People

02 BUY IMPROVE SELL

Promote diversity and prioritise and nurture the wellbeing and skills development of employees and the communities that they are part of

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Our Sustainability improvement objectives

  • We seek to create better funded pension schemes with more prudent targets under our stewardship. Melrose has achieved the 2021 Parker Review target of having one director from an ethnic minority on its Board.
  • Melrose is committed to achieving the Hampton- Alexander Review target in 2021 of having 33% female representation on its Board and has already achieved the Hampton-Alexander Review target of having at least 33% female representation within its Executive Committee and direct reports.
  • Melrose is committed to investing £10 million over five years through the Melrose Skills Fund in order to help build the UK’s industrial base.
  • Our “Buy Improve Sell” business strategy improves financial performance, which in turn contributes to the economic development of the communities in which our businesses operate.
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UN SDG

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The Melrose Code of Ethics reinforces our sustainability principles, and provides employees with clear guidance as to how the Board expects them to conduct business, and the consequences of non-compliance. ​

The Melrose Code of Ethics outlines the policies and procedures in place to drive best practice and to promote diversity and inclusion at all levels. A great place to work For our businesses to perform well and exceed their potential, it is important to nurture an engaged, capable and enthusiastic workforce. We want our people to enjoy the work they do, and to trust that their safety and wellbeing is our priority. We value and champion diversity in its broadest sense and drive our businesses to create working environments that encourage and nurture employees to grow, develop and act with integrity.

Employee engagement

Melrose Skills Fund

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Melrose Skills Fund

The Melrose Skills Fund was launched in 2019 to provide the financing to develop the capabilities required to build the UK’s industrial base, and is utilised by our GKN Aerospace, GKN Automotive and Brush.

With a commitment to invest £10 million over five years through the creation of STEM programmes, apprenticeships and degrees to invest in manufacturing hubs, digital skills, and employee development, Melrose is helping to equip the UK with the future skills it needs to grow its industrial skillset.

Simon Peckham, Chief Executive

Policies & Statements

Chairman's Statement

A great place to work

For our businesses to perform well and exceed their potential, it is important to nurture an engaged, capable and enthusiastic workforce. We want our people to enjoy the work they do, and to trust that their safety and wellbeing is our priority. We value and champion diversity in its broadest sense and drive our businesses to create working environments that encourage and nurture employees to grow, develop and act with integrity

Employee engagement

Melrose Skills Fund

first-aid_248x199.jpg

Melrose Skills Fund

The Melrose Skills Fund was launched in 2019 to provide the financing to develop the capabilities required to build the UK’s industrial base, and is utilised by our GKN Aerospace, GKN Automotive and Brush.

With a commitment to invest £10 million over five years through the creation of STEM programmes, apprenticeships and degrees to invest in manufacturing hubs, digital skills, and employee development, Melrose is helping to equip the UK with the future skills it needs to grow its industrial skillset.

Simon Peckham, Chief Executive

Policies & Statements

Chairman's Statement

Employee engagement

In 2019, Melrose established a Group Workforce Advisory Panel “WAP” to enable key views of the workforce to be heard and considered by our businesses executive teams where they can have maximum impact. The WAP reports to the Board annually to provide visibility and oversight of key workforce views and also to ensure that the WAP and its underlying engagement processes are operating effectively for each business.

Aerospace Wing Of Tomorrow

Melrose Skills Fund

The Melrose Skills Fund was launched in 2019 to provide the financing to develop the capabilities required to build the UK’s industrial base.

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In Focus

The Melrose Skill Fund

Aerospace Wing Of Tomorrow

The Melrose Skills Fund was launched in 2019 to provide the financing to develop the capabilities required to build the UK’s industrial base, and is utilised by our GKN Aerospace, GKN Automotive and Brush businesses.

With a commitment to invest £10 million over five years through the creation of STEM programmes, apprenticeships and degrees to invest in manufacturing hubs, digital skills, and employee development, Melrose is helping to equip the UK with the future skills it needs to grow its industrial skillset.

