www.pwc.com/Consulting World Bank Task C:Supporting Electricity Sector Reform Deliverable 2.3: Manpower/ Organizational Rationalization Review Strictly private and confidential Draft 15 December 2017 Disclaimer and copyright note This document has been prepared only for the International © 2017 Bank of Reconstruction and Development ("IBRD") and solely PricewaterhouseCoopers for the purpose and on the terms agreed with the IBRD in our LLP agreement dated 21 March 2017 relating to Task C. All rights reserved. In this The scope of our work was limited to a review of documentary document, 'PwC' refers to the evidence made available to us. We have not independently UK member firm, and may verified any information given to us relating to the services. sometimes refer to the PwC network. Each member firm We accept no liability (including for negligence) to anyone else is a separate legal entity. in connection with this document. We have agreed with you that the report will be provided by you to GECOL for their consideration. We would ask that it not be provided to anyone else unless otherwise agreed in writing by us. This is a draft prepared for discussion purposes only and Please see should not be relied upon; the contents are subject to www.pwc.com/structure for amendment or withdrawal and our final conclusions and further details findings will be set out in our final deliverable. World Bank Strictly private and confidential 15 December 2017 PwC Draft 2 Introduction Analysis of GECOL Manpower GECOL Manpower Sizing Recommendation GECOL re-skilling recommendation Appendix 1 Structuring the deliverable The manpower/organizational rationalization review report is the fifth deliverable of Task C 1 2 3 4 5 Financial performance Customer service Project set-up / Institutional Review and final assessment & performance Inception report Development report financial models improvement 1.1 Data collection  2.1 Strategy for institutional 3.1 Focus of Tariff this framework report review 4.1 Improving financial performance of customer service 5.1 Findings review and final report  development 1.2 Methodology, team and approach validation 2.2 Process mapping &  identification of gaps in staff, skills, perform. 3.2 Tariff structure set-up and reform pathway 4.2 Improving technical performance 2.3 3.3 Manpower / org. Tools (excel model) rationalization review & Trainings 2.4 ERP System review 6 Workshop & Training 7 PMO (progress reporting) Source: Task C inception report World Bank Strictly private and confidential 15 December 2017 PwC Draft 4 2 Overview of storyboard structure The next sections will focus on the analysis of the issues identified in the rapid assessment report and sector performance and structural sector reform reports and the measures to reach the objectives. Next sections approach & focus • Short summary analysis the issues identified in the rapid Initial issues analysis assessment report and sector performance and structural sector reform reports and their implication • Analysis of manpower development since 2008 • Detailed analysis of key Business Units • Analysis of key qualifications Analysis of GECOL • Analysis of ageing structure Manpower • Outlook for future headcount • Manpower benchmark with regional peers for the overall company and for the key business units • Analysis of business unit manpower needs based on GECOL Manpower Sizing benchmark KPIs Recommendation • GECOL manpower need assessment • Proposing prioritized reskilling initiatives GECOL re-skilling • Detailed action plan and guidelines for priority initiatives recommendation • Timeline definition for key initiatives World Bank Strictly private and confidential 15 December 2017 PwC Draft 5 3 Overview of storyboard structure GECOL is an overstaffed utility company with an urgent need of re-skilling the staff The issued mentioned here are a summary of the analysis of the upcoming sections Issues Implication • Compared to regional utilities GECOL is heavily overstaffed • Increasing cost base Overstaffed • Manpower increased by more than 30% in the last 5 years • Increase of subsidies • GECOL is misused as an employment vehicle for Libya • Tariff increase • Overstaffed departments need • Capabilities and skills don’t match with the needs even more employees as the right • Employees with wrong skills are hired Skill needs are not met skills are still missing • New hires are allocated to departments and units on a random basis • Retirements could lead to • Succession planning issues are not reflected in the skill set knowledge lost in critical areas • Hiring follows no strategy and • Roles of a “normal” HR department are spread over different No functional HR increases the manpower on a departments department permanent basis • Influence on manpower and skill set is very limited • New hires don’t fit needs Lack of