive basis. This approach enables the Company to recruit motivated people who meet the qualification requirements.

Candidates regardless of gender, age and nationality compete for vacancies, where professional skills is the main selection criterion.

In 2019, RusHydro Group hired 13,173 people and created 1,569 new jobs following inauguration of additional generating capacities, increased scope of service projects, and transition to direct contracts with electricity consumers. On top of that, the Company increased electricity sales and opened single billing and payment centers in the Far East.

The employee departure rate* varies by region of operation from 3.7% in the Republic of Armenia to 25.8% in the North Caucasus Federal District.

Financial motivation and remuneration

RusHydro Group’s motivation and remuneration policy seeks to maintain a competitive salary level.

The remuneration systems in RusHydro’s subsidiaries are in compliance with the Russian labor legislation. They ensure increase in real wages of employees by means of annual wage indexation and financial incentives (bonuses) conditional on the company’s results (key performance indicators) and employee performance (individual bonus indicators).

Depending on the region of operation, entry-level wages at RusHydro Group are equal to or 14 times higher than the statutory minimum monthly wage. [202−1]

RusHydro Group adheres to the principle of equality and nondiscrimination on the basis of gender. We ensure equal base salary for all categories of male and female employees.

Development of employee potential

Continuous employee training and development has always been a major priority for RusHydro. Our people play an important role in strengthening the Company’s internal stability and help us achieve our strategic goals.

The continuous training system is in place to develop employee competencies to meet their current job requirements and be promoted as part of the talent pool arrangement. The Company offers employees professional retraining opportunities, including in accordance with occupational standards.

In 2019, RusHydro Group’s personnel development costs amounted to RUB 339 mn. The training is provided by the Corporate Hydropower University, a branch of RusHydro, which helps ensure an extensive personnel coverage and reduce per-course costs.

A total of 3,945 RusHydro and subsidiary employees received training at 97 courses, including:

• professional retraining — 215 employees (15 courses)
• professional development based on industry standards — 615 employees (27 courses);
• professional development — 1,512 employees (11 courses); As many as 19,559 employees attended distance-learning courses (46 courses).

In addition to training, the Corporate Hydropower University holds competitions and professional excellence contests among RusHydro Group employees. These events are intended to facilitate best practice sharing, identify best performers, and demonstrate the latest technologies. The reporting year saw:

• the second corporate competition for operations staff at cross-connection thermal power plants, which included 40 employees (five teams comprised of eight people each) from DGK, Kamchatskenergo, Magadanenergo, Sakhalinenergo, and Chukotenergo;
• corporate professional excellence competition in maintenance and repair of protective relaying and automation equipment based on WorldSkills standards at RusHydro’s branch Volzhskaya HPP and the Volga Training Center of the Corporate Hydropower University. The event involved 21 RusHydro employees and 6 students from industry-oriented universities (Novosibirsk State Technical University, Moscow Power Engineering Institute and its branch in Volzhsky);
• the first corporate engineering case championship of innovation and work improvement proposals called Ratsenergy. Contestants included 137 employees (37 teams) from Yakutskenergo, DGK, and Far Eastern Distribution Company (DRSK).

In 2019, RusHydro Group provided a total of 56,561 training courses to its employees under corporate training programs, further professional education and occupational training programs. The increase in the number of courses compared to 2018 came on the back of large-scale introduction of distance-learning options and implementation of professional standards in RusHydro’s operations. The respective action plan for introducing professional standards was developed and approved by RusHydro’s Board of Directors for the 2016−2019 period in line with the Russian Government’s Directive No. 5119p-P13 dated July 14, 2016. Following initiatives implemented under the action plan, by the end of 2019, 93% of employees met the professional standard requirements introduced in the Company.

Talent pool

RusHydro Group pays great attention to building a talent pool and training its management staff. Our management talent pool programs seek to:

• ensure a seamless and continuous management succession;
• improve the management recruitment and appointment process;
• encourage personnel to pursue career development;
• incentivize employees to enhance their professional skills and competence.