In 2020, GKN Aerospace developed and delivered new training and digital learning modules to upskill its teams. Foundation topics for digital learning modules such as Introduction to Jet Engines, Aircraft Familiarisation, Geometric Dimensioning and Tolerancing received excellent feedback from the user community. Almost £200,000 was invested on a range of training programmes which have so far been completed by more than 300 people. The Global Technology Centre in Filton has established a Learning and Education Hub where future training programmes will be hosted and active engagement with early careers (schools and colleges) will be pursued. A number of exciting projects are lined up for 2021 to continue to build new skills and capabilities in line with new technologies such as electrification and alternative fuels, and effective use of digital technologies to improve efficiency and add value to our customers.

GKN Automotive has also continued to utilise the Melrose Skills Fund to support its UK Innovation Centre in Abingdon, Oxfordshire, which focuses on developing skills and R&D capability. In 2020, the Skills Development Programme at Abingdon saw two apprentices complete their L3 apprenticeship, one apprentice graduate to an L6 Levy-Funded degree, and four degree students complete their “ABI Year-in-Industry” assignment. A number of internal staff are also undertaking qualifications at the Innovation Centre. In addition to qualifications, the Innovation Centre has supported several other skills development initiatives, including working with local secondary schools on STEM events, and delivering training to nearly 100 external individuals to deliver the VentilatorChallengeUK.

In 2020, Brush utilised the Melrose Skills Fund to enhance internal capabilities and support skills development across a range of topics including leadership skills, project management essentials, and environmental impact assessment training. The business also supported a range of student internships from 12-month placements to summer programmes.

Melrose is also working on a diversity project which is supported by the Melrose Skills Fund with the aim of increasing socio-economic and ethnic diversity within the engineering sector. This project is being led by Enginuity and involves Unite the Union.

Pensions​

With every acquisition, Melrose seeks to strengthen pension scheme arrangements for the benefit of employees and retirees. Since its establishment in 2003, Melrose has contributed £704 million to the pension schemes of its businesses.

With every acquisition, Melrose seeks to strengthen pension scheme arrangements for the benefit of employees and retirees. Since its establishment in 2003, Melrose has contributed £704 million to the pension schemes of its businesses. We take pride in having substantially improved all the UK pension schemes under our ownership, with many of them becoming fully funded on departure from the Group.

For example, under Melrose ownership the McKechnie UK pension scheme was improved from 58% funded at acquisition to more than fully funded upon leaving the Group, and the FKI UK pension scheme was improved from 87% to fully funded upon its departure from the Group. Both of those schemes were sold into Honeywell International Inc., a US-listed group with the financial covenant strength expected of a market capitalisation exceeding $140bn.

People

Pensions

Our focus on strengthening pension schemes begins from when we acquire a new business, and the GKN pension schemes are the latest example of this. The GKN UK defined benefit pension schemes had been chronically underfunded and we were proactive, transparent and constructive in agreeing commitments with pension trustees during the acquisition of GKN. Prior to acquiring GKN, we committed to providing up to £1 billion of funding contributions, doubling annual contributions to £60 million, and providing £150 million of upfront contributions. In our short period of ownership, we have met our commitments and have significantly strengthened the pension schemes and cut the accounting deficit on the GKN UK defined benefit pension schemes by over 80% since just before acquisition.

Our model for ensuring the long-term prosperity of our businesses’ pensions schemes is founded on the following principles: 

  • Improve funding targets to ensure improved financial health for the long-term sustainability of our businesses’ pension schemes. 
  • Increase funding levels to begin an enhanced level of immediate support during our period of stewardship.
  • Provide better structural and financial security to our businesses’ pension schemes during our ownership.
  • Insist on independent chairs to govern our businesses’ pension schemes in accordance with governance best practice.

Securing our employees’ and retirees’ futures through responsible stewardship of their pensions is of strategic importance to the Board.

Diversity and Inclusion

We prioritise creating and maintaining a diverse, inclusive and safe environment within our businesses.