BoD • HR matters are not considered to • HR Strategy is not in place be crucial for the company commitment on HR and • Training Strategy was discussed within BoD but never approved • Re-Skilling through training is Training topics missing World Bank Strictly private and confidential 15 December 2017 PwC Draft 6 Introduction Analysis of GECOL Manpower GECOL Manpower Sizing Recommendation GECOL re-skilling recommendation Appendix 3 Overview of storyboard structure Overall Headcount increased by 13,088 FTEs between 2008 and 2017 or by more than 40%. Since 2010 the increase was 10,933 FTEs or about 31% (all numbers excl. Police and Collaborators) Total FTEs 3/2017 Total FTEs 3/2017 FTEs FTEs Department (Excl Police & (Incl Police & 2008 2010 Collaborators) Collaborators) Board of Directors 289 298 658 882 Public relations 228 242 350 428 Generation General Dept 3,092 3,468 4,560 4,939 Control general department 1,057 1,359 1,647 1,678 Distribution General Dept 11,492 11,928 15,074 15,461 Planning General department 138 139 163 164 Distribution projects 668 685 914 1,072 Contracts & Development Accounts General Dept 150 163 197 207 Financial affairs 343 352 416 429 Procurement & Stores General Dept 594 608 964 1,132 HR 682 703 1,097 1,154 Services General Dept 1,957 1,847 2,540 2,785 ICT 346 359 432 438 Internal Audit 763 805 893 903 Transmission projects 165 173 253 253 Legal 108 130 166 179 Consumer services 5,867 6,080 7,835 8,829 Transmission General department 1,480 1,826 2,552 2,577 Meduim voltage 2,952 3,348 4,594 4,806 Generation Projects 123 136 277 387 Total 32,494 34,649 45,582 48,703 Colour Legend Generation 3,215 3,604 4,837 5,326 Generation Departments Distribution 15,112 15,961 20,582 21,339 Distribution Departments Supply 5,867 6,080 7,835 8,829 Supply Departments Transmission 2,702 3,358 4,452 4,508 Transmission Departments Support 5,598 5,646 7,876 8,701 Support Departments Total 32,494 34,649 45,582 48,703 Source: GECOL Data ID #017, received 05/04/2017 from GECOL World Bank Strictly private and confidential 15 December 2017 PwC Draft 8 3 Overview of storyboard structure Since 2008 the overall headcount increased by 10,000 employees till 2015 or around 30%. Highest increase was see in the distribution department. General Department (# FTEs) 2008 2009 2010 2011 2012 2013 2014 2015 Board of Directors 518 527 541 566 610 669 689 724 Generation 3,076 3,234 3,452 3,593 3,793 3,940 4,024 4,143 Control 1,042 1,083 1,344 1,374 1,407 1,483 1,534 1,599 Distribution 11,397 11,623 11,835 12,063 12,360 13,236 14,037 14,522 Planning, Studies & Development General Dept 136 136 138 140 143 155 156 160 Distribution Projects 665 673 682 687 727 737 758 804 Contracts & Development Accounts 150 154 163 165 168 169 176 186 Financial Affairs 345 350 354 355 367 368 371 403 Procurement & Stores 587 589 600 605 634 642 661 785 HR & Communictaions 673 683 694 699 771 847 869 921 Services 1,802 1,865 1,912 1,975 2,080 2,104 2,128 2,234 ICT 344 351 358 363 369 385 399 425 Internal Control 757 788 800 814 831 834 836 870 Transmission projects 164 169 172 175 177 181 185 196 Legal Affairs 107 119 129 133 135 136 136 152 Consumer services 5,826 5,974 6,039 6,064 6,193 6,428 6,613 6,790 Transmission 1,482 1,583 1,825 1,962 2,019 2,219 2,477 2,513 Meduim Voltage 2,718 2,978 3,100 3,170 3,240 3,641 3,921 4,072 Generation projects 122 128 134 137 139 142 146 163 Total 31,911 33,007 34,272 35,040 36,163 38,316 40,116 41,662 Generation 3,198 3,362 3,586 3,730 3,932 4,082 4,170 4,306 Distribution 14,780 15,274 15,617 15,920 16,327 17,614 18,716 19,398 Supply 5,826 5,974 6,039 6,064 6,193 6,428 6,613 6,790 Transmission 2,688 2,835 3,341 3,511 3,603 3,883 4,196 4,308 Support 5,419 5,562 5,689 5,815 6,108 6,309 6,421 6,860 Total 31,911 33,007 34,272 35,040 36,163 38,316 40,116 41,662 Source: GECOL Data, received 31/10/2017 from GECOL, deviation to 2008 and 2010 figures used in other analysis is due to the fact that this figures don’t include the PR department and that the ERP does not extract the historical data in a standard report and the staff had to work on them on individual basis. Colour Legend Generation Departments Distribution Departments Supply Departments Transmission Departments Support Departments World Bank Strictly private and confidential 15 December 2017 PwC Draft 9 3 Overview of storyboard structure Increase of FTEs in all Business Units since 2008 till 2015. Highest increase with 60% in the transmission unit, lowest increase FTE Development 2008 – 2015 (Business Units) 45,000 40,000 6,860 6,421 35,000 6,309 6,108 4,308 5,815 4,196 5,689 30,000 5,562 3,883 5,419 3,603 3,341 3,511 6,790 2,835 6,613 Support 25,000 2,688 6,428 6,064 6,193 Transmission 5,974 6,039 5,826 20,000 Supply Distribution 15,000 18,716 19,398 Generation 17,614 15,920 16,327 15,274 15,617 10,000 14,780 5,000 