Salaries in the iron and steel complex returned to the pre-war level

This year, companies in the industry are financially encouraging their employees in various ways

The Ukrainian iron and steel complex is an export-oriented branch of the Ukrainian economy, which was probably the most affected by the large-scale military aggression of the Russian Federation. Temporary occupation of territories, physical destruction of production assets, blockade of sea trade, mobilization measures, restriction of energy supply, and now also water supply to individual enterprises, had an extremely negative impact on the indicators of the industry. Since the beginning of the war and until today, most enterprises have been operating with negative or close to zero profitability. At the same time, they also widely support the Armed Forces in order to accelerate our victory, because without this, everything else loses its meaning. Of course, such a difficult situation affected the employees of the industry, in particular, in the issue of salaries.

«In order to preserve the production potential and the labor teams, the HR services of the enterprises were forced to apply a set of stabilization measures within the limits of the current legislation, aimed at optimizing costs (transfer of part of the employees to idle time or to other work, suspension of labor relations, suspension of certain provisions of collective agreements, retraining of employees new or related professions, etc.). Such measures in one way or another concern the vast majority of employees. At the same time, the salary is paid on time. Workers injured by shelling are provided targeted support for housing restoration and treatment, assistance is provided to mobilized workers, injured as a result of military operations and the families of the dead,» says Serhiy Bilenky, head of the Federation of steelmakers of Ukraine (FSU).

Salaries in the industry

According to Serhiy Bilenky, for January 2022 (before the start of Russia’s large-scale aggression), the average salary at FSU enterprises amounted to UAH 22.14 thousand. For May 2023, this indicator was at the level of UAH 22.13 thousand. That is, nominal salaries have actually already caught up to the pre-war level.

Thus, salaries at iron and steel sector of Ukraine significantly exceed the average in Ukraine and, in particular, in industry. According to official statistics, for 2022 the average salary in Ukraine was 14.85 thousand UAH, in industry – 15.2 thousand UAH.

«Now we are working on gradually compensating employees for the inflationary depreciation of salaries. We are sincerely grateful to those workers and their representatives – trade unions, who are sympathetic to the temporary stabilization measures listed above, thanks to which it was possible to preserve the industry and jobs even during the war. We are trying to preserve the labor collectives, especially highly qualified workers, who will be impossible to replace after our victory and the restoration of pre-war production volumes, at least in the short term,» emphasizes the head of the FSU.

That is, despite the war and the difficult situation in the industry, the companies of the mining and steel complex take care of the preservation of collectives and the financial motivation of their employees. So let’s look at the situation with wages in the conditions of war at the largest enterprises of the steel complex of Ukraine.

Metinvest

According to the Metinvest group, despite the logistical problems caused by the war and the blocking of ports by the aggressor, which caused a decrease in production volumes, the company managed to keep the average salary at the level of UAH 22,000.

Moreover, since June 1, Metinvest introduced additional premium for employees of their production and repair assets. Its size can reach 25% or more of the salary, depending on the level of performance of the set tasks by the team. This form of payment will make it possible to increase production efficiency, and for employees to increase their income thanks to teamwork. Employees who achieve the specified indicators will be able to receive the first bonus at the end of July.

«For the Group, employees are always the priority. We understand how important it is to support them and their families during the war. And we are grateful to everyone for their hard work and dedication. I am sure that teamwork and a focus on a common result will help all of us to overcome this extremely difficult period with dignity», emphasizes Tatyana Petruk, director of sustainable development and interaction with Metinvest staff.

Ferrexpo

Despite all the troubles caused by the war, the Ferrexpo company paid off additional incentive in the amount of the average planned monthly salary for all employees based on the results of their work in 2022.

«Although the company worked in extremely difficult wartime conditions, we managed to maintain a decent level of remuneration for our employees. In addition, in January 2023, in order to preserve the financial stability of the employees, each of them received an annual incentive based on the results of their work in 2022», says Anna Adom, Ferrexpo director of personnel and household management.

During the past year, the company kept the average salary, and only at the end of 2022, it transferred part of the employees to a simple 2/3 salary. Average salary at Ferrexpo as of 2022 made up 21.4 thousand UAH, which is 41% higher than the average salary in the industry of Ukraine (15.2 thousand UAH).

Also, in the first half of the year, the company conducted a personnel assessment and changed the size of the recommended staff share by type of assessment, which provided for the establishment of an allowance for work results. Therefore, in 2022, 30% more employees received the bonus compared to the previous year.

«Thanks to these measures, we managed to maintain a competitive level of remuneration for our employees throughout 2022,» emphasizes the director of personnel management and household affairs of Ferrexpo.

The company also developed a strategy to create new highly professional and multifunctional workplaces. Training in additional and related professions is conducted on the basis of the Technical Expertise Center, which allows workers to work more efficiently, and the company to be more flexible in the case of internal personnel replacement.

«Training is conducted online and offline, and simulators with augmented reality are used to practice the correct sequence of actions for certain types of work», emphasizes Anna Adom.

In December 2022, Ferrexpo opened a qualification center for the assessment of knowledge and competences in accordance with the requirements of the professional standard and the assignment of professional qualifications, which gives more flexibility in the internal transfer of employees to open positions.

Interpipe

Starting from March 1, 2023, the Interpipe company increased salaries for all categories of employees by an average of 15%. The increase will apply to workers at factories in Dnipro, Nikopol and Novomoskovsk. In addition, the company increased the salaries of line managers in production, as well as engineers, specialists and managers of the company’s Ukrainian office.

«We have been living and working in full-scale war conditions for almost a year. The company faced such difficulties in logistics and production support for the first time. However, Interpipe made maximum efforts to rebuild the work. We managed to preserve our positions on the export markets, we continue to work now. In order to support the workers and their families, the company decided to raise wages from March 1, despite the war. We continue to hold the economic front!» says Andriy Korotkov, CEO of Interpipe.

Lack of personnel

Taking into account the temporarily occupied and front-line territories, the number of workers at FSU enterprises decreased by 41% since the beginning of the war, from more than 126,000 people to 75,000 people. If we count only the enterprises that continue to work, then the reduction in the number was about 20%, a large part of which are employees mobilized to the Armed Forces.

Despite the war, there is even a lack of personnel at iron and steel enterprises due to the mobilization of some employees to the ranks of the Armed Forces and territarial defense, travel abroad and other reasons. In such cases, companies try to close vacancies with the help of internal transfers and retraining of personnel, or by external search for employees.

«The problem of lack of personnel is quite acute. First, mobilization. Its necessity is clear, but it is extremely difficult to replace the industry workers who are currently protecting the country from the aggressor. Especially when it comes to highly qualified specialists. Secondly, workers who became internally displaced persons and relocated with their families to safer regions of Ukraine. And the last thing is the problem of staffing of enterprises located relatively close to areas where active hostilities are taking place. As you can see, all of the above are direct consequences of Russia’s military aggression,» summarizes Serhiy Bilenky.