We recognise the importance of diversity in building a high-calibre workforce, and we are committed to championing diversity in the broadest sense, be that along geographical, cultural or personal lines, encompassing gender, race, ethnicity, country of origin, nationality, colour, social and cultural background, religion, family responsibilities (including pregnancy), sexual orientation, age and disability. 

We are actively engaged in finding ways to increase diversity across the Group, and the sectors in which our businesses operate. Melrose ensures that entry into, and progression within, the Group is based on aptitude and the ability to meet set, fair criteria outlined in job descriptions. For any employees with a disability, we take steps to ensure reasonable adjustments are made where required.

Melrose is proud to be a member of the Business Disability Forum, a not-for-profit member organisation that works with the business community to understand the changes required in the workplace for disabled persons to be treated fairly, so that they can contribute on an equal-opportunity basis to business success, to society and to economic growth. The Melrose Code of Ethics highlights the importance of diversity and inclusion and is supported by our diversity policy, which is reviewed and approved each year by our Nomination Committee. The Nomination Committee has ultimate oversight and responsibility for ensuring the diversity policy is adhered to and the individual business executive management teams are responsible for ensuring day-to-day compliance with the diversity policy.

Diversity & Inclusion

Promoting diversity at all levels

Melrose leads its businesses by example, starting at Board level. The Board requests diverse candidates within shortlists, and two of the most important roles on the Board, being the Senior Independent Director and the Chairman of the Audit Committee, are held by a woman. Further, 100% of Director appointments in the past three years have been women(1). As at 31 December 2020, Melrose had 30% female representation on its Board. Melrose had been on track to achieve the Hampton-Alexander Review target of having 33% female representation on its Board by the end of 2020 with the intended retirement of Mr David Roper in May 2020.

However, as a result of the global pandemic, the Board and Nomination Committee agreed that it was not the appropriate time to lose the expertise and experience of one of its co-founders. The Board’s decision to delay Mr Roper’s retirement was the reason that Melrose did not achieve its goal of 33% female Board members by the end of last year as intended. Melrose is committed to achieving the Hampton-Alexander Review target in 2021, and in anticipation of Mr Roper’s retirement, it has started the process of recruiting for a new female Non-executive Director.

 

Gender diversity within the Melrose Group Board

  At 31 December 2020 At 31 December 2019
  Male Female Male Female
Board(1) 7(70%) 3(30%) 7(70%) 3(30%)

Talent and Career Management


Skills development 

Melrose champions talent development and recognises the importance of investing in human capital. Our businesses are proactive in anticipating both short and long-term employment needs and skills requirements for the long-term success of their business.

This is central to Melrose’s strategy to boost productivity and improve business performance. Extensive training opportunities are available and promoted to all workers at all stages of their careers to ensure that high skills levels are cultivated and maintained across the Group.

We are committed to promoting employee career development and life-long learning. Training programmes across the businesses start with new-hire onboarding programmes to accelerate knowledge and exposure to the business’s culture and objectives.

All employees are encouraged to actively engage in their career development and a wide range of learning opportunities are available throughout their career, extending beyond functional skills development to personal development and leadership opportunities. Leadership training is an integral part of ensuring the workforce remains engaged and innovative, whilst enabling the businesses to develop a diverse pipeline of successors for key roles and leadership positions. 

The businesses have developed their own leadership programmes that are most relevant to their employees and organisations. However, there are elements that are consistent across all businesses.

Annual talent reviews and regular check-ins between managers and employees identify individuals who have the ability and aspiration to grow into more stretching roles. Leadership training programmes are in place for high performing employees to support their transition from individual contributor to first leadership position and beyond. The programmes are becoming increasingly popular and have received positive feedback. 

People

Skills development

GKN Aerospace launched its Lean Learning Academy in 2020, with the curriculum designed to provide frameworks to improve performance and reduce inefficiencies using the Lean Six Sigma principles. In 2020, 853 people were trained, and 698 achieved certification on Lean capabilities. In 2021, the plan is to certify over 3,000 people at Lean Foundation level, over 750 people at the Lean Advanced level, over 500 at the Six Sigma Green Belt level and 50 at the Six Sigma Black Belt level.