3,198 3,362 3,586 3,730 3,932 4,082 4,170 4,306 - 2008 2009 2010 2011 2012 2013 2014 2015 Source: GECOL Data, received 31/10/2017 from GECOL, deviation to 2008 and 2010 figures used in other analysis is due to the fact that this figures don’t include the PR department and that the ERP does not extract the historical data in a standard report and the staff had to work on them on individual basis. World Bank Strictly private and confidential 15 December 2017 PwC Draft 10 3 Overview of storyboard structure Since 2008 especially Distribution and Generation departments increased their manpower substantially. Also the department for the BoD increased their manpower by 16%. The overall increase was 5% Manpower development in GECOL departments since 2008 4,000 18% 16% 16% 3,500 16% 14% 3,000 12% 2,500 9% 10% 2,000 8% 8% 7% 7% 7% 7% 7% 8% 6% 1,500 5% 4% 6% 4% 4% 4% 1,000 3% 3% 2% 2% 4% 500 2% 0 0% 2008 -2017 2010 -2017 average change p.a. since 2008 World Bank Strictly private and confidential 15 December 2017 PwC Draft 11 3 Overview of storyboard structure Headcount by qualification shows that around 30,000 FTEs have a technical background (engineers or technician). Around 3,800 FTEs have a financial background and around 3,600 FTEs work for manual services Qualification of employees in different departments in 2017 Electricity Defence General Dept Generation Projects General Dept Planning, Studies & Development General Dept Legal Affairs General Dept Contracts & Development Accounts General Dept Transmission Projects General Dept Financial Affairs General Dept ICT General Dept Board of Directors Internal Control General Dept Distribution Projects General Dept HR & Communictaions General Dept Procurement & Stores General Dept Control Generfal Dept Transmission General Dept‫ا‬ Services General Dept Generation General Dept Medium Voltage Networks General Dept Consumer Services General Dept Distribution General Dept - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Engineers Financial Medical Software Research Services (manual) Technician Trainees Translators World Bank Strictly private and confidential 15 December 2017 PwC Draft 12 3 Overview of storyboard structure Headcount by Age shows that the demographic pyramid is not balanced. Middle Aged staff is the majority and less young employees work for GECOL GECOL No. of Age Group Employees GECOL % Optimum % 1) (18 - 30) 5,209 12% 25% (31 - 40) 14,517 32% 25% (41 - 50) 17,031 38% 25% (51 - 60) 7,618 17% 15% (61 - 65) 693 2% 10% TOTAL 45,068 100% 100% 1) Optimum pyramid should have an equal balanced structure according to several experts in the utility sector like “BET Aachen”, “Verbund Sustainability Report” etc 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - (18 - 30) (31 - 40) (41 - 50) (51 - 60) (61 - 65) GECOL No. of Employees Optimal GECOL No. of Employees World Bank Strictly private and confidential 15 December 2017 PwC Draft 13 3 Overview of storyboard structure Applying the optimum Ageing Structure on the Tripoli South Power Stations shows that the stations should employ younger employees to replace future retirements accordingly Tripoli # FTEs % of total South FTEs Optimum Ageing Structure Power 80 Station 71 70 Aging 61 - 30 15 7.5% 60 50 50 50 50 44 31 - 40 61 30.7% 40 30 41 - 50 71 35.7% 30 19 20 15 51 - 60 44 22.1% 8 10 61 - 65 8 4.0% 0 -30 31 - 40 41 - 50 51 - 60 61 - 65 TOTAL 199 100.0% Actual FTE Structure Optimum FTE Structure Source: GECOL, 7 November 2017, HR Department World Bank Strictly private and confidential 15 December 2017 PwC Draft 14 3 Overview of storyboard structure If the manpower increase would continue as since 2008 the totals FTEs in 2020 would be around 53k FTEs and in 2025 more than 68k FTEs ESTIMATED MANPOWER DEVELOPMENT 80,000 70,000 68,110 CAGR 5% 61,556 64,746 58,531 60,000 55,662 52,941 50,358 50,000 47,908 45,582 40,000 30,000 20,000 10,000 0 2017 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Generation Distribution Supply Transmission Support Total Linear (Total) Note: The FTE numbers don’t include police and collaborators World Bank Strictly private and confidential 15 December 2017 PwC Draft 15 3 Overview of storyboard structure Manpower per MW installed capacity is over the average and also higher than most of the regional peer companies FTEs Manpower per MW installed capacity 6.00 GECOL, 5.42 5.00 Sonelgaz, 4.66 EEHC, 4.37 4.00 STEG, 3.41 Average: 3.40 FTEs 3.00 2.00 ONEE, 1.17 1.00 - Libya Morocco 2) Egypt 3) Algeria4) Tunis 5) Financial Year 2015 2016 2015/16 2016 2016 Instal. Capacity in 7,684 1) 8,262 38,857 19,006 3,599 (MW) FTEs overall 41,662 9,642 169,933 88,569 12,288 SOURCE: 1) The installed capacity includes the effective installed capacity NOT the name plate capacity. PWC data ID #22 – Installed and available capacity - Received on 05/04/2017 from GECOL 