Flexible Steel

At the start of 1997, when British Steel announced an accelerated cost-cutting programme to counter the erosion of profits by currency losses, predictions of heavy jobs cuts soon hit the headlines. The company’s staff has dwindled from around 250,000 in the late 1970s to around 40,000 today, so the scare stories are not surprising. But […]

At the start of 1997, when British Steel announced an accelerated cost-cutting programme to counter the erosion of profits by currency losses, predictions of heavy jobs cuts soon hit the headlines.

The company’s staff has dwindled from around 250,000 in the late 1970s to around 40,000 today, so the scare stories are not surprising. But although 4,000 jobs have gone since 1996, with similar losses to follow until 2002, compulsory redundancies are no longer seen as the way forward. British Steel is achieving the cuts mainly through natural wastage coupled with a training programme that is introducing teamworking to the workforce.

Group personnel director Allan Johnston says teamworking which reverses a long-standing policy of promotion by seniority and gives workers more responsibility and less supervision is overdue. ‘As we enter the next millennium, the nature of people’s jobs is changing massively compared to 20 years ago, when over half our staff joined.’

Attitude surveys undertaken for British Steel showed that workers were willing to learn new skills. ‘Most want more training and to apply their skills more flexibly. They want careers, not jobs, and are also highly committed to the industry,’ says Johnston.

Teamworking has been accompanied by harmonisation of conditions of pay and employment.

For Johnston, a big challenge has been to convince staff of the long-term benefits of the changes in the face of immediate job losses. ‘There’s no easy solution,’ he says. ‘It’s a question of taking time to do it properly and professionally.’

Teamworking has been implemented on the shopfloors of all the group’s large UK process plants, and is to be applied across the company. ‘There is a broad teamworking template at each of the four main steelmaking sites, but each plant develops this to suit its own needs,’ says Johnston.

On the shopfloor, teams of craft workers and process staff take joint responsibility for routine plant maintenance. In the past this would have been unthinkable, with strict demarcation between these workers and a separate maintenance team. Teams also take some responsibility for technological aspects of a process and leaders even undertake personnel duties, such as absence recording and discipline.

Greater openness between management and workers has helped in the implementation of these new working practices. ‘We’ve never had a problem introducing technological change and have been pushing at an open door in introducing teamworking,’ Johnston says.

Much co-operation with unions has been needed. ‘We are changing what was seen as a bit of a birthright. The demarcartion line between craft and process skills was absolute. We’ve had to work hard to persuade people that being a craft or process worker with enhanced skills is better than their old craft or process job.’

Teamworking was first introduced three and a half years ago at the Shotton coatings plant on Deeside in Wales. The result has been overall direct savings of £6.4m a year. The plant now operates more efficiently with a 12% smaller work force.

Productivity is up by nearly 1,600 tonnes a week and product yields have risen 1.14%. Customer complaints have fallen 1% and there has been a 21.5% fall in known injuries to manufacturing workers. Staff suggestions have risen by 74%, bringing big performance improvements.

‘Changing a century of traditional working practices in a short time was a bit of a shock,’ says Jim Mullins, the plant’s chief union representative. ‘Initially there was lots of suspicion and concern about job losses, but most have been handled through natural wastage.’

The changes did not require compulsory redundancies. ‘A lot of people were asked to undertake new tasks,’ says Mullins. ‘This was especially traumatic for older workers. But most have surprised themselves and find their jobs more rewarding.’

‘Workers are no longer pigeon-holed into one role and gain a greater sense of achievement through greater responsibility.’

Visits to customers in the UK and the rest of Europe have helped to improve individual understanding of customers’ requirements.

But the greatest motivation behind the changes has been survival. ‘Our people understand the need for change,’ says Johnston.

There have also been financial incentives for workers to retrain. In the past, pay was related to a specific job or task with bonuses on top. Now, members can undertake extra training paid for by the company, such as Health and Safety or NVQ qualifications, and on completion gain a personal competence supplement to their earnings.

By the end of last year, 22% of Shotton’s team members had gained or were in the process of gaining these supplements.

Training takes place mainly off the job in two-week blocks in co-operation with local technical colleges. There is also on-site training given by members of staff.

Johnston is proud of British Steel’s training record. It invests about £50m a year in training. This is expected to rise to £80m with teamworking, raising the average number of training days from 11 to 15.

The 10-year period set for carrying out a manpower productivity plan has been cut to five, due to relentless pressure on profits from the strong pound. This created a logistics headache for the company’s training providers, but Johnston is confident of completing the programme on time. He says that despite the steep learning curve, ‘from the start to the end of the process I’d be surprised if we were not achieving double-digit improvements’.