In-person training programmes were largely put on hold in 2020 due to COVID-19, which caused a decline in both overall training hours and spend on training. Online training was adapted to focus on supporting the remote workforce, with modules such as ‘leading remote teams’ and ‘driving collaboration remotely’ introduced in a number of businesses. We expect our businesses to build on their flexible delivery programmes to improve their training engagement levels in 2021.

Training and development

  2020 2019 2018 2017 2016
Average training time per employee (hours)(1) 13 15 3 9 -
Average training spend per employee (£)(2) 166 222 126 142 152
Total number of training hours(3) 338,406 410,638 39,823 37,951 -
Total annual spend on workforce training (£)(4) 8,591,293 1 12,182,473 1,200,461 1 1,377,247 300,025

(1) Data was collected from 38% (by headcount) of the Group in 2017, 21% (by headcount) in 2018, 25% (by headcount) in 2019 and 39% (by headcount) in 2020. Data was not available in 2016.
(2) Data has been collected from 99% (estimate of spend as only AQH Zephyr Pacific location and Melrose head office not included) of the Group.
(3) Data was collected from 38% (by headcount) of the Group in 2017, 21% (by headcount) in 2018, 25% (by headcount) in 2019 and 39% (by headcount) in 2020. Data was not available in 2016.
(4) Data has been collected from 99% (estimate of spend as only AQH Zephyr Pacific location and Melrose head office not included) of the Group

Apprenticeships and graduate programmes

Apprenticeship programmes assist with training a new generation of employees and help to ensure that knowledge is retained within the businesses. In 2020, 728(1) apprenticeships were in place across the Group businesses, of which 96% were within the GKN Aerospace, GKN Automotive and GKN Powder Metallurgy divisions.

728

Apprenticeships across the Group

17%

Female apprentices in GKN Aerospace
Bristol’s apprenticeship programme

 

GKN Aerospace sits on the Aerospace Trailblazer Apprenticeship Employer Group to help shape future apprenticeships and is also an employer partner for the West of England Institute of Technology, which focuses on advanced engineering and high value manufacturing.

GKN Aerospace’s Filton and Western Approach schools’ engagement team have been working on activities to recruit more female apprentices over the last four years. As a result, within the GKN Aerospace Bristol apprenticeship programme, 17% of the overall apprentice population is now female. In recognition of their strong commitment and continuous improvement of their apprenticeship programmes, GKN Aerospace’s Filton and Western Approach UK sites were named ‘Large Employer of the Year’ for the sixth consecutive year, and one of its apprentices was awarded ‘Outstanding Apprentice of the Year’ in each case in the 2020 Bristol & Bath Apprenticeship Awards.

(1) Data has been collected from 92% (by headcount) of the Group.

In Focus

The Melrose Skill Fund

Aerospace Wing Of Tomorrow

The Melrose Skills Fund was launched in 2019 to provide the financing to develop the capabilities required to build the UK’s industrial base, and is utilised by our GKN Aerospace, GKN Automotive and Brush businesses.

With a commitment to invest £10 million over five years through the creation of STEM programmes, apprenticeships and degrees to invest in manufacturing hubs, digital skills, and employee development, Melrose is helping to equip the UK with the future skills it needs to grow its industrial skillset.

In 2020, GKN Aerospace developed and delivered new training and digital learning modules to upskill its teams. Foundation topics for digital learning modules such as Introduction to Jet Engines, Aircraft Familiarisation, Geometric Dimensioning and Tolerancing received excellent feedback from the user community. Almost £200,000 was invested on a range of training programmes which have so far been completed by more than 300 people. The Global Technology Centre in Filton has established a Learning and Education Hub where future training programmes will be hosted and active engagement with early careers (schools and colleges) will be pursued. A number of exciting projects are lined up for 2021 to continue to build new skills and capabilities in line with new technologies such as electrification and alternative fuels, and effective use of digital technologies to improve efficiency and add value to our customers.