2) Annual Report 2016, ONEE 3) Annual Report 2015/16, EEHC 4) Annual Report 2016, Sonelgaz 5) Annual Report 2016, STEG World Bank Strictly private and confidential 15 December 2017 PwC Draft 16 3 Overview of storyboard structure Manpower per Net Generation in GWh is over the average and also higher than most of the regional peer companies FTEs Manpower per Net Generation in GWh 1.60 1.40 1.34 1.17 1.20 1.00 0.91 0.83 Average: 0,85 FTEs 0.80 0.60 0.40 0.31 0.20 - GECOL ONEE 2) EEHC 3) Sonelgaz 4) STEG 5) Libya Morocco Egypt Algeria Tunis Financial Year 2015 2016 2015/16 2016 2016 Net Generation 35,481 1) 30,840 186,320 66,263 14,806 (GWh) FTEs overall 41,662 9,642 169,933 88,569 12,288 SOURCE: 1) PWC data ID #22 , Received on 05/04/2017 from GECOL 2) Annual Report 2016, ONEE 3) Annual Report 2015/16, EEHC 4) Annual Report 2016, Sonelgaz 5) Annual Report 2016, STEG World Bank Strictly private and confidential 15 December 2017 PwC Draft 17 3 Overview of storyboard structure Customers per FTE is far below the average and also the lowest within the regional peer companies Customers per FTE 700 Customers 600 582 500 400 312 300 Average: 296 Customers 191 200 99 100 30 - GECOL ONEE EEHC Sonelgaz STEG Libya Morocco Egypt Algeria Tunis Financial Year 2015 2016 2015/16 2016 2016 Customers 1,232 5,611 32,400 8,810 3,837 in Thousand. FTEs 41,662 9,642 169,933 88,569 12,288 overall World Bank Strictly private and confidential 15 December 2017 PwC Draft 18 3 Overview of storyboard structure Customers per FTE in Distribution & Supply is far below the average and also the lowest within the regional peer companies Customers per FTE in Distribution & Supply 1,200 1,078 1,000 800 600 Average: 518 Customers 400 317 200 160 47 - Libya GECOL Morocco ONEE Egypt EEHC Algeria Sonelgaz Financial Year 2015 2016 2015/16 2016 Customers 1,232 5,611 32,400 8,810 in Thousand. FTEs 26,188 5,207 102,227 55,000 In D & S World Bank Strictly private and confidential 15 December 2017 PwC Draft 19 3 Overview of storyboard structure GWh Net Generation per FTE in Generation is close to the benchmarks within the regional peer companies … GWh GWh Net Generation per FTE 18.00 16.16 16.00 14.00 12.00 10.00 Average: 8,61 GWh 8.24 8.00 6.00 5.51 4.17 4.00 2.00 - Libya GECOL Morocco ONEE Egypt EEHC Algeria Sonelgaz Financial Year 2015 2016 2015/16 2016 Net Generation in 35,481 30,840 186,320 66,263 GWh FTEs 4,306 1,908 33,820 15,890 in Generation World Bank Strictly private and confidential 15 December 2017 PwC Draft 20 3 Overview of storyboard structure … but bottom up analysis of Tripoli South Power Station shows that staff number is 8 times higher that in benchmark CCGT Plants. Therefore a detailed bottom analysis of all generation units is needed for the future. Tripoli South Power Station # FTEs Other Capacity # FTEs FTE per 500 MW CCGTs MW MW Qualification plants Engineers 79 Norfolk, 370 30 0.081 UK, Start 2019 Technician 76 Mississippi, 900 25 0.028 Driver 13 US, Start 2003 Clerks 8 Nottingham 1,332 50 0.038 shire, UK Start 2013 Fuel Dispenser 7 AVERAGE 0.049 IT 6 Average 500 25 0.049 Fire fighter 5 applied on Tripoli South Others 5 Power Station TOTAL 199 Source: http://utilityweek.co.uk/news/lift-off-for-new-ccgt-plant/1296662 http://www.power-eng.com/articles/2001/12/intergen-completes-financing-on-900- Source: GECOL, 7 November 2017, HR Department mw-project-in-mississippi.html https://www.edfenergy.com/energy/power-stations/west-burton-b-ccgt World Bank Strictly private and confidential 15 December 2017 PwC Draft 21 3 Overview of storyboard structure Transmission FTE per km Transmission line is in line within the regional peer companies FTEs Transmission FTE per km 0.80 0.69 0.70 0.60 0.50 0.42 0.40 Average: 0.29 FTEs 0.30 0.27 0.20 0.10 0.06 - Libya Morocco Egypt Algeria Financial Year 2015 2016 2015/16 2016 Transmission Lines in 25,545 44,904 15,996 27,838 km FTEs In 4,308 1,446 31,096 11,600 Transmission World Bank Strictly private and confidential 15 December 2017 PwC Draft 22 3 Overview of storyboard structure The percentage of total Manpower working in support units is above the average and the highest within the regional peer group % FTEs in Support 18% 16% 14% 12% 10% 8% 16% Average: 7% 6% 11% 4% 7% 2% 2% 0% Libya Morocco Egypt Algeria Financial Year 2015 2016 2015/16 2016 Total FTEs 41,662 9,642 169,933 88,569 FTEs 6,860 1,081 2,790 6,079 in Support World Bank Strictly private and confidential 15 December 2017 PwC Draft 23 3 Overview of storyboard structure Manpower KPIs for GECOL show that especially distribution and support departments are oversized compared to the peer group Benchmark Manpower KPIs 2008 2010 2015 GECOL Best Average Peer Group Manpower per MW installed capacity 5.24 4.34 5.42 4.34 3.40 Manpower per GWh produced 1.13 1.07 1.17 1.07 0.85 Customers per FTE 36.93 35.37 29.57 36.93 296.09 Customers per FTE in Distribution & Supply 57.20 55.61 47.05 57.20 518.25 Customers per FTE in Distribution 79.41 76.79 63.52 79.41 293.68 Customers per FTE in Supply 204.53 201.58 181.46 204.53 352.41 GWh produced per FTE in Generation 8.92 9.03 8.24 8.24 8.61 Transmission FTE per km 0.18 0.22 0.27 0.18 0.29 % FTEs in Support 17% 16% 16% 16% 7% KPIs related to the overall company performance show that GECOL is overstaffed especially in relationship to the number of customers KPIs related to distribution & supply show that especially GECOL ‘s distribution department is completely overstaffed KPIs related to the generation department are more or less in in line with regional benchmarks KPIs related to transmission show that GECOL is even a bit understaffed compared to regional benchmarks KPIs related to the support department show that GECOL overstaffed compared to regional benchmarks Most of the KPIs (with the exception of Generation KPIs) have deteriorated since 2008 and GECOL was much more efficient in the past compared to 2015. World Bank Strictly private and confidential 15 December 2017 PwC Draft 24 4 Overview of storyboard structure Overstaffing in Distribution and Supply and Support Units in contrast to (future) understaffing in Generation Issues Conclusion • Constant Manpower Increase over the last 8 years in all departments • Increase is only justified in the Generation and Transmission Department • Manpower need for 2025 has to 1 • Distribution General and Consumer services hired most of the be identified for all key business Manpower increase employees in absolute figures since 2008 units and manpower has to be • BoD Department shoes the highest % increase since 2008 adjusted according to this needs • If the increase continues as in the last 8 years, the total FTE number would reach 53k in 2020 and i68k n 2025 • GECOL’s overall manpower based on generation, installed capacity or • Target KPIs for GECOL for 2020 customer KPIs is not in line with regional benchmarks Mismatch with most of and 2025 have to be identified for 2 the benchmark KPIs • Deep dive in different departments showed a significant overstaffing the different Business Units especially in Distribution & Supply and in the Support Units • Manpower Needs for 2025 • Generation and Transmission are in line with regional benchmarks • 30,000 Engineers and Technician seems to be a proper fit for a utility • Skills need assessment has to company start 3 Skill Set Composition • But bottom up examples show that skill needs don’t match with the skill • Based on future needs Re- set of the employees Skilling process has to start • Employee allocation doesn’t follow the needs • around. 5,000 FTEs or 12% are aged below 30 • Focus on training of staff aged • around 20,000 FTEs or 44% are aged below 40 below 40 4 Age structure • around. 25,000 FTEs or 57% are aged over 40 • Secure knowledge transfer of • around. 8,000 FTEs or 19% are aged over 50 group aged over 50 World Bank Strictly private and confidential 15 December 2017 PwC Draft 25 Introduction Analysis of GECOL Manpower GECOL Manpower Sizing Recommendation GECOL re-skilling recommendation Appendix 4 Overview of storyboard structure Based on benchmark KPIs from regional utilities the manpower resizing would lead to a substantial downsizing Manpower needs based on KPIs 45,000 41,662 40,000 6,860 35,000 30,807 4,308 30,000 1,900 25,815 6,790 25,000 5,829 1,592 5,785 3,817 20,000 3,632 4,581 15,000 19,398 4,358 10,000 14,680 5,000 10,447 4,306 - 2015 2020 Average 2025 Average Generation Distribution Supply Transmission Support World Bank Strictly private and confidential 15 December 2017 PwC Draft 27 5 Overview of storyboard structure Overstaffing in Distribution and Supply and Support Units in contrast to (future) understaffing in Generation GECOL manpower need assessment Support Units need only 25% of current staff according to regional minus 75% benchmarks Distribution Unit needs only Supply Unit should be reduced minus 75% 25% of staff according to regional minus 75% by 75% according to benchmarks benchmarks Currently Generation is staffed in Transmission Unit is more or line with regional benchmarks but less in line with regional average increase in future capacity needs plus 200% but according to best practice Plus 30% sharp increase of staff could be also increased by 30% World Bank Strictly private and confidential 15 December 2017 PwC Draft 28 6 Overview of storyboard structure To reach the Manpower Resizing goals in 2025 only a combination of intrusive and conservative approaches could work BUT re-skilling is the top priority action Manpower-related resizing approaches Immediate Actions Mid Term Actions Immediate Actions which should start in 2017/18 After the immediate actions starting after 2020 the Re-Skilling is the TOP Priority which has to start following actions should be implemented till 2025 immediately Start immediately to reassign especially technicians to other Re-Skilling Reallocate departments like the generation Offer buyout solutions for non core department Incentivize businesses like Health Service, Driver, Buyouts Translation etc Retrain for Leverage current resources to fill inside work unmet needs in the generation department Incentivize to Ask employees to take voluntary lay- leave offs Institute a hiring freeze as more than Freeze Hiring 12% are aged below 30 and more than 40% aged below 40 Temporarily or permanently terminate Dismiss employment for a group of employees Prepare an early retirement package for especially in D&S Early employees aged over 60 (2% of total Retirement FTEs) Train managers and staff professionals Start GECOL to be hired inside but also outside the Academy company World Bank Strictly private and confidential 15 December 2017 PwC Draft 29 Introduction Analysis of GECOL Manpower GECOL Manpower Sizing Recommendation GECOL re-skilling recommendation Appendix 7 Overview of storyboard structure The need for GECOL to invest in corporate-wise reskilling is among the key recommendation emerging from Task C Proposed reskilling initiatives 1 2 3 4 High Centralizing all HR activities Training should become an Developing a medium and Approve a general training within a core department integral part of performance long term training strategy policy within HR management 5 6 Secure central funding for all Establishment of e-training Establishment of structured trainings out of GECOL’s GECOL Academy for all increased digitalisation also Priority succession planning budget employees in learning solutions Ad-hoc Apprentice training dual Introduction of Introduction of management contracts for vocational training (electrical training incentive schemes Executive development specific / new plants for engineering and metalworking (e.g. trainee programs, including BoD training training purposes technician)) talent schemes) Launch of mentoring Low Personnel development Launch of programs Establishment of should focus on technical and target internal (e.g. pairing between international exchange safety qualifications and IT hiring procedure experienced employees and training programs training. more junior ones) World Bank Strictly private and confidential 15 December 2017 PwC Draft 31 7 Overview of storyboard structure 1 Centralizing all HR activities within a core department within HR Human Resources Management Actions needed The HR department at GECOL should have the 1. Develop a HR strategy and approve it by the authority to issue guidelines concerning all issues BoD relating to personnel management. Focus should be placed on the following core functions: 2. Consolidate in HR department (under MD) all the HR-related core functions (see the left box) • coordinating personnel planning and management; leaving non-core HR activities within Support • preparing a Group personnel budget; Services • recruiting, personnel marketing and employer branding; • strategic alignment of the application of labor and social law, and employer representation in interactions with employee representatives; • remuneration and benefits for executives and employees; • personnel development/training; • basic questions relating to occupational health care; and • diversity and inclusion. World Bank Strictly private and confidential 15 December 2017 PwC Draft 32 7 Overview of storyboard structure 2 Developing a medium and long term training strategy Actions needed and implementation guidelines 1. Assess the skill set of all employees and centralize them in a database 2. Based on a detailed job description in the new organizational structure the skill needs have to be defined 3. The skill needs assessment has to be done on a short, medium and long term basis to consider also the retirement of employees and future expansion plans (especially in the generation department) 4. The training strategy has to be developed base on this needs and should add also skills required by the overall strategy of GECOL 5. The training strategy has to be approved by the BoD 6. The HR department should be responsible for the implementation of the training strategy 7. The BoD has to review the training strategy on an annual basis World Bank Strictly private and confidential 15 December 2017 PwC Draft 33 7 Overview of storyboard structure 3 Training should become an integral part of performance management What is performance management The Performance Management Cycle It is a means of getting better results from the organisation, teams and individuals by understanding and managing performance within an agreed framework of planned goals objectives and standards It can be defined as a process or set of processes for establishing shared understanding