Managing our human resources
In 2014, AngloGold Ashanti employed – on average – 58,057 people (43,073 permanent employees and 14,984 contractors).
Our employees are key stakeholders in our business. We recognise that the sustainability of our business includes/encompasses on our providing wages, benefits, working conditions and development opportunities that will attract and retain the right people with the right skills.
It is one of our core values to treat each other with dignity and respect, believing that individuals who are treated in such a way respond by giving of their best, which in turn creates both personal and organisational advantages. To achieve this we seek to ensure that employees are placed in appropriate roles and are equipped with the right skills and the means to deliver on goals, as entrenched in the System for People and the group’s business strategy.
In 2014, AngloGold Ashanti employed on average 58,057 people (43,073 permanent employees and 14,984 contractors) (2013: 66,434 people; 48,159 permanent employees and 18,275 contractors). The dramatic decline in the gold price has led to a change in our business approach and business model with our business strategy aimed at improving the generation of sustainable free cash flow and returns by focusing on five key business objectives, namely: people, safety and sustainability; ensuring financial flexibility; actively managing all expenditures; improving the quality of the portfolio; and maintaining long-term optionality. This required some refocusing on core business and costs, and the restructuring of operations.
We embarked on cost improvements at every level of our business. In re-basing our company, we started at the top of the organisation – rationalising management structures and removing unnecessary intermediaries and layers.
The greatest impact has been at our corporate offices across the group, in the South Africa and Continental Africa regions. In consultation with employees, an organisational design review was conducted and completed at corporate head office and the Continental Africa region’s office and certain regional and organisational structures located outside of these, aimed at reducing unnecessary costs by, inter alia:
- Potentially removing any duplicated roles and accountabilities
- Potentially eliminating activities that do not provide sufficient value to the business
- Enhancing cross-functional and divisional activity co-ordination and effectiveness
Employee wages and benefits make up a significant component of our cost base amounting to 39% in 2014 (39% in 2013). In 2014, payments to employees of wages and benefits amounted to $1,588m (2013: $1,593m).
As part of the P500 initiatives to reduce costs across all operations, all labour plans and productivity improvement initiatives have been reviewed. New labour modules based on ideal structures per discipline and utilising analytics on skills profiles and other demographic factors are being developed, and tested on several mines in the Continental Africa, Americas and Australasian regions. The interim results of this exercise were presented to the Remuneration Committee in August 2014 and work is continuing on the practical implementation of the revised labour plans.
Our System for People (SP) which provides leadership and supporting management processes has helped us ensure employees are placed in the right roles, with clearly defined responsibilities, so that they are able to deliver against our goals.
During 2014, we focused on further integrating the principles governing the SP into our human resources practices at all levels. These principles reinforce the central role of people in achieving our business objectives and the value we place on treating one another with dignity and respect.
Our aim was to simplify our human resources approach, translating it into practical action which could be easily applied, which emphasised engagement focusing on relationships and interaction at all levels of the business and which harnessed technology to improve and streamline people management functions.
Improving engagement processes with all stakeholders has been identified as a key component of our sustainability strategy and employees are no exception. Several key employee engagement initiatives were undertaken in 2014, including a group-wide survey and a series of ‘town hall’ meetings with the CEO in the South Africa region.
AngloGold Ashanti’s operations span many different regions in a broad range of countries and, in line with our values, we are committed to creating and preserving diversity in our workplaces.
During 2014, to emphasise and embed the diversity initiatives, a transformation policy was put in place at a group level with the following objectives:
- To create an underlying all-inclusive culture based on shared values
- To put in place the necessary corporate policies and to ensure legislative compliance in promoting transformation
- To put in place targeted initiatives to address regional transformation imperatives, for example, initiatives on issues such as equity ownership and employment equity that are relevant in the South African regulatory context and localisation programmes in Continental Africa.
Initiatives focusing on increasing local employment and skills development are addressed in the context of the group’s transformation policy.
In the South African context, the five-year targets for the Mining Charter were met, and this was achieved through the appropriate talent management initiatives.
TALENT MANAGEMENT AND CAREER DEVELOPMENT
Talent management is embedded in the group’s human resources policies, which allocate specific roles for mentoring and career development through the organisational structure. Career development is undertaken in alignment with personal development objectives, which in turn are consistently with company’s business needs and strategy.
Given the corporate restructuring undertaken to reduce labour overheads at the corporate office during 2013 and 2014, there was little scope for talent acquisition. However, much emphasis was placed on succession planning to retain talent and develop employees for more senior roles.
Succession plans for the senior and executive levels of the organisation were prepared and presented to the board in November 2014. These plans were developed to address skills gaps and transformation targets, by putting together individual development plans for each employee.
An extensive succession planning and talent pool review exercise was carried out in 2014 and a full set of talent profiles for the extended talent pool was presented to the board in February. Analytics were developed to report cover ratio and other turnover stats.
The CEO conducted one-on-one discussions with all Executive Committee members and his subordinates once-removed (SORs). In line with this initiative all Executive Vice Presidents assisted by their regional HR heads conducted talent discussions with all senior staff, and this will be cascaded to all levels in 2015. The Long Term Incentive Plan (LTIP) metrics have been revised to include succession and talent retention measures.
In addition, a development model for growing future general managers was finalised and the Chairman’s Young Leaders Programme was initiated. This programme will see top technical talent receiving executive and top management mentoring while they are exposed to multi-disciplinary projects across our operations internationally, including exchange placements for exposure in the different regions.
PERFORMANCE MANAGEMENT AND CAPACITY DEVELOPMENT
In line with our aim to harness technology so as to improve and streamline our people management systems, a new online performance system is currently being introduced. It was rolled out at the AngloGold Ashanti corporate office in January 2014, prior to its global implementation during 2015, when it will replace legacy or paper-based systems in all regions.
Some of the benefits we believe will arise from the implementation of the online system are:
- Enhanced strategic alignment – a common understanding of the organisation’s goals and how each employee’s work contributes towards the achievement of these common objectives
- Reduced role ambiguity – clarity regarding the accountabilities of each employee’s role and a focus on meeting specific performance expectations
- Increased communication and engagement – with managers offering regular feedback to subordinates and providing opportunities for them to share their views on how their work is carried out
- Improved performance and results – as subordinates are coached by their respective managers to help them identify ways to improve their own performance as well as the output of the team
- Better retention – increasing engagement levels as effective performers are recognised and rewarded for their contribution to organisational performance
This new performance management system will enable a more focused approach to development plans, and the implementation of learning and development activities to address specific developmental needs.
LABOUR AND HUMAN RIGHTS
We respect fundamental labour rights, including the right to organise and collective bargaining. With the exception of Australia and the United States, where collective bargaining is not common in the resources sector, collective bargaining structures are in place at all operations.
In South Africa in particular, collective bargaining is a significant feature of our socio-economic landscape, and initiatives to sustain and strengthen our collective bargaining structures have been a priority during the year – see Stakeholder engagement and materiality.
In 2014, we continued to implement the UN Guiding Principles on Business and Human Rights to meet our obligations to respect human rights throughout our activities and in our business relationships. In line with that commitment, we undertook to implement the three key requirements set out in the Guiding Principles, namely:
- development of a strong human rights framework anchored around a human rights policy
- establishment of a process of human rights due diligence which is embedded in our business processes and risk management framework
- establishment of operational level grievance mechanisms to address and manage community complaints and grievances effectively