UPM annual report 2015

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UPM Annual Report 2015 UPM Annual Report 2015 39 40
contents
IN BRIEF STRATEGY BUSINESSES STAKEHOLDERS GOVERNANCE ACCOUNTS
Investing in leadership
Due to the age structure at UPM’s Finnish
mills, dozens of managers will retire over
the next ten years. Compared to future
needs, degree programmes in technology
include very few courses on leadership,
which is why there is a clear demand for
a tailored apprenticeship-based training
programme that will prepare employees
for managerial duties.
UPM’s apprenticeship-based training
programme for managers is one example
of UPM’s investments in leadership. A total
of 350 people applied for the programme,
and ten applicants were selected to begin
their studies in February 2016. The 18-month
programme will consist of classroom
teaching (10%) and practical work (90%) that
participants will carry out at various UPM
locations in Finland.
The selected trainees already have a relevant
degree and some work experience. The
tailored training programme focuses on
leadership skills and UPM’s way of working.
UPM has good experiences of apprenticeship-
based training programmes as the Future
Professional training programme launched
in 2014 was a success.
Production managers today and in the future
must have the ability to lead and motivate
employees in everyday work. A profound
understanding of strategy and business
targets is also needed. Once the participants
have completed the programme, their
employment opportunities at UPM pulp and
paper mills and within the sawmill and
plywood business will be examined.
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Female
20%
20%
20%
80%
80%
80%
97%
60%
61%
62%
38%
39%
40%
13%
12% 12%
87%
88% 88%
3%
3%
3%
97%
97%
Male
Part time
Full time
Shop-floor
Salaried
Fixed term
Permanent 1)
1) No contract end date,
incl. US employees at
Will classi cation
upm PERSONNEL in figures
2015 2014 2013
Turnover % 10.5 10.9 12.5
Turnover% (voluntary) 3.3 4.8 5.5
Average age of personnel 43.6 43.7 43.4
People development
Average training hours1)
(hours employee) 14 15 15
OHS figures, UPM workforce
Lost-time accident frequency 3.9 4.4 5.4
Total recordable injury frequency 10.6 11.6 13.5
Absenteeism % 3.7 3.4 3.4
Number of occupational diseases 6 n/a n/a
OHS figures, contractors
Lost-time accident frequency 5.5 6.5 n/a
1) Reflects active employees
2013 20,950
2014 20,414
2015 19,578
Number of employees in total
Approximately 600 employees are covered
by the plans launched in 2011 and run on an
annual basis. Under both plans, shares can
be earned based on either group or business
area-level performance. More information
about long-term incentives can be found in
the Remuneration Statement on www.upm.
com in the Investors section under Govern-
ance.
UPM promotes active participation
At the end of 2015, UPMhad 19,578 employ-
ees working in 45 countries. UPMpromotes
local leadership at the main production sites
where 94% of management team positions
are held by locals. Overall at UPM, approxi-
mately 0.3% of employees were on interna-
tional assignments at various levels of
organisation in foreign countries.
As a multinational company, UPM com-
plies with international, national and local
laws and regulations and respects interna-
tional agreements concerning human and
labour rights and freedom of association.
UPM abides by legally binding collective
agreements. UPM does not collect informa-
tion on or report on its employees’ union
membership at a global level due to differ-
ences in national legislation in the various
countries. The estimated percentage of
active employees covered by collective
agreement mechanisms was 74% in 2015.
UPMpromotes active employee partici-
pation and consultation, organised in
accordance with international and national
rules and regulations. UPM respects the
privacy of employees and promotes equal
opportunities and objectivity in employ-
ment and career development.
To enhance open international dialogue,
UPMhas a co-operative body, The UPM
European Forum, which focuses on issues
related to changes within the company
and the business environment in general.
The forum organises regular meetings for
employee representatives from business
units operating in Europe.
Supporting re-employment
The central elements of UPM’s activities on
permanently closed sites and in restructur-
ing typically are retraining, re-employment
and relocation within the company, support-
ing entrepreneurship as well as severance
payments. Active measures promoting
employment and retraining are carried out
in close co-operation with various authori-
ties and other third parties.
In restructuring situations, UPM follows
the local labour laws. In Finland, the mini-
mum notice period is determined in The
Finnish Employment Contract Act and
collective agreements, based on the length
of employment: employment from one year
to 12 years, notice period is 14 days and after
12 years six months.
Similarly in Germany, the minimum
notice period is determined by German Civil
Code and adhered to by collective agree-
ment. It is calculated by the length of
employment: from up to 20 years, notice
period accordingly from four weeks to seven
Bringing teenagers back
to school
Due to lack of opportunities and long
distances, some children living in the rural
areas of Uruguay leave school at 12 years
old. The early exit will weaken their
opportunities to continue education later
and makes it difficult for them to enter into
professions that require a higher degree
or special vocational training.
To tackle the problem, the UPM Foundation
has launched a project with the Technical
University of Uruguay (UTU) to organise
secondary level studies with an emphasis
on mechatronics in Fray Bentos.
“We are organising a basic course that will
prepare these young students for repairing
and maintaining machines used in
agriculture and forestry,” explains Rodolfo
Merello, director responsible for regional
technical education from UTU.
“In the first year they will concentrate on
general subjects and then they will pursue
more detailed technical studies during
the second year. In addition to concluding
the current course, we are also planning
to organise a new course for the next
generation in the coming year.”
Furthermore, the UPM Foundation provides
necessary tools through the practical
training in the course. In the second phase
there will also be technical experts like
harvester operators from UPM working
as teachers.
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months. In China the minimum notice
period is 30 days and is described in local
legislation.
As part of the profit improvement pro-
gramme, launched in November 2014, UPM
permanently reduced its publication paper
production capacity in Europe by approxi-
mately 800,000 tonnes in Q1-Q2 2015.
Newsprint machines at UPM Shotton in the
UK and at UPMChapelle Darblay in France,
and magazine paper machines at UPM Jämsä
River Mills in Finland and at UPMKaukas
in Finland were permanently shut down.
As planned, UPM also centralised its Supply
Chain operations in Paper ENA (Europe and
North America) fromTampere in Finland
and Altrincham in the UK to Augsburg and
Dörpen in Germany. Personnel was reduced
by approximately 500 people by the end
of 2015, as planned.