GKN Automotive has also continued to utilise the Melrose Skills Fund to support its UK Innovation Centre in Abingdon, Oxfordshire, which focuses on developing skills and R&D capability. In 2020, the Skills Development Programme at Abingdon saw two apprentices complete their L3 apprenticeship, one apprentice graduate to an L6 Levy-Funded degree, and four degree students complete their “ABI Year-in-Industry” assignment. A number of internal staff are also undertaking qualifications at the Innovation Centre. In addition to qualifications, the Innovation Centre has supported several other skills development initiatives, including working with local secondary schools on STEM events, and delivering training to nearly 100 external individuals to deliver the VentilatorChallengeUK.

In 2020, Brush utilised the Melrose Skills Fund to enhance internal capabilities and support skills development across a range of topics including leadership skills, project management essentials, and environmental impact assessment training. The business also supported a range of student internships from 12-month placements to summer programmes.

Melrose is also working on a diversity project which is supported by the Melrose Skills Fund with the aim of increasing socio-economic and ethnic diversity within the engineering sector. This project is being led by Enginuity and involves Unite the Union.

Production 1

Community partnerships

Our businesses promote the social wellbeing of employees by encouraging them to actively contribute to local charitable and community projects, and lead by example through the sponsorship of such projects. The Group made cash donations to not-for-profit charitable organisations(1) in 2020 of £634,221 (2019: £799,196; 2018: £312,485). The Group made cash expenditure to community projects(2) in 2020 of £532,613 (2019: £229,038, 2018: £113,441).

(1) Data was collected for 84% (by administration expenses) of the Group in 2018, 64% (by administration expenses) in 2019 and 62% (by administration expenses) in 2020.
(2) Data was collected for 73% (by administration expenses) of the Group in 2018, 65% (by administration expenses) in 2019 and 100% (by administration expenses) in 2020.

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People

Community Partnerships


Filter for Life

Our businesses are focused on giving back to their local communities and providing volunteer opportunities for employees. A great example of this is Nortek Global HVAC’s partnership through its Nortek Air Solutions division with the charitable organisation Center of Family Love (CFL).

Nortek Air Solutions provides career opportunities to more than 130 adults with physical and intellectual disabilities through the Filter for Life (FFL) centre in Kingfisher, Oklahoma. Residents who work at the FFL facility hand make air filters in a variety of custom sizes. The programme gives residents an opportunity to develop and grow their skillset while making a positive impact on their community. Nortek Air Solutions has donated equipment, and employees have assisted in projects to improve workflow and efficiency at the FFL facility.

Employees have also volunteered in other areas of CFL’s campus. This has included providing mentoring to residents, cleaning up debris after a storm, and designing a visiting booth to allow residents to safely visit family during the COVID-19 pandemic.

Some more examples of how our businesses are giving back to their local communities:

GKN Aerospace and GKN Automotive were at the heart of the VentilatorChallengeUK consortium of manufacturing companies making desperately needed medical ventilators for NHS hospitals, enabling staff to care for patients worst affected by COVID-19. Employees worked around the clock at no profit to the business and the relevant teams delivered more than 13,000 ventilators, an incredible 12 years’ worth of normal production in 14 weeks.

Melrose is a proud sponsor of the work being conducted at Newcastle University on the Human Cell Atlas project. The aim of this project is to create a comprehensive reference map of all human cells for a better understanding of human health and diagnosing, monitoring and treating disease.

GKN Powder Metallurgy supports an extensive list of local charitable causes and community projects, with employees encouraged to volunteer their time and expertise. In 2020, the company contributed around £180,000 through cash donations and community spend.

In August 2020, Nortek Global HVAC launched the ‘Nortek Gives’ community service initiative, which encourages each employee to live out its mission statement of Creating a Better Tomorrow Every Day by providing one community service day each year for each employee to give back to the communities in which they live, work and play. As an example, project engineers from the Montreal, Canada site led a virtual engineering workshop to encourage high school students to pursue a career in the field. Students were tasked with building beehives to help increase the presence of wild bees near the crops they pollinate. As would be the case in a commercial engineering project, students were guided on how to overcome financial and technical constraints.