The well-being and safety of our employees, clients, suppliers, subcontractors and the general public is paramount and directly impacts on the commercial viability of our business.
People are our most important asset and we believe that everyone has a fundamental right to a safe working environment. It is our duty to respect and foster that right. This is why we take measurable steps to continuously improve our safety practices and processes.
Our board continues to ensure the importance and significance of social, environmental, ethical and health and safety matters for the Group. Our health and safety performance can determine our strength as a business, not in isolation but one that defines our success in all areas of the business.
Thus a comprehensive risk management and internal control process is in place, supported by a corporate social responsibility ('CSR') and sustainability committee.
Stop for a moment
Look at your work area
Anticipate what could go wrong
Manage your work safely
Do the safe thing
Safety, health and environment
As many of our activities remain potentially dangerous we have continued, and will continue, to embed our 'safety first' value within all areas of the business. Thus ensuring safety, health and environment remains a fundamental aspect of the business and everyone's role.
We have not only achieved recurring accreditations to ISO 14001 and 18001 but have also become first in our industry to become accredited to the newly revised ISO 14001 standard.
The current year accident frequency rate ('AFR') of 0.24 includes an AFR of 0.42 for our UK operations. This shows a small improvement compared to the previous year's AFR of 0.44. In 2017, we had 16 RIDDORS compared to 17 RIDDORS in 2016 which is reflected in the lower AFR results. We have analysed underlying trends and will be focusing our efforts on addressing the issues to make further significant improvements in conjunction with a clear strategic approach.
In the current year we have introduced a SHE strategy that both underpins and supports the cultural change within the business and gives clear direction and focus with four strategic goals (pillars):
- A fair and safe way of working
- No incidents that harm people
- Industry-leading occupational health
- Carbon footprint reduction
These strategic goals (see later for further details) will be enablers to continuously improve the culture going forward year-on-year with respect to health, safety and the environment with clear communication and links across all levels of the business (see below).
We have continued to develop and refresh a number of initiatives started in the previous years including near miss reporting, improved communications, directors' site visits and the behavioural safety programme, which has resulted in a clear step change in the SHE culture within the business. This has been visibly communicated during newly introduced safety stand-downs and feedback sessions across the business.
We will continue to concentrate on improving our AFR performance in 2018 and we believe that our focus on the strategic goals will deliver the performance we desire.
A fair and safe way of working
Leadership, communication and engagement, alongside a robust training programme, will ensure that the safety culture within the business continues to evolve and improve, positively impacting the working environment and reducing the harm to our people.
The format for the directors' tours has been revised from an audit style to an engagement style visit. This ensures interaction and communication across the business at all levels and shows clear commitment and leadership.
The process of recording incidents, tracking actions, reviewing and focusing of topics is being further developed to underpin and support the strategy and thus improve working practices. This will also assist in deeper analysis of where our key issues are within the business.
No incidents that harm people
We have continued to improve the conditions of the yards in all of our factories alongside engaging with our clients to improve site conditions and working areas. Ongoing improvement to material stability is also a continuing project.
We are establishing a new welfare facility at Lostock which will substantially improve the environment for our employees.
Accident and investigation training has been a focus across the disciplines within the year to ensure root causes are clearly identified and actioned to prevent further occurrences. We have extended investigation from accidents to near misses with a high potential for harm to further highlight preventative measures.
Our directors' site tours continued to be fully supported and actioned with 118 being undertaken during the year. These gave our people the opportunity to discuss local issues and make suggestions for improvement.
We have undertaken over 3,000 man-days of SHE training in the year. This includes over 30 different courses. Examples are: NEBOSH certificate; slinger/signaller; first aid; portable magnet use; one-to-one coaching; and reversing vehicles. A mandatory training matrix has also been implemented as part of a KPI target in addition to the development of our apprenticeship programmes with the learning and development team. In 2017, the average number of training days per employee was 2.3 (2016: 1.1).
Industry-leading occupational health
We have continued to proactively assess our occupational health provision and management to mitigate risk to our people and our business. Both a support and prevention model has been in place to support the business going forward.
We will continue to develop our health risk management to ensure it is robust and effectively designed to reduce healthcare costs, increase productivity, reduce absenteeism, enhance employee morale, attract and retain high-quality employees and create a positive return on investment.
The Severfield Foundation has linked with the charity, Prostate Cancer UK, in addition to becoming a member of the Health in Construction Leadership Group and also Mates in Mind which is a charitable programme that aims to raise awareness and understanding of poor mental health in the construction sector.
Steel is increasingly seen as the most sustainable of the major structural materials. It has various sustainability benefits, such as low waste, flexibility, off-site manufacture, speed, resource efficiency, adaptability, demountability, long lasting appeal, safety, reusability and recyclability. These inherent characteristics result in many social, environmental and economic benefits to satisfy sustainability's 'triple bottom line' and circular economy.
