Cast your mind back to the mid-nineties. The internet was in its infancy and the only ways to hire staff in shipping were to place an advert in the newspaper or by word of mouth. HR departments were a rarity and those that did have the function often called it personnel and staffed it with people pushed into the role from somewhere else in the business.
Nearly thirty years on, things have changed beyond all recognition. The internet, diversity, equity and inclusion, globalisation, ESG and a general improvement in workplace behaviour have all moved the needle.
“There has been a clear change from HR as an administration function to having a more strategic focus working alongside (often as part of) senior management,” according to Pål Egeland, Director of HR at Saga Welco who has been working in shipping for 15 years.
The shift from no HR to embracing HR as a strategic function was kick-started by the dot.com boom in 1999/2000 when a plethora of new companies were set up overnight. “They hired whole swathes of shipping people, enthusing them with tales of imminent radical change,” says Phil Parry, Chairman of maritime HR experts Spinnaker.
“The dot.com era suddenly increased demand for experienced shipping staff, the new companies tended to come in with backers from outside of shipping and they brought with them proper HR people and processes. Words like disintermediation became commonplace …but the brokers are still here. I think shipping recruiters and the publishing industry were the only people to make any money out of that period. Remember shipdesk, shipserv, onesea and maritime direct?
“The dotcom boom was soon followed by the market boom from 2001-2008 and this changed the landscape forever. The demand for staff went through the roof – superintendents, chartering staff, operations staff, you name it.”
Growth paved the way for professional HR teams. Most HR professionals coming into shipping felt like they’d stepped back in time. It took a while, but HR in shipping is now unrecognisable.
Dawn Robinson, now Director of Merger Transition at NorthStandard, and previously North’s Global People Director, explained that “HR and People departments add support and a wider context around true inclusive behaviour. They also offer guidance for leaders on dealing with people from many different angles and perspectives.”
Modern business leaders tend to see HR as their right hand, significantly responsible for setting the right tone when it comes to company culture. “It stands to reason that if ‘people’ are the biggest challenge for a leader that a professional empowered HR team is the solution,” says Parry. “Post-covid every sector is struggling to find enough good people and so the critical business focus is on training and retaining them. Company culture and purpose, both corporate and at the individual level, are the hot topics on the lips of CEOs nowadays. It’s not enough to have a trading strategy without a people strategy anymore.”
Maritime HR Association
One of the first requests HR professionals made when joining the shipping industry was for reliable salary data. According to Teekay’s Jim Basterfield, his fellow industry HR Directors would throw their hands up and ask how they were supposed to advise their boards on remuneration in an industry that didn’t share.
Teekay were one of the founding members in 2005 of the Tanker HR Forum,
which was set up by a group of shipping HR Directors from the tanker sector who were determined to change what they saw as a closed shipping mindset. They had all joined the industry from other sectors and said that it felt like stepping back in time.
They set up the Forum as a confidential association for discussing and exchanging remuneration data and HR best practices and trends. Unlike other industries, it was unheard of for shipping companies to share information on remuneration and HR practices. This meant pay and rewards were set based upon incomplete gossip and hearsay.
Now known as The Maritime HR Association, the membership club still exists today and boasts more than 100 global shipping company members including Teekay, Saga Welco and Stolt. They meet annually at a two-day conference to compare HR best practice and glean the latest trends from speakers from the HR world. The P&I sector has followed suit with its own regular benchmarking and there is also the Seafarer Employers’ Association which benchmarks crew wage costs.
NorthStandard’s Dawn Robinson says that “salary benchmarking has really helped our Clubs to be able to assure our people that we are constantly aware of the market and responding appropriately with our reward strategies.”
Pay data is now a sophisticated business whereby employers can look up pay for specialist jobs in shipping, in specific locations, and compare their own pay to market percentiles. Anti-trust rules apply to pay benchmarking, meaning that all data must be aggregated anonymously and can only be reported based upon strict criteria.
The Reward Industry is big business in and of itself. To put it into perspective, the merger between insurance broker Willis and HR consultancy Towers Watson in 2015 to create Willis Towers Watson was a merger of equals which created a business with a combined value then of $18 billion.
“It’s not necessarily about being the best payer in the market,” explains Lucy McQuillan of the Maritime HR Association. “Staff will leave a company that they perceive to be paying unfairly, that’s for sure. But they will stay with companies that treat them well, give them purpose and the opportunity for career progression even if the pay is competitive but not the best. By definition there can only be one top payer of course and even within one company the pay can vary widely. What good benchmarking data does is give employers the tool to position themselves as an organisation and their employees as individuals in the right place in the market.”