Transcript AREVA - HEC Paris

AREVA
Best in France Case Study
January 2005 – June 2005
Jennifer Chuppe
Miguel Diez-Blanco
Chen Guo
Alessandro Pagella
Roger Pelaud
Executive Overview
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The objective of this study is to understand how a major French public
company adapts its domestic HR strategy to attract and retain talents
abroad
The focus is on the US and China
The HR strategy is very much in line with the company’s strategy
Internationalization of the group operations is very much facilitated by
HR strategy
The purpose of this presentation is to detail the triggers that enable a
major company to be more efficient abroad thanks to their HR approach
and perspective
In a nutshell, let’s discover the best of HR practices acting as an engine
for the company mid to long term policy and need for
internationalization
AREVA
We bring solutions for electricity
production and delivery
Number 1 in the world for nuclear energy
Number 3 for electricity transmission and distribution
Number 3 in connectors
AREVA’s Mission
 Innovate to contribute to an ever cleaner, safer and
economical way to produce and deliver electricity.
 Basic principles :
 Profitable growth : Client satisfaction, economic
and financial performance, innovation and R&D.
 Socially responsible : Involvement, dialogue and
consensus-building, community involvement.
 Respect for the environment : Risk management
and prevention.
The AREVA Company
 Simplified legal organizational chart
1
2
FRONT END
DIVISION
AREVA’s 5 businesses
3
REACTORS &
SERVICES
DIVISION
C
BACK END
DIVISION
C
4
5
TRANSMISSION &
DISTRIBUTION
DIVISION
CONNECTORS
DIVISION
F
C
Fi
F
C
C/F
T
T
T
Communications
Data Consumer,
Automotive,
Electrical power
interconnect,
Micro-connections
[C] COGEMA
[F] Framatome ANP
[T] AREVA T&D
[Fi] FCI
Key Figures
2004
2003
2002
 Sales
 Consolidated Net Income
 Workforce
11 109 M
428 M
71 59
Sales by activity
Sales by region
(In millions of € )
Front End Division
1 338
12 %
2 683
24 %
Europe & CEI
Reactors &
Services Division
2%
19 %
Americas
Back End Division
2 859*
26 %
2 124
2 023
19 %
19 %
Transmission &
21 %
Distibution Division
Connectors
Division
Asia-Pacific
58 %
Africa
Workforce
20 principaux pays (sur 70) = 94 % des effectifs
Who are the company’s clients?
ENERGY DIVISION
Nuclear
T&D
Integrated electric utilities
Transmission companies
Major consumers of electricity
Who are the company’s clients?
CONNECTORS DIVISION
Telecom Market
IT Market
OEMs
EMS
What are clients’ expectations?
 Receive products, services and expertise enabling them to grow
while meeting their responsibilities with regard to their own
stakeholders
 Receive what is promised
 Respect for their culture and protect their image and their
interests
 Protect their data and know-how with the same degree of care
as if they were Areva’s own, to the fullest extent of the law and
regulatory requirements.
The importance of France
 France still represents
29% of their sales
revenues.
 The largest customer, EDF,
represents less than 20% of
the Group’s consolidated
sales revenue.
 France still is, and will
be, a key factor for
AREVA’s core business.
Company values
 AREVA’s values are the group’s commitment to its
customers, its employees, its shareowners and all of
the communities in which AREVA plays a role,
directly or indirectly. These values are:
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CUSTOMER SATISFACTION
PROFITABILITY
RESPONSIBILITY
INTEGRITY
EXCELLENCE
SINCERITY
PARTNERSHIP
Company values
 These values are rooted in the conviction that rigorous business
ethics are integral to strong financial performance
 As a French company, Areva has no problems to encourage
these values in France
 Globally, Areva ensures that these values are
instilled by means of the AREVA values charter
counting on every person belonging to the company,
regardless of his/her duties, affiliate or country, to
put the company values into practice, to defend them,
and to promote them.
Areva’s Global HR Policy
 France still most employees
 French company
 Government owned
 Unique culture
 Hiring: 70% engineers
 No extraordinary high compensation, but
 Opportunity to develop
 Talent cultivation
 Areva-University (focus on top-level management)
 Formal, both locally and internationally focused courses for
each hierarchy level of management
 Training centers in France, U.S., France
 First time: expression of the HR policy in the annual report
Areva’s Regional HR Policy
 Most important countries
 Europe: France & Germany
 USA
 China !
 France & Germany: steady/declining number of employees
 Germany: political climate unfavorable concerning nuclear
plants
 USA: Trying to hire high-potentials, but difficult to compete with
other companies (i.e. GE, Westinghouse) due to
 Salary offered by competitors
 Fact, that it is a French government-owned company: no stock
options.
 Agreements with MIT: knowledge center
Areva’s Regional HR Policy:
challenges
 Europe: shaping talent, talent building
 Asia: talent development and retaining
 USA: knowledge management, compensation and benefit
Areva’s Regional HR Policy - China
 Clear Focus on China
 Chinese Market seen as key-market, because of proximity to
customers (note: not primarily because of lower labor costs!)
 Trying to attract mainly Chinese high-potentials, who have
been studying abroad, preferably in France
 Key characteristics: well-known schools, international
exposure, native Chinese speakers, mobility
 French language is an asset
 Problematic: high employee turnover rate!
 Compensation system very different in China
 Employees demand benefits apart from salary, such as
pension plans for parents, housing assistance, etc.
Key Constraint Costs
 Costs important for site and operational business –
movement towards low cost
 HR will not be outsourced since it is important from a
strategic standpoint for Areva to have a global HR policy as
well as regional management to address specific cultural
differences
 Tradeoff between cost and quality – prefer to produce in
‘low cost’ country, but must maintain a high level of
quality – complex tasks completed in France
 Compensation varies by region to account for various
cultural differences
 Example: in China there is a movement to offer a benefit
whereby the employee’s parent is offered retirement benefits
(Areva has not implemented this as of yet)
Key Benefits
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Areva wants to be close to their clients (i.e. Asia, Americas) while
maintaining their roots as a French company
 Currently building expertise in Asia
 Operations in France and Germany are higher cost in comparison
to other regions
Company is owned by the French government but does not have
assistance from ‘local governments’ in the regional (international)
locations
Recruiting in France is easier in comparison to other region thanks to
Areva’s strong brand
 Striving to improve and educate other regions about the Areva
brand
Key learnings and recommendations
 “Think global, act local” applicable to HR
 Transition to become a global player driven by HR
 Learn about local nuances and competitive
advantage, hence focus
 HR can tackle competition from the recruitment
point of view
We Thank
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For their contribution, support and trust
Mr. Frédéric Thoral, Vice President Human Resources and
Managerial Communication
Mr. Henry Dufourmantelle, corporate Campus Management
Director
Their input was exhaustive and acted as a trigger for further
and deeper understanding of the HR strategic role