In the year we have continued to develop the terms of reference for our sustainability committee. The agreed set of targets and objectives being:
- Carbon reduction policy and strategy embedded in the SHE strategy
- Reduction in carbon intensity by 2021
- Waste reduction and diversion of waste from landfill
- Quarterly GHG reporting using shared database and validation of emissions
- Customer and supply chain engagement
- Staff engagement and internal performance reporting
- Sustainable procurement with accreditation to ISO 6001
We achieved a CDP Sustainability Scoring of B which is above average for the sector.
The recommendations from the previous ESOS report have been implemented which has resulted in a noticeable reduction of our carbon footprint. This has also reduced our climate change levy for the year which is aligned to the Dalton facility.
Further improvements and initiatives are planned to further reduce our environmental impact whilst also reducing costs to the business.
The Group maintains its environmental management system which is now certified to the revised ISO 14001. Information on our environmental impact is collated monthly and is reported to the board.
All our works and project sites operate in accordance with our sustainability policies. We track our sustainability performance on a project-by-project basis and, where required, report information to our clients.
Greenhouse gas emissions reporting
We have continued to report the Group's GHG emissions in accordance with UK regulations and the GHG Protocol Corporate Accounting and Reporting Standard methodology. Our reporting boundary remains all material Scope 1 and 2 emission sources within the boundaries of our consolidated financial statements. We have also monitored Scope 3 emissions associated with raw materials, waste, water, business travel and product transportation to which we will review the full reporting of Scope 3 for the 2018 financial year.
In 2017, we have again reduced our absolute total Scope 1 and 2 carbon emissions by 1 per cent from the previous year by continuing to focus on energy efficiency across the Group. Our intensity ratio per £m of revenue has also decreased from 45 to 41 which is a further 9 per cent reduction from the previous year. We will continue to review our carbon emissions going forward and assess any reduction programmes which will further reduce our carbon footprint where possible.
For the year ended 31 March 2017, the Group's global GHG emissions were as follows:
|Tonnes of CO2e|
|Scope 1 – combustion of fuel and operation of facilities||5,231||4,880|
|Scope 2 – electricity, heat, steam and cooling purchased for own use||5,390||5,853|
|Total CO2e emissions||10,621||10,733|
|Absolute tonnes equivalent CO2e per £m of revenue||41||45|
People are at the heart of our business and are vital to the success of our vision and the achievement of our strategic goals. Our aim is to create a great place to work in order that we can attract, recruit, retain and develop talented people who live and breathe our values at every level of our business to deliver our goals and customer commitments.
Our people strategy comprises five interconnected themes:
- Engage and perform
- Develop, grow and lead
- Reward and recognise
We will attract, recruit and retain the best and brightest talent
Our focus in 2017 has been on attracting, recruiting and retaining the best and brightest talent. During the year, we recruited 183 people across the Group, strengthening across a range of disciplines to further improve our commercial and project management procedures.
We are passionate about helping young people take their first step onto the construction career ladder, from school leavers experiencing the world of work for the first time, to graduates qualified in disciplines relevant to the construction sector. We believe that the recruitment and training of apprentices is fundamental to business development; another means of ensuring that we have all the desired skill bases available in the future.
During 2017, we recruited 39 apprentices/trainees (2016: 27) across the Group, having taken on at least ten apprentices each year since our dedicated apprenticeship programme launched in 2010. We have provided placements for trainee fabricators, steel erectors and other technical trainees and will continue to invest in apprenticeships during 2018 and beyond.
During the year, we recruited five graduates, reiterating our commitment to providing opportunities for undergraduates via work placements across a number of functions including business support, quantity surveying, design engineering, site management and project management.
In 2017 we supported a number of universities, colleges and schools with the provision of guest lectures and attendance at careers fairs. In the next year, we will continue to derive additional value from our strategic partnerships and explore opportunities for action learning, joint projects and secondments and at the same time publicise the benefits of a career within our industry sector.
As well as ensuring that we attract and recruit the best and brightest talent, we must also retain that talent. In 2017, voluntary labour turnover was 7.9 per cent. For 2018, we have targeted a 5.0 per cent reduction in voluntary labour turnover.
UPS Warehouse, Tilbury
This project is a new 400,000 square foot distribution facility for UPS at London Gateway Logistics Park and constitutes one of UPS's largest infrastructure investments outside of America. It is formed with four individual HUB buildings situated in a unique arrangement to suit the client's operational requirements. Severfield undertook the detailed design and co-ordination of the scheme as well as the fabrication and construction.
The complex roof structure and interfaces between the various HUB buildings provided the main challenge in the design together with the numerous strategically positioned columns to accommodate the vast number of entrances around the building elevations.
