Vassiliko Cement Works, Cyprus: Flexible working practices/Training and development
A stay on recruitment and the modernisation of production at Vassiliko Cement Works led the company to invest in its older workforce through continuous training and the development of labour force flexibility.
Vassiliko Cement Works is a long-established cement manufacturing public company, listed on the Stock Exchange. Currently, it employs 205 people. The average length of service is 21-22 years and 52% of the workforce consists of people aged 50-60, with the majority of employees being men. Wages are 20% higher than in the general market. There is virtually zero turnover of staff. The major production unit and company port is near Lemessol and nearly all employees work there.
There was a major reorganisation of production in 1991, with expert input from the Italian company, Italcementi, which is now a part-owner. This changed the industry from manual to automated production and allowed Vassiliko Cement Works to remain internationally competitive with its exports. At that time, 310 people were employed. As they reached pensionable age, workers left, with good exit packages, and the company also ceased hiring new personnel. The past 2-3 years has seen some hiring, reflecting the company’s expansion and new subsidiaries.
The constant introduction of new technologies has meant a substantive programme of training and retraining within the company, using the Cyprus Productivity Centre and staff exchanges. The key to the success of the company is in the large task flexibility among the staff, the annual evaluation of each individual employee and their needs and desires for training and promotion with appropriate feedback, and the use of team feedback. The corporate culture is that of a responsible employer, with attention paid to individuals as well as to their communities since many employees live nearby and are affected by the works. The company engages in extensive dialogue with the major trades unions and has a positive working relationship with them.
Good practice today
The past decade has seen continuous technical innovations and a stay on recruitment in the company. The high costs of hiring and training new personnel (e.g. 6 months is needed for an average semi-skilled person and 2-3 years for a skilled specialist mechanic) steered the company towards a preference for retraining existing personnel. Over half the workforce (52%) is aged 50-60 and the company perceives these older workers as part of its assets in terms of their knowledge of the industry and commitment to the company. This has led to a systematic and extensive programme of training and retraining for all employees (1,035 hours in 2005 in in-house training, 318 hours in external training, with a total of 3,600 hours spent on all staff training). The company runs training seminars internally with the help of the Cyprus Productivity Centre. The extensive system of training is associated with career management and advice to employees on how to improve their performance and obtain promotion at all ages. It has also created a ‘learning’ culture.
The fact that so many workers will be leaving the company in the next decade and the need for personnel in the new subsidiaries has led to some hiring of younger workers although age is not put in advertisements and age discrimination is illegal. (Older workers do not apply because the basic wage given is 1,120 euro per month.) There are many applicants for the jobs because of the wages and fringe benefits, including a pension programme, good holiday time (up to 5 weeks) and days off, the number increasing with years of service. New appointees start in manual labour (e.g. general labourers, cleaners, loading in port, assistant operators in shift work). Career development occurs as positions become vacant and workers are promoted. Increasing mechanisation has reduced some of the health problems associated with manual labour in this industry (such as bad backs) and this has enabled older workers to stay on in work.
Work is normally organised in shifts for continuous mechanised production in teams of 10 people, which, given the age structure of the labour force, always contain a large percentage of older workers. 25% of the workforce are employed on these shifts. All work teams in all sections of the company are asked to report back regularly, to provide new ideas to improve production and are generally encouraged to identify with the company’s success. Meetings take place 5-6 times a year formally to evaluate the workers' reports and suggestions, and minutes are kept of these meetings. Older workers are important in providing experience for assessment and feedback, and there is horizontal cooperation between teams through line managers, which is facilitated by the existing social relations among older workers. Each idea is examined and implemented or studied, and there is feedback to the teams. The open communications between management and workers is made easier by the extensive knowledge the older employees have of the management. Good ideas are rewarded with prizes, such as a weekend break in a hotel.
There are collective agreements with the three trade unions involved (reflecting the three main political parties). Although there is an arrangement by which the company and trade union officials can meet each month, on the whole they do not. The trade union secretary comes weekly to see management and if there are problems he visits the HR office. Unless the issue is very serious, workers tend to bring their problems directly to management. All negotiation is direct. Trade union personnel are workers who are promoted internally and are often older workers. The company pays more than the market rate to its employees, plus bonuses. While levels of wages are not tied to jobs, wage increases are awarded if the worker shows himself to be good, with approximately 10%-17% of employees getting awards in line with improvements in their knowledge and performance. This provides an incentive for older workers to participate in training. Usually, all employees receive one increase and there is a further increase after 3 years of service (4% of wages), 5 years, etc. But there has to be recognised improvement, otherwise the rise is not awarded. Again, this provides a strong incentive for older workers to continue to try and improve their knowledge.
Traditionally a male sector of employment, women are now being hired in this cement manufacturing company. Three women were recently employed in the works and in the offices. For part-time or periodic work, outside contractors are used (e.g. for the general overhaul of machinery).
Health issues are dealt with through a company doctor. This is particularly important in protecting the health of older workers. The doctor also helps in the local communities. There is special private health insurance for workers and their families. The company is concerned with improving the whole work environment. A Safety Committee has been established and older workers, with their considerable experience of dangers and potential dangers, play a significant role in its deliberations. In cases of illness, wages are covered for 6 months, with a further 6 months on half-pay with social insurance payments, which can cover a year. Such situations may arise with heart conditions, a complaint that tends to affect some older workers. In addition, there is a special pension fund of an extra 16% from the company on top of the national pension, which is a real incentive for older workers to remain with the company.
In the case of death, payments are made to the family of the deceased. In cases of accidents, not only is the regular amount paid under an employer’s liability, but also extra payments are arranged for the family. In the case of poor health, a phenomenon slightly more likely among the older workers, individuals can discuss reassignment to other jobs with the HR department and trade unions; for example, if an employee has a heart problem, he can be redeployed to the machine shop, where the work is less physically strained.
Given the team nature of the work, cooperation between workers on the same shift or in the same team is high. Older workers act as mentors to the younger ones, providing them with demonstrations of certain skills and knowledge of the industry, sometimes taking on the role of trainers in the company's internal programmes.
There is a good, positive atmosphere in the Vassiliko Cement Works. The company shows its appreciation of ex-workers on Feast Days, when pensioners are invited to participate in the company's festivities. Their contribution is valued and, indeed, some pensioners are occasionally asked by the company to work when extra hands are needed in a big or important project.
Vassiliko Company has as its major shareholders the Hellenic Mining Co. (33%) and Italcementi Co. (33%), with the remainder owned by private investors. It has an annual turnover of 40 million Cyprus pounds. The major cost in production (50%) is energy rather than wages (25%).
Contact: George Kounnis, Supervisor, Human Resources Department
George Sideris, Director, General Manager