Relation­ships with employees

The personnel management system of Kazakhtelecom JSC is regulated by the activity of the Personnel Management and Development Department. The main objectives of the Department are to increase the level of efficiency, development of personnel and corporate culture among Kazakhtelecom JSC’s employees.

Relations with employees in the Company are built up on the basis of the Personnel Policy of Kazakhtelecom JSC concept aimed at developing and enhancing efficiency of approaches to personnel management, including competitive level of salaries and other types of financial incentives, as well as opportunities for realization of professional potential and personal development and increasing the level of social support of its employees.

Kazakhtelecom JSC strictly complies with the requirements of the labor legislation of the Republic of Kazakhstan and the principles of selection, development, and provision of decent working conditions for all its employees. The Company strives to improve organizational mechanisms and procedures of HR-function in the field of employment. In 2022, the document “Rules for selection of Kazakhtelecom JSC’s personnel” that provides for the main areas of interaction and responsibility of the Company to its employees was updated.

Training and development of employees is managed by a structural subdivision of the HR system — Employee Experience Management Service. Organization of its activity is based on the following internal documents of the Company:

• Knowledge Management Rules of Kazakhtelecom JSC;
• The Employee Experience Strategy of Kazakhtelecom JSC;
• Rules of Formation and Training of Kazakhtelecom JSC’s Personnel Pool.

In 2022, the responsibility of the HR Director was centralized, aiming to summarize the areas of responsibility of his subordinate business units (Remuneration and Organizational Effectiveness Service, Employee Experience Management Service) to achieve high results for the Company. In addition, the functional responsibilities of the HR Director were supplemented and updated, including the quantitative indicators of the scope of activities:

• Salary fund of Kazakhtelecom JSC with its subsidiaries;
• Number of employees;
• Labor productivity of the Company with its subsidiaries;
• Attractiveness of the employer in the labor market (employer brand);
• Involvement and loyalty of the personnel;
• Staff turnover;
• Use of methods allowing to evaluate the candidates by criteria;
• Employable talent pool.

As of December 31, 2022, the listed number of Kazakhtelecom JSC employees amounted to 19,979 persons, most of them working on a permanent and full-time basis.

In terms of age category, the main share of employees is represented in the group from 31 to 50 years old — 51.5%. The number of employees over 50 years old is 25.6% of the total number of personnel. The share of young people under the age of 30 is 22.9% of the total number of personnel. The share of male employees is 63%, women 37%.

Compared to last year, in 2022, a woman was included in the Management Board of Kazakhtelecom JSC, and the share of women made up 25% of the total number of members of the Management Board.

In the reporting period, the number of the Company’s employees working under termless labor contracts made up 19,535 out of the total number of personnel. The number of permanent and temporary employees varies significantly by regions of Kazakhtelecom JSC’s presence.

In 2022 the number of employees of Kazakhtelecom JSC working on a full-time basis made up 19,710 people out of the total number of personnel, with the number of male employees making up 12,358 people, female employees — 7,352 people. In the reporting period the Company had 509 part-time employees, including 369 men and 136 women.

The recruitment procedure in Kazakhtelecom JSC is carried out in accordance with the document “Rules of Selecting Personnel of Kazakhtelecom JSC”. Recruitment for vacant positions and working professions in the Company is carried out by structural divisions of the General HR Service Center and Employee Experience Management Service. In its activity, the Company applies the following principles of personnel selection:

• recruitment planning based on business needs;
• clear and transparent selection criteria based on the requirements to the position and the Competence Model;
• transparent tender procedures;
• professionalism, personal qualities of the candidate and his/her compliance with the qualification requirements and competencies for the position;
• reasonableness of decisions taken based on the meritocracy principle;
• use of candidates evaluation methods that are relevant for each position, making it possible to make objective decisions when hiring personnel;
• non-discrimination, professional, open and respectful attitude towards all candidates;
• compliance with laws of the Republic of Kazakhstan;
• rational use of resources for attracting and recruiting personnel.

