Why is it important?

Our people are our biggest asset and we are committed to effectively managing all aspects of health and safety and creating a safe, inclusive, and diverse working environment where everyone can thrive.

We have around 1,800 employees across our manufacturing facilities, construction sites and offices. Our mix of designers, project managers, quantity surveyors, estimators, engineers, fabricators, steel erectors and support function experts work together with a clear, shared purpose, to develop better ways to build, for a world of changing demands.

Management approach

As life for many of our colleagues has largely returned to normal following the pandemic, our focus has been on embedding new ways of working, increasing our communication and listening and finding ways we can continue to improve our colleagues experience of working at Severfield. We have focussed our activities in the following main areas:

• Maintaining our commitment to our core value – 'safety first'. To provide industry leading Safety, Health and Environmental ('SHE') performance.
• Creating an environment where Severfield colleagues feel listened to and are fairly recognised and rewarded for their contribution to the Group.
• Reviewing our performance, development and recruitment processes.

Safety first – striving for a zero-harm workplace

Our focus has been, and always will be, safety and wellbeing first with no exceptions, an approach supported and guided by the board, management and all employees. Operating within the heavy manufacturing and construction sector means many of our activities carry an element of high risk to our colleagues and wider stakeholders and we recognise our duty of care to safeguard not only their physical health but also their mental health and wellbeing.

Our executive committee continues to review safety performance monthly, primarily focusing on the Group's injury frequency rate ('IFR'). In depth reviews are also carried out on all RIDDORs (accidents that have resulted in a specified injury or has led to a colleague's absence from work for more than seven consecutive days – three days in Northern Ireland) and high potential near miss incidents ('HiPo'), with input from the Group SHE director, chief operating officer and the managing director of each division. Findings from investigations and 'lessons learned' are shared Group-wide using measures such as 'stand downs' or 'tool-box talks' to promote a collaborative approach to preventing accidents and incidents.

Creating a culture of inclusivity and diversity

We are committed to building a supportive, diverse, and inclusive working environment where all colleagues feel they belong.

Ensuring we have multiple avenues to enable meaningful dialogue with our people is key to achieving this aim. Our intranet 'Connect' enables us to update colleagues on the strategy, performance and progress of the organisation, general company news and health and wellbeing issues. Colleagues have the ability to comment on articles, take part in surveys and share their views. Monthly colleague engagement with the platform is at 99 per cent .Toolbox talks, manager briefings, emails, and Skyline (our company magazine) all play their part in keep our colleagues informed and connected.

Through working closely with Louise Hardy (the Group's designated non-executive director responsible for workforce engagement) our MyVoice Forum has enabled many colleagues concerns to be raised and tackled. Improvements to mental health provision, enhanced facilities for our manufacturing colleagues and better health benefits for our workforce are just a few of the topics that have been raised and improved throughout the year. Minutes of each meeting are shared with the executive committee and board and detailed communication is shared with all colleagues through our intranet.

We are committed to building diversity, equality and inclusion into everything we do and continue to implement the right conditions for all colleagues to achieve their full potential and bring their whole, authentic self to work. We acknowledge we have a long way to go. With only 9 per cent of our workforce being female greater focus is being placed on our hiring practices and candidate attraction.

Gender Diversity Statistics

All colleagues have had the opportunity to share with us their own diversity data and information on ethnicity, disability, sexual orientation, religion or belief and gender has been collated giving us a better understanding of under represented groups in our workforce. This data will become an integral part of the decision-making process around talent, performance, and reward. Using the data we held on gender in our pay review processes we have been able to narrow the gap between the average male and female salaries by 22 per cent over the past 2 years. Using gender data in our annual talent review process and comparing this to the previous year we were able to highlight certain areas for improvement including around the development of more junior females. A female mentoring programme is being piloted to help improve the career prospects of these women in our business.

As of 25 March 2023, the board had two female directors (20 per cent). Female representation on our executive committee is two (18 per cent). The company have a 'career level structure' (underpinned by AON's Joblink methodology) with the executive committee (excluding executive directors) being the most senior level. For the two levels below this our female representation is 27 per cent and 20 per cent, respectively. Our median gender pay gap for the Group stands at 18 per which is a small increase on previous years due to pay increases for certain areas to address the recruitment and retention challenges we faced. We pay close attention to hourly rate differentials between males and females at each of our career levels and are pleased to have achieved a normalised hourly rate ratio of 1.02.

Gender Diversity Statistics

We have continued to offer all colleagues the opportunity to share in the future success of the business through investing in an annual SAYE scheme, with 21 per cent of the workforce participating in this year's scheme. Consistency and alignment have been topics raised by our MyVoice forum throughout the year and we have started to address these. Our pension offering to all colleagues (including executive directors) is now 7 per cent employee contribution matched by a 7 per cent employer contribution. Due to the cost-of-living crisis we have however retained the option for staff to opt out of this offer and take a lower matched option of 5 per cent for affordability reasons.