Severfield also provided other services and fixtures for the project, including metal decking to the offices and mezzanine and a number of steel stairways.
Full co-ordination with all stakeholders and the careful sequencing of the works were the key to the successful completion of this project.
Equal opportunities and diversity
We believe that equal opportunity means hiring and retaining the best people, developing them to their full potential and using their talents and resources to the full.
We are an equal opportunities employer and are committed to encouraging diversity and eliminating discrimination in both its role as an employer and as a provider of services. We aim to create a culture that respects and values each other's differences, that promotes dignity, equality and diversity and that encourages individuals to develop and maximise their true potential. We are committed, wherever practicable, to achieving and maintaining a workforce that broadly reflects the communities in which we operate.
Our policy is that recruitment, training, career development and promotion of disabled people should, as far as possible, be identical to that of other applicants and employees. In the event of an employee becoming disabled, every effort is made to ensure that their employment within the Company continues and that appropriate training is arranged where necessary.
During the year we worked with Women in Construction to provide opportunities for women to work on our construction sites and with a number of schools and colleges to encourage underrepresented groups to study STEM subjects.
Diversity will continue to be an area of focus in the year ahead, reflecting its importance to our business and to our clients.
Engage and perform
We will engage, coach and manage our people to give their best every day
In 2017, our employees took part in our employee engagement survey. The survey was undertaken on a divisional basis and we have compared the results to those of our first survey in 2015, providing us with valuable feedback to help us become a better employer.
We plan to undertake a further survey during 2018 and have set a target participation rate of 65 per cent. We will continue to use an external consultant to facilitate the survey and will compare our Group and individual business units against external benchmarks.
As part of our ongoing commitment to increasing employee engagement and following on from our survey, our marketing and communications team have carried out a complete review of internal communications across the Group. This has included further feedback opportunities for our employees, as well as creating and implementing new, more informative internal communications channels and messages suitable to all of our internal audience groups.
In 2016, we launched our first sharesave scheme ('SAYE'), to complement our existing Share Incentive Plans ('SIPs') and a third of our employees took up this opportunity at an average saving of £175 per month. Over 58 per cent of our employees are shareholders via these schemes. We were delighted at this level of participation and recognise this as a clear sign of our people being engaged with our business. We will continue to encourage our people to become shareholders and plan to launch our second SAYE in June 2017.
Develop, grow and lead
We will support our people to achieve excellent performance and continually develop their skills. We will continue to develop strong leaders and managers
In 2017 we continued to use our personal development review ('PDR') process. This process provides a focus on behaviours in line with our values as well as assessment of performance and identification of development needs. In the coming year, we plan to work with our leaders and managers to further develop the PDR process.
We have invested c.1.5 per cent of our payroll costs in learning and development activities. The main areas of focus were:
We identified the need to improve our management capability, particularly within our production teams, and put in place a modular training programme. Additional modules will be developed in 2018 including HR-focused sessions including how to recruit and select to meet our values.
We launched our ICE-accredited graduate programme which provides graduates from engineering and technical disciplines with the opportunity to work across all areas of our business and gain a broad understanding of the various disciplines. In addition to experiencing a wide range of projects, it enables them to acquire the skill sets required for chartered membership of the ICE. Wherever possible, we also provide our engineering graduates with external secondments to enable them to gain additional skills and experience.
We continued to develop our leadership capability and as part of this programme, we continued to roll out the 360 degree feedback process throughout our director population.
Participants in the process were assessed against our defined leadership characteristics and behaviours aligned with our values by their superiors, team members, customers and peers. This feedback has enabled directors to put together individually tailored development plans against which they are taking action. We will measure the impact of changes in leadership style by repeating the process at an appropriate point and through the 2017 staff engagement survey.
During the year, we held a forum with 25 of our senior leaders within the Group at which we re-enforced our leadership development priorities and focused on what is required to support our future leaders. We will continue to hold these leadership forums in 2018.
Succession and talent management
In order to protect the long-term success of our business we want to ensure that we understand our talent pipeline and support their development so that our people reach their full potential. In 2017 we conducted a full review of key roles within the business and have identified possible medium-term successors for these roles in the vast majority of cases. Action plans have been put in place for these people to ensure that any gaps in knowledge and experience are addressed on a priority basis to meet business needs.
We also took the opportunity to highlight emerging talent across business units to ensure consistency and visibility of talent and career opportunity. Our agility in deploying talent and experience to maximise opportunities through sharing knowledge across the Group is a key differentiator and one which we will continue to develop.
In 2017 we designed the Severfield Development Programme and have launched this in April 2017. This programme is sponsored by Ian Lawson and will provide opportunities for our emerging leaders to further develop their business skills, work across business units and fast track their development.