about what is to be achieved, and of managing, rewarding and developing people in a way which increases the probability that will be achieved in the short and longer term The overall aim of performance management is to establish a culture in which managers, individuals and teams take responsibility for the continuous improvement of business processes and of their own skills, competencies and contributions and are recognised rewarded according to the extent to which agreed objectives are achieved World Bank Strictly private and confidential 15 December 2017 PwC Draft 34 7 Overview of storyboard structure 4 Approve a general training policy Guidelines for implementing a proper training policy As mentioned in the Performance Management Cycle Training should be a reward and not a punishment for employees. Therefore the following topics have to be addressed in the training policy: 1. An overall target of training hours per year. Top utility companies provide around: • 30 hours continuous annual education per employee and • around 70 hours annual education per executive 2. Transparent process about training approval for local and international training 3. Clear remuneration and overtime policy. To attend a training should not become an monetary disadvantage for employees 4. Clear policy about hiring external trainers and training institutions and their payment 5. Training policy has to cover management as well 6. Training policy must be approved by BoD 7. The BoD has to review the training policy on an annual basis World Bank Strictly private and confidential 15 December 2017 PwC Draft 35 7 Overview of storyboard structure 5 Secure central funding for all trainings out of GECOL’s budget Actions needed At the moment only soft skill trainings are funded centrally through the Finance Department. Most of the technical trainings are funded though different channels (by suppliers, part of CAPEX etc). : 1. After centralizing all training activities in the HR department also a centralized training budget has to be implement within the HR department. 2. As we were informed by the former HR manager around 25 Mio. LDs were always foreseen for basic trainings in the past but never approved and spent. Therefore in future GECOL budgets an amount of min 25 – 30 Mio. LD has to be included for training. 3. The get the buy in from the board on the training as well the future training budget has to be approved as part of the budgeting process by the BoD. 4. Clear payment policy for external trainer and training institutions has to be implemented World Bank Strictly private and confidential 15 December 2017 PwC Draft 36 7 Overview of storyboard structure 6 Institution of a Corporate Academy should be the core for future capacity building within GECOL All GECOL training activities should be centralised in a training academy and opened also for external parties Capability Delivering Mindset Business Focus building learning change Understand Design and develop Deliver solution using Evaluate outcome GECOL’s GECOLs’s Capability the best facilitators and effectiveness organisational Program and resources to GECOL’s goals and organisation and Objectives • Assess current • Roll-out the capability the individual competencies, identify building solution, • Meet with knowledge and skills manage training • Carry out program GECOL gaps to be addressed. delivery, administration evaluation. management to and logistics. understand in • Link learning objectives • Review business detail, their to content and select • Monitor and control feedback and needs, appropriate platforms to the effectiveness of individual aspirations and deliver learning. the training, test assessments. challenges. learning and • Develop customised and understanding • Update and adapt • Understand how contextualised learning throughout the the program to building materials tailored to program. maximise the capability will GECOL’s business. outcome of produce a capability building.. positive return on • Produce the roadmap GECOL and schedule for the investment. learning journey. World Bank Strictly private and confidential 15 December 2017 PwC Draft 37 7 Overview of storyboard structure Integrated Measures and activities for reskilling activities (1 of 3) Measures Activities Year 2018 2019 2020 Owner Develop a HR strategy and approve it by the BoD HR Strategy GECOL Centralizing Consolidate in HR department (under MD) all the HR-related all HR core functions leaving non-core HR activities within GECOL activities Support Services Assess the skill set of all employees GECOL Developing a Centralize the skill set in a database Capabilities GECOL medium and Define future skill needs & skills map GECOL long term Develop a training strategy GECOL training Approval of training strategy by the BoD GECOL strategy Implementation of training strategy