Performance, development & recruitment

The future of the business depends on our ability to attract, recruit, develop and retain individuals with the right mix of expertise, technical skills, and personal qualities. A thorough review of the performance and potential of 655 colleagues enabled the board to have a complete and clear picture of talent across the Group and to ensure strategies are in place to further develop and retain the leaders and specialists we need for our future. This number is up from 189 in 2022 demonstrating our commitment to the robust identification and development and career progression of future talent across our business.

This work enabled us to review our succession plans for the executive committee and business unit management boards. We believe that being able to promote from within is critical so that we can retain specialist skills and experience, especially given the capabilities and expertise that we provide to our clients. Fourteen senior colleagues attended a two-day development centre to enable them to better understand their strengths and development areas. The centres are run by Pearn Kandola and form a key part of our talent development strategy. In addition, 20 per cent of the females who participated in the process are currently taking part in an externally run mentoring programme.

We have increased the investment in our learning academy team and are looking forward to the implementation of a learning management system in the coming months to improve efficiency and provide easy access to learning to all our colleagues. Our focus is on developing programmes for all levels of our management and leadership hierarchy and as part of this 95 team leaders, supervisors and production managers from across the Group took part in a team leader development programme. The four modules covered a range of topics including: the role of a team leader, communication skills, being assertive, dealing with issues and problem solving. Technical and mandatory training continues to be delivered through externally facilitated courses and events, together with a wide range of training courses that are provided internally by our learning academy team.

Our online performance review process, MyPerformance, is continuing to be rolled out across the different levels in our business and enables managers and colleagues to have open, honest conversations about their current performance, future goals, personal development, and career aspirations.

Recruitment, as for most industries, has continued to be challenging this year and we have continued to develop our relationships with local training providers and access government funded support and schemes where applicable providing opportunities to the long term unemployed and those currently struggling to get into work.

Our progress against our targets

Safety first

In 2023, following significant improvements in safety performance in previous years, whilst our accident frequency rate ('AFR') reduced to 0.14 from 0.16, we saw our injury frequency rate ('IFR') increase to 1.61 from 1.49. Although the overall IFR has increased, the result for 2023 reflects improved IFR performance in many areas of the business, including in our manufacturing operations and for our recently acquired Infrastructure business (DAM Structures) which, disappointingly, has been offset by higher IFRs in some areas of our construction operations.

Whilst our safety statistics continue to be industry-leading, we remain committed to continually improving and focusing on leading indicators in our pursuit of 'no harm'. We have updated our behavioural safety programme, which is based on awareness, training, coaching and visible leadership, and have launched our Safer@Severfield initiative, which will further ingrain our culture of employee engagement, commitment and our life saving rules.

Our SHE software management platform remains a valuable database and tool to support and assist our decision-making process to continually monitor and improve our SHE performance into the next financial year.

Our Group management systems remain accredited to ISO45001:2018 (Occupational Health and Safety) and ISO14001:2015 (Environmental Management). During the year, both systems underwent audits, where we maintained our achievement of zero non-conformities, further assurance that we continue to embed robust policies and procedures across the Group. The policies and procedures developed in a way that supports our fair and just culture with no harm to people, premises or planet in line with our Group SHE Strategy.

In addition to the management system certifications, we continue to hold a number of high-level industry accreditations including Constructionline Gold, RISQS (Railway Industry Supplier Qualification Scheme) and Achilles Building Confidence. In the year we have also improved our CHAS accreditation from Advanced to Elite. All of which further confirms our Group's health and safety processes, procedures and commitment meet excellent standards.

Engaging with our people

We recognise the importance of input and feedback from all our people in helping us deliver on our strategic goals, and our MyVoice forum (now in its second year) is key to this.

The forum provides a formal way for colleagues and management to connect, gain feedback and exchange information and views on any business-related topic. The forum operates in the spirit of co-operation and trust. Its aims are to build a brighter future for all at Severfield ensuring voices are heard. Louise Hardy (our designated non-executive director responsible for workforce engagement), Alan Dunsmore (Group CEO) and our Group HR director regularly meet with the forum representatives. These meetings have provided valuable, ongoing insights and feedback for the board.

The forum was of particular benefit to the executive committee in sharing information and gaining feedback on the change to a Divisional Structure, sessions were held with the MyVoice representatives to give them the tools to support the business in the roll out of this change and also to open up feedback channels about the change.