Personnel selection is carried out on a competitive basis. In-house candidates, including those in the personnel reserve, have priority when filling a vacant position. Applicants for search and selection of qualified specialists can be:

• employees of the Company, including reservists included in the personnel reserve of Kazakhtelecom JSC;
• employees of Kazakhtelecom JSC’s group of companies; ;
• employees of Samruk-Kazyna JSC group;
• candidates participating in the competition for the vacant position;
• graduates of universities, senior students.

If necessary, external candidates are selected. The Company uses the following sources and tools to search for potential new employees:

• electronic database of resumes formed by the Company;
• specialized sites with resume databases (Qyzmet.kz., Kz.jooble.org and others);
• social networks (Facebook, LinkedIn and others);
• business contacts, recommendations;li>
• electronic database of graduates of young professionals / talent management programs implemented by the Company / Samruk-Kazyna JSC;
• electronic database of candidates formed on the Unified online recruiting platform Samruk Qyzmet (https://qsamruk.kz/).

In 2022, the Company hired 2,174 new employees. Among them are 105 candidates selected from the Company’s Talent Pool. Most of the newly hired employees are less than 30 years old.

The ratio of newly hired employees in 2022 was 0.11%. Compared to 2021, the share of newly hired employees increased by 22.2%.

Moreover, in 2022, the Company continued implementing internship programs for graduate students with a view to attracting and subsequently employing them in the Company. One of the regulatory documents on attracting students is the “Rules for organizing and attracting students for internships under the PROTelecom program. In 2022, the Company continued the PROTelecom program, within the framework of which more than 600 students were admitted to the internship program. As a result of the program, Kazakhtelecom JSC recruited 201 new employees. We always welcome new colleagues and are confident that young specialists will make a great contribution to the Company’s development and success.

In addition, in the reporting period, Kazakhtelecom JSC implemented the Telecom Data Factory internship program aimed at theoretical and practical training of 3-4 course and master’s degree students, as well as recent graduates of higher education institutions in the field of data analytics. As part of this program, students mastered courses in Python for data analysis, Structured Query Language, Business Intelligence tools. Based on the results of the program, the students with the best results were awarded and offered employment with the Company.

All information about contests and the beginning of internship program is posted on the corporate website. Apart from Kazakhtelecom JSC’s internship programs, the Memorandum of Cooperation with Kazakh-British Technical University, Nazarbayev University and KIMEP University continued to operate in 2022. In the reporting year, a new Memorandum of Cooperation was signed with De Montfort University Kazakhstan.

In 2022, the Company continued implementation of the “Talent Management” project aimed at forming and training a talent pool.

Through this project, the Company identifies and retains talented employees with a high level of professional skills development. Within the framework of the project, the School of Leadership functions — a program in which reservists undergo stage-by-stage training in developing managerial and leadership competencies. Within the framework of the School of Leadership, a comprehensive Management Skills Training Program has been developed, which includes a complex of training events for the development of universal management competencies and leadership qualities of reservists.

One of the key documents regulating the process of formation of the talent pool is the Rules for formation and training of Kazakhtelecom JSC’s talent pool.

During the reporting period, the number of vacancies filled by employees from the talent pool was 106.

¹³ The personnel turnover rate is defined as the ratio of the number of employees whose employment was terminated by agreement of the parties and/or for negative reasons to the average number of the Company’s personnel for the year.

The staff turnover rate in 2022 was 0.13. Compared to 2021, it decreased by 23.3%. This indicator demonstrates the development and improvement of practices in the field of recruitment, motivation, and retention of Kazakhtelecom JSC’s personnel in the reporting period.

In 2022, the following types of social benefits were provided to Kazakhtelecom JSC’s employees as part of social support measures¹⁴:

• life insurance;
• health care;
• parental leave;
• retirement provision.