GECOL Review of training strategy by the BoD GECOL Defining and agreeing on objectives Performance Managements Objectives GECOL Implement Monitoring, supporting and coaching performance GECOL performance Appraising performance and providing feedback GECOL management Link Performance to pay, training, career development and GECOL succession planning Develop a general training policy Training Policy GECOL Develop a Approval of the training policy by the BoD GECOL general Review of training policy by the BoD GECOL training policy Implement a centralized training funding Training Budget GECOL Secure Approval of the training budget by the BoD GECOL training Review of training budget by the BoD GECOL funding Develop a trainer payment policy Trainer payment policy GECOL Milestone One shot activity Source: PwC analysis World Bank Strictly private and confidential 15 December 2017 PwC Draft 38 7 Overview of storyboard structure Integrated Measures and activities for reskilling activities (2 of 3) Measures Activities Year 2018 2019 2020 Owner All GECOL training activities should be centralised in GECOL Academy GECOL GECOL a training academy Academy Open the Academy for external parties GECOL Structured Establishment of structured succession planning GECOL succession planning e-training Implement e-training GECOL Power Plant Negotiate and sign Ad-hoc management contracts for specific Power Plants Training Contracts GECOL Training / new plants for training purposes Executive Develop Executive development plan including BoD training Executive Training GECOL Training Continuous Executive and BoD training GECOL Apprentice Implement apprentice training dual vocational training GECOL Training (electrical engineering and metalworking technician) Training Introduction of training incentive schemes GECOL incentives (e.g. trainee programs, talent schemes) Milestone One shot activity Source: PwC analysis World Bank Strictly private and confidential 15 December 2017 PwC Draft 39 7 Overview of storyboard structure Integrated Measures and activities for reskilling activities (3 of 3) Measures Activities Year 2018 2019 2020 Owner Internal Launch of target internal hiring procedure GECOL Hiring Mentoring Launch of mentoring programs (e.g. pairing between GECOL program experienced employees and more junior ones) International Establishment of international exchange training programs GECOL Training programs Focus on Focus in personnel training should be on technical and safety specific GECOL qualifications and IT training. training areas Source: PwC analysis Milestone One shot activity World Bank Strictly private and confidential 15 December 2017 PwC Draft 40 Introduction Analysis of GECOL Manpower GECOL Manpower Sizing Recommendation GECOL re-skilling recommendation Appendix 7 Overview of storyboard structure The selection of the benchmarked countries was based upon five main criteria Benchmarking selection criteria Long list of countries (Selection) Selection criteria Countries selected Country development Vertically Integrated No relevant case Monopoly Libya Chad In terms of income levels, political stability, study institutional development and macroeconomic environment Single Buyer Country challenges Vertically Integrated Lebanon Kuwait Iraq Indonesia Egypt Single Buyer In terms of countries facing significant challenges like losses, blackouts, bad debts, etc. Iran Tunisia Morocco Egypt Tunisia Morocco Unbundled Sector size Single Buyer Algeria KSA Qatar Jordan Ukraine Algeria In terms of population served and generation capacity Austria Brazil India Wholesale Market Reform lesson In terms of key takeaways and relevance for the Chile Korea Turkey Libyan power sector Data availability Retail Competition USA European Union In terms of reliable information and available Japan Kazakhstan Russia documents World Bank Strictly private and confidential 15 December 2017 PwC Draft 42 7 Overview of storyboard structure Each selected utility company was then assessed under 8 parameters, with the aim of extracting meaningful manpower KPIs Manpower KPIs used in the Benchmark Study Selected countries Key parameters analyzed in the benchmark No relevant case study • Use KPIs which are based on the number of Overall KPIs customers, installed capacity and electricity produced • Use similar integrated utilities in different stages Egypt • Use KPIs for different BU (Generation, KPIs for different Transmission, Distribution & Supply, Support) Tunisia Morocco Business Units • Detailed KPIs for Distribution and Supply Algeria • Show the developments of these KPIs within Comparison GECOL over the last years • Benchmark latest GECOL KPIs with average and median of peer group • Derive through a top down approach target Recommendation manpower figures World Bank Strictly private and confidential 15 December 2017 PwC Draft 43