In 2019, the Company arranged and conducted the following talent pool training modules:

• Professional training in hydropower;
• Professional training in heat power engineering;
• Personal performance improvement;
• Safety culture and occupational safety.

Twenty-nine young professionals were included in RusHydro Group’s talent pool based on the results of the Internal Source of Energy-4 competition in 2019. They will be trained under the first Project Management module.

In addition, the talent pool members took part in the 9th International Forum of Young Power Professionals and Industrialists called the Fast and the Furious 2019. The events also included a conference of RusHydro Group’s young talent community, during which the project leaders presented the results of their work, formulated new ideas, formed a pool of projects for inclusion into the 2019−2020 work plan, and elected community leaders. The community operates on a voluntary basis to implement joint projects, share experience and practices, and search for new, more efficient approaches and solutions to deliver on RusHydro Group’s strategic priorities. The community set the key project streams as follows: Technology Leadership, Professional Development, Health and Safety, Comfortable Environment in the Regions of Operation. Stream coordinators assessed the results of a number of federal and local projects implemented under their stream.

In addition to offering training modules for talent pool candidates, RusHydro Group arranged a number of other events for young employees in 2019, including participation in industry-wide competitions in innovation, the engineering training initiative Technological Leadership School, the Youth Days at the St. Petersburg International Economic Forum, and the 2019 Russian Energy Week International Forum.

Personnel assessment

The Corporate Hydropower University and RusHydro’s Qualifications Assessment Center established in 2018 conduct employee assessment to create a talent pool.

In 2019, assessment was conducted to select potential candidates for the position of RusHydro Branch Director. Four candidates were identified and included in the talent pool for the director’s position, three potential candidates were identified for the position of first deputy branch director — chief engineer, two candidates for the position of deputy chief operations engineer, and two candidates for the position of deputy chief technical engineer.

The Company’s employees are tested for adequacy to the job and have their professional, business and personal qualities and achievements assessed. Managers and white-collar employees, regardless of gender, are assessed once every three years.

The Energy Sector Occupational Qualifications Council approved three tools for assessing professional qualifications to be used by RusHydro’s Qualifications Assessment Center. RusHydro Group experts took part in the development of the tools.

Eighty employees from RusHydro’s branches and subsidiaries were assessed by the Qualifications Assessment Center, with 63% successfully passing the test. In 2019, the Energy Sector Occupational Qualifications Council authorized the Qualifications Assessment Center to conduct assessments at two additional sites in the Far Eastern Federal District: RusHydro’s Sakhalinenergo and Magadanenergo training centers.

Personnel management system development plans

In 2020, the Qualifications Assessment Center will open additional assessment sites, contribute to the development of the national qualification system by establishing qualification standards in electrical and heat power engineering, provide training for experts, and conduct tests.

Talent pool and personnel development plans for 2020 include:

• the 9th All-Russia HPP Operations Staff Competition;
• professional skills competitions in the repair and maintenance of 110 kV overhead power lines;
• the 2nd Corporate Engineering Case Championship of Innovation and Work Improvement Proposals called Ratsenergy;
• the 3rd Corporate Championship WorldSkills Russia Juniors in Electrical Installations among the children from orphanages sponsored by RusHydro;
• a conference of RusHydro Group’s Young Employees Community;
• Corporate Championship WorldSkills Russia Juniors in Smart Electricity Metering Systems;
• the 10th Summer Energy School for high school students interested in hydropower;
• the 11th Energy for Development national contest of students' projects.

RusHydro’s Social Policy is an important incentive for furthering the Company’s social agenda, promoting social partnership practices, and making the Company a more attractive employer.

Tasks of the social policy:

• creation of an institutional environment for attracting and retaining young talent;
• maximization of employee commitment to RusHydro’s goals and principles;
• improvement of occupational relations taking into account the interests of the employer, employees and shareholders, including the government as the major one.

In its social policy, RusHydro Group follows international standards and best practices in the field of human rights, labor relations, environmental protection, anti-corruption initiatives and stakeholder relations. The Company relies on the Guidance Social policy Work with young people, training programs Support for families and mothers Healthcare and healthy lifestyle promotion Pension coverage Housing program Social and professional guidance for orphans on Social Responsibility (ISO 26000) and the universal principles enshrined in the UNGC Guide to Corporate Sustainability in the field of human rights, labor relations, environmental protection and anti-corruption initiatives, as well as the Social Charter of the Russian Business and the Tariff Agreement for the Electrical Power Industry of the Russian Federation. [102−12]

RusHydro Group grants the following benefits to full-time employees [401−2]:

• voluntary health insurance;
• insurance against accidents and diseases;
• disability/temporary disability compensation;
• maternity/paternity leave;
• one-off financial aid;
• other payments and benefits in accordance with collective bargaining agreements and in-house rules and regulations.

Corporate pension plans

НPrivate pension coverage is in focus of the Company’s social policy. It was introduced in 2008 to employees at RusHydro’s branches by offering several pension plans designed to finance the pension savings of different employee groups.

In 2019, the Company revised its pension plan in line with changes in the Russian pension system and approved its new Regulations on Private Pension Plan for Employees at RusHydro’s Branches by Order No. 670 of August 15, 2019.

The private pension plans include:

• The parity plan is jointly financed by an employee and the Company, with their contributions dependant on the employee’s period of participation in the program. To support soon-to-retire employees in accumulating pension capital, increased parity ratio has been established;
• The corporate plan (financed by the Company) consisting of:
  • the “Supporting” option — the Company accumulates pension contributions on registered pension accounts of employees who, as a result of the reform of the state pension system, do not receive or have a limited opportunity to form the funded part of the work pension (for employees born before 1966);
  • the “Well-deserved pension” option — the Company accumulates pension savings for employees retiring in 5 years and having a track length of service of at least 10 years in the industry and state awards, including those of the President and Government of the Russian Federation, state agencies, and corporate awards for working on energy facilities during recent 10 years;
  • the “Veterans” option — the Company accumulates pension savings on the pension accounts of its former employees as a supplementary pension for retired employees.

PJSC RusHydro continues to offer its "Co-financing” option where an employee, the Company, and the government jointly finance his or her pension savings.

Private pension plans are in place at 24 subsidiaries, including Hydroremont — VCC, Transport Company RusHydro, Kolymaenergo, DGK, Far Eastern distribution company (DRSK), Far Eastern Energy company (DEK), Kamchatskenergo, etc. The parity plan is underway in 20 subsidiaries, 13 subsidiaries have corporate plan options, predominantly the “Supporting” one, financed, while seven have elected the government’s “Co-financing” option.

Improving housing conditions for employees

RusHydro continues implementing a program to improve housing conditions for employees. The priority right to participate in the program is given to young professionals under the age of 30, who do not have their own apartment or house, relocated specialists, key and highly qualified specialists, as well as employees with many children, and single parents.

In 2019, pursuant to Regulations on Improving Employee Housing Conditions at Branches of PJSC RusHydro*, 109 employees received compensation of interest payments on mortgage loans and lease expenses. Furthermore, in 2019 employee housing programs were introduced at Yakutskenergo, Sakha Energy, and Kolymaenergo.

RusHydro Group’s corporate culture is an essential tool reflecting its values and strategic business priorities, as well as leveraging employees' initiatives to deliver on the Company’s long-term goals.

RusHydro Group is focused on unlocking the creative potential and promoting strong social commitment of employees. Over 1,000 employees contributed to RusHydro Planet, a video flash mob contest held as part of celebrating the Company’s 15th anniversary. As many as 22 creative videos featuring flash mobs participated in the contest to demonstrate both talent and team spirit of the Group’s employees on the background of its impressive energy facilities. Awards were conferred following online voting on YouTube.

The Power of Talent, another contest held to celebrate the 15th anniversary, attracted over 160 employees who made 70 stage appearances in three nominations — singing, dancing, and performance art. Online voting determined the final six and the audience award winner, while the jury of experts — prominent art professionals, directors, and actors — chose the winners.

Another important focus is health and healthy lifestyle promotion. Employees of RusHydro Group take part in all kinds of sports events — national projects (Russian Ski Track, Cross-Country Race of the Nation, GTO physical fitness tests), regional competitions (marathons, bicycle and ski races), team sport tournaments (soccer, volleyball, basketball, ice hockey, etc.), spartakiads organized by local trade unions, such as All-Russian Electric Trade Union.

To facilitate communication among employees and award the best athletes, corporate spartakiads were introduced in 2017. Around 1,000 employees of the Headquarters, 18 branches, and 25 subsidiaries took part in the Spartakiad 2019. The Spartakiad program included the Soccer Cup of the Chairman of the Management Board.

Volunteering

RusHydro Group’s corporate volunteering has been growing rapidly by attracting more and more engaged employees in events held across Russia. The volunteers greatly contribute to the Company’s annual initiatives, such as Charity Fair, Blood Donor’s Day, Suitcase of Goodness, The Brightest Christmas Tree, Get Ready for School, and oBEREGAi environmental program.

As part of the volunteering and charitable Young Energy program, the Group’s employees facilitate social integration and provide professional guidance for children from orphanages. The volunteers mentor the kids, introducing them to power facilities and energy sector, giving them the basic knowledge of electrical installations, and offering career guidance. The Young Energy covers twelve orphanages and involves over 120 volunteers from RusHydro Group.

RusHydro’s employees also arrange tours of the Group’s facilities. In 2019, more than 4,000 tours were organized for students in an attempt to stir interest in engineering and energy sector professions among the youth.

Annually, RusHydro’s volunteers come to schools from across the Company’s footprint to give over 15,000 schoolchildren lessons about energy saving technologies and energy security.

Suitcase of Goodness 2019

The Suitcase of Goodness is a charity project popular among volunteers from RusHydro Group. The initiative is focused on giving a helping hand to people in distress, including children with serious health conditions and lonely seniors placed in care homes or shelters.

In 2019, employees of RusHydro’s Headquarters, the Company’s design institutes — NIIES and Hydroproject Institutes, Hydroremont-VCC and RESK united their efforts to contribute to the Suitcase of Goodness.

The volunteers partnered the Gift of Life foundation to provide suitcases of goodness full of toys for kids battling cancer at Dmitry Rogachev National Medical Research Center of Pediatric Hematology, Oncology, and Immunology.

In the run-up to the new school year, suitcases of goodness with stationery were presented to children in need.

Employees of RusHydro Group collected gifts to cater for the basic needs of lonely elderly people from remote care homes and shelters under custody of the Joy in Old Age Foundation.

The Suitcase of Goodness initiative was acclaimed by many employees eager to help others.

At RusHydro Group, employees are free to fully exercise their right to freedom of association. Most of RusHydro Group’s companies have trade unions in place. In 2019, 34,239 employees of RusHydro Group (49% of the headcount) were members of trade unions. [407−1]

All of RusHydro Group’s generation branches and 40 subsidiaries (96% as at 2019) have collective bargaining agreements in place. [102−41]

RusHydro and its 12 subsidiaries are members of the All-Russian Industry Association of Electrical Power Industry Employers “ERA of Russia”, while one more subsidiary has joined the Industry Tariff Agreement for the Electrical Power Industry of the Russian Federation.

The Industry Tariff Agreement is crucial for establishing and developing a uniform social partnership framework in the energy sector. The Agreement provides a single standard for regulating social and labor relations in the industry and sets a minimum level of guarantees for employees. All companies that are “ERA of Russia” members comply with the key provisions of the Industry Tariff Agreement pertaining to:

• the amount and frequency of indexation of the minimum monthly rate of pay;
• one-off payments made prior to a paid leave;
• financial assistance provided in the face of certain events (marriage, childbirth, death of close relatives);
• one-off payments to retiring employees;
• compensation to families in cases of work-related fatalities and deaths caused by common diseases or home accidents; and
• other benefits provided for by the Industry Tariff Agreement if the company is financially able to make the payments (50% discount of the regular charge for electricity and heat, compensation of childcare expenses, monthly compensation payments to employees on childcare leave, etc.).

RusHydro provides employee benefits and guarantees that are higher than those set forth in the Industry Tariff Agreement in terms of both scope and amounts paid.

The Company complies with the Russian Labor Code specifying the minimum notice period regarding operational changes (at least two months prior to the commencement of relevant events or, where the headcount or staff reduction may result in mass dismissals, at least three month prior to the commencement of relevant events). [402−1]

In addition, under the Industry Tariff Agreement, employers must notify trade unions of the expected reorganization within 20 days after the meeting of shareholders adopts relevant resolution, and disclose the schedule of such reorganization. Under collective bargaining agreements of branches and subsidiaries, appropriate provisions of the Industry Tariff Agreement apply to reorganization, and either party may initiate mutual employment consultations.

Workplace safety management framework месте [103−2] [403−1]

As RusHydro Group prioritizes health and safety over operating performance, its key occupational safety goals are:

• protecting the life and health of employees in the workplace;
• preventing occupational injuries and diseases;
• creating safe employee behavior patterns and hazard prevention skills;
• improving working conditions on an ongoing basis.

The key areas, directives, and commitments regarding employee safety are set forth in RusHydro Group’s Health and Safety Policy*. The Company also has the following internal regulations in place:

• Regulations on Occupational and Fire Safety Day at RusHydro’s branches*;
• Temporary Regulations for Authorization of Building and Fitting Contractors and Seconded Staff to Operate at RusHydro’s Sites*;
• other regulations governing RusHydro’s production operations and processes*.

RusHydro Group’s occupational health and safety management framework covers management decisions on organizational, technical, sanitary and hygienic, treatment and preventive, medical and social measures aimed at ensuring safety, protection of employee capability, health and life in the workplace, monitoring of employee compliance with occupational safety, fire prevention and industrial safety requirements.

In RusHydro Group, there are no instances of unfair treatment as a result of health condition. No health condition data (personal data) are disclosed to third parties. [403−3]

To control and monitor contractors and subcontractors operating at its facilities, RusHydro Group:

• collects data on their employees for granting access to the facilities;
• holds health and safety briefings (including fire safety and safe work practices) for contractors' employees;
• assesses the knowledge of employees authorised to issue instructions and requests, manage and supervise operations; prepares regulatory documents for them;
• develops and implements corrective actions based on the monitoring of contractors' operations. [OS].

Plans to improve the H&S management framework

The 2020 calendar plan provides for the following initiatives:

• update the Health and Safety Policy in line with the risk-based approach;
• actively engage employees in occupational health and safety improvements to boost performance and reduce occupational diseases and workplace accidents;
• maintain strong employee competencies, leverage innovative health and safety practices, ensure collaboration and exchange of information between health and safety experts and employees;
• develop and implement effective initiatives to identify, eliminate or limit hazards and risks and preserve employee life and health throughout the employment period.

Health and safety expenses

The Company consistently provides funding for health and safety and workplace injury prevention initiatives, including RUB 2,464.7 mn invested during the reporting period.

Health and safety expenses, RUB mn

Health and safety expenses in 2019, %

Higher health and safety expenses are due to an increased supply of personal protective equipment for employees and measures to improve labor conditions and prevent occupational diseases and workplace accidents.