Reward and recognise
We will reward and recognise people who demonstrate our values and contribute to the achievement of our goals
Each of our businesses offers a competitive reward package and reviews salaries annually in line with market rates. Our focus is on cash and variable pay rather than fixed benefits and each division's reward package includes an annual Group profit performance-related bonus which encourages the achievement of our strategic objectives.
Our people are also eligible to participate in the Severfield plc pension scheme (defined contribution). Employees also have the option to make their own contributions through salary sacrifice. In 2017, we invited employee members of the pension scheme to apply to become employee nominated pension trustees, resulting in the appointment of three new employee trustees. We are working with our trustees to encourage greater engagement of our people in planning for retirement and general financial awareness.
We continue to facilitate a number of flexible benefits that enable our people to access programmes and savings that would not be available to them on an individual basis without additional cost to the Group. These include cycle to work, childcare and discount schemes.
Severfield is committed to being a living wage employer. All direct employees in the UK are paid above the UK living wage and all our London-based employees are paid in excess of the London living wage.
We recognise and reward the loyalty of our people and in 2017 three staff celebrated 25 years' service.
We will promote health and well-being to our people
We recognise that happy and healthy employees are crucial to the achievement of our strategic plans.
In 2017, we reviewed our occupational health provision and highlighted priority areas for promoting the benefits of health to our employees. We provided all employees with the opportunity to access health check appointments; not just those employees that require health surveillance to ensure fitness for safety-critical roles. We also reviewed and refreshed our drug and alcohol policy, including the introduction of random drug and alcohol tests across the Group.
We continue to work with our national charity partner, Prostate Cancer UK, to drive awareness of men's health issues and the benefits of exercise. In the coming year we will put in place a well-being strategy with a focus on raising awareness through a calendar of events throughout the year.
We aim to operate in accordance with the Universal Declaration of Human Rights. In addition to this we respect and promote human rights through our employment policies and practices, through our supply chain and through the responsible provision of our products and services. The promotion of human rights through our business activities forms part of our broader objective to be a values-driven organisation.
We are committed to protecting and respecting the human rights of our employees and those who work in our supply chain. As a company operating within the UK, the key human rights issue we face is equality, which we address with training for employees and by promoting a culture of inclusion.
The Modern Slavery Act places a duty on companies to make a public statement on the steps they have taken to minimise the possibility of slavery or human trafficking happening in their own business or in their supply chain.
We believe that this risk can be effectively managed and are making a number of phased improvements to our supply chain pre-qualification and audit processes to make them as robust as possible.
We are committed to engaging with our communities by supporting local charitable concerns and initiatives. Throughout 2017 the Group has taken part in many activities across the country, including attending careers events, apprenticeship fairs and mentoring of young people. Our site in Dalton hosted an 'Open Doors' event in March where we welcomed over 60 students and young people interested in learning more about our apprenticeship scheme.
Furthermore, we have a number of employees from across the Group that are STEM ambassadors. Their aim is to encourage students to take on, and enjoy, STEM subjects during their time at school and college.
Throughout 2017 Severfield employees have been committed to raising funds for a number of local and national charities, including Children in Need, Sparks, Bolton Hospice, St. Catherine's Hospice (Scarborough), the Yorkshire Air Ambulance, Air Ambulance Northern Ireland, Willowbridge School (NI), Chickenshed, the PPR Foundation (Harrogate) and the Movember Foundation.
The Group also provides sponsorship to local clubs and groups, supporting communities local to each of our sites, as well as spreading thought leadership to our employees, customers, suppliers and potential employees via various initiatives such as industry exhibitions, seminars, project site visits and other events. Our internal communications team shares good news stories and updates on charity events amongst all our employees, as well as encouraging them to get involved themselves.
We are in the process of subscribing to the Prompt Payment Code as we recognise that prompt payment can make a significant difference to our suppliers and subcontractors, boosting their cash flow and allowing them to invest in growth for the future. We believe that we are currently complying with the requirements of the Code.
The Severfield Foundation (the 'Foundation')
One year ago, the Foundation was set up as a registered charitable incorporated organisation, with the aim of raising funds and awareness for charitable bodies throughout the UK. The Foundation is run by its trustees, who are all employees of the Group. Within our first year, we raised over £52,000 through the activities of Severfield and our employees.
Each year, the Foundation supports a 'partner' charity as well as a number of local charities chosen by each Group company (decided by our employees at each location). For 2017 our 'partner' is Prostate Cancer UK, and through this partnership has enabled our employees to secure places at major sporting events such as the London Marathon, the Great North Run and Ride London.
Prostate Cancer UK is hugely relevant as our workforce is predominantly male, and with one in eight men in the UK being diagnosed with prostate cancer at some point in their lives, raising funds and awareness is important for our employees.
Employees are also encouraged to take part in their own fundraising events for charities close to their hearts, and the Foundation supports such activities where possible.