Mental health and wellbeing has continued to be a topic raised by the forum and this has resulted in more individuals coming forward to be trained as mental health first aiders and driven us to improve communication around the benefits of our Employee Assistance Programme (which has seen a significant increase in usage during the year).

The regular feedback from the MyVoice forum gives us insights into how our workforce feel and view our approach to a wide array of topics, in turn it gives us the opportunity to share business updates and address concerns over the impact of external factors with our colleagues in an open forum (such as energy costs and the ongoing situation in Ukraine). We look forward to further strengthening the relationship and working closely with our colleague representatives over the coming year.

Nurturing our unique culture

As part of our ongoing drive to improve internal equity across our Group and create an environment where everyone feels valued and fairly rewarded for the contribution they make, 'pay and benefits' has been an area of focus for us during the year. 2023 was a particularly challenging time with the cost-of-living crisis and the Group has provided support to its colleagues, including one-off cost-of-living payments and enhanced employee benefit packages (enhanced employer pension contributions and the introduction of a private healthcare plan). In addition, our annual pay awards have taken into account ongoing inflationary pressures, and we have implemented higher pay increases for our more junior and lower paid colleagues. All of our colleagues are paid at or above the real living wage.

Delivering on social value

Many of our activities within 'our people' pillar, such as development of future skills, increasing local employability and learning and development, directly contribute to us generating social value within the business. We have spent the last year refining our approach to social value and adopted the National 'Themes, Outcomes and Measures' (TOMs) Framework to measure our social value contribution. Since 2017, the TOMs Framework has been used as the principal tool for reporting Social Value to a consistent standard and based on the Social Value Act's themes of social, economic and environmental wellbeing.

In line with our sustainability framework, the TOMs Framework is aligned to the UN 17 Sustainable Development goals, which we believe helps us measure and quantify our social value impact. As part of our future commitments on all areas of social value both internally and in partnership with our clients, we will establish social value reporting system within the business and set Group and Divisional targets around social value delivery.

Future Skills

Our focus on early careers, to address future skills shortages, has continued to be strong with 4 graduates and 27 apprentices joining us on one of our 'development on a different scale' programmes. We plan to recruit circa 40 apprentices in 2023 across fabrication, maintenance, painting, welding and the drawing office. This commitment to providing opportunities for earning whilst learning secured us the prestigious Gold Member status of 'The 5% Club' which recognises the UK's leading employers of apprentices, graduates and degree placement students. Across the Group we currently employ 62 colleagues who are either on a formal apprenticeship or undertaking qualifications through the apprenticeship route.

The Severfield Foundation

Through the Severfield Foundation ('the Foundation'), incorporated back in 2016, we support local charities and organisations, with strong connections to our colleagues, through charitable contributions and by encouraging our people to donate their time to local communities and charitable initiatives.

Our employees coordinate the Foundation's activities, contributing to and taking part in events. With their help, our vision is to develop the Foundation into a leading trust, which will help and support disadvantaged people and local communities for many years.

Our four-year partnership with national charity partner, Alzheimer's Society, raised over £92,000 and alongside that, we have supported several other local charitable bodies including Yorkshire Air Ambulance, Bolton Hospice, Saint Catherine's, Young Lives vs. Cancer and Air Ambulance Northern Ireland.

In previous years, we have had a national partner charity which received 50 per cent of all annual funds raised. The remaining 50 per cent was divided between our local charities. Moving forward, the Severfield Foundation has now decided to move away from the national partner charity model in favour of a more localised approach, donating 100 per cent of funds raised to charities selected by individual charity committees, these include:

PLC – Martin House Children's Hospice

Dalton – Yorkshire Air Ambulance

Lostock – Bolton Hospice

Bolton – Blood Bikes Manchester

Enniskillen – Supporting a number of different local charities

Sherburn – St Catherine's Hospice

Carnaby – The Hinge Centre

2024 areas of focus:

• Continue to implement the SHE strategy with a focus on people, communication & engagement and systems & processes.
• As a part of our health and safety strategy, we will be introducing a new behavioural safety initiative – Safer@Severfield will be ingrained in all we do, reminding everyone that the safest way is the only way and by doing this we will all be safer.
• Continue to deliver the wide range of internally and externally provided training courses.
• Provide access to a full range of learning and development opportunities through the launch of the MyLearning platform.
• Ensure inclusivity and diversity remains at the forefront of our approaches through utilising the data we now hold on gender, ethnicity, disability, sexual orientation and religion or belief to inform decisions and track progress.
• Ensure all managers and leaders undertake 'dignity and respect' training through our partner EA Inclusion ensuring we create an environment where everyone can feel they belong.
• Continue to support employee-led local community initiatives and developing strong community partnerships for causes close to their hearts.
• Establish social value reporting system and set Group and divisional targets for social value delivery.