¹⁴ All types of benefits were provided under open-ended and temporary employment contracts entered into with employees, regardless of the type of employment for the year.

According to the Labor Code of the Republic of Kazakhstan, the minimum notice period for employees upon termination of employment contracts in connection with the reduction of headcount or staff is 4 weeks (30 calendar days). In accordance with the Collective Bargaining Agreement approved in Kazakhtelecom JSC, this period is increased as compared to the minimum legal requirements and amounts to 45 calendar days.

The number of employees who went on maternity leave at the end of the reporting period was 892, and the share of women was 96.5%.

In the reporting period, the retention rate and the rate of employees returning to work after the end of their leave were 100%.

The rate of return of employees — employees who were supposed to return after the parental leave in 2022 — 100%.

Retention rate of employees — employees who returned after parental leave in the last reporting period and continued to work in 2022 — 100%.

Kazakhtelecom JSC developed Kazakhtelecom Knowledge Management Rules, which are the key document that regulates the work in the field of training and development of employees. In 2022, more than 23,521 employees were trained in the following areas: Leadership academy, EX academy, HSE&ESG academy, Service and Sales academy, Technical academy, IT academy, Qazaq&English academy, financial academy, Jas academy.

¹⁵ Average number of training hours per category employee = Total number of training hours provided for each category of employees / Total number of employees in the category.

In addition, in accordance with the Employee Experience Strategy, the number of training hours per employee of the Company was approved. In 2022, this target was set at 61 hours per employee. The actual average number of training hours per employee per year in 2022 was 75.35 hours for men and 84.15 hours for women.

The performance management system in Kazakhtelecom JSC consists in setting clear, measurable goals and objectives for a corresponding period in the form of key performance indicators (KPI), on the fulfillment of which the remuneration depends. The system of individual development plan (IDP) is also introduced, which gives each employee an opportunity to focus on development of his/her knowledge and skills, increase personal efficiency and effectiveness.

Performance assessment allows us to determine the requirements for the results of work, skills, knowledge, and competencies of employees to achieve the strategic goals of the Company. In the reporting period, regular performance evaluation covered 530 employees, which is 21.7% less than in 2021.

Management of the KPI system is aimed at achieving the Company’s strategic goals defined in the Strategy, Business Plan, and other governing documents, and covers long-term, medium-term and operational planning.

Employees are responsible for achieving results in the main areas of activity and controlling their fulfillment of strategic goals, objectives, and initiatives. The Company monitors the balance between financial and non-financial KPIs. There is an obligation to monitor and evaluate the achievement of the planned KPIs on a regular basis (quarterly/annually), including factor analysis and development of recommendations.

The performance planning and assessment cycle is aimed at continuous management of the employees’ performance during the current calendar year. The main condition for the payment of remuneration based on the results of the reporting period is the consolidated final profit, calculated considering the planned amount for the payment of remuneration.

In 2022, the Company introduced the following changes in performance assessment:

• Rules on current and quarterly bonus payment to employees of Kazakhtelecom JSC’s affiliated branches were developed;
• The Company introduced the system of quarterly bonuses — quarterly KPI for employees of affiliated branches, in accordance with the Rules for current and quarterly bonuses;
• The process of setting and calculating the labor participation rate (LPR) was automated;
• A new scheme for calculating the LPR has been approved — both increasing factors (early and high-quality performance of production tasks, urgent tasks, demonstration of responsibility, additional work for an absent employee, assistance to other employees in performing production tasks, mentoring , etc.) and decreasing factors (violation of labor discipline, violation of task completion deadlines, poor quality of work, presence of reasonable complaints from subscribers/clients, violation of safety regulations, etc.) have been introduced affecting the LPR of Kazakhtelecom JSC employees.

On a regular basis (quarterly), HR managers of Kazakhtelecom JSC’s divisions and branches hold meetings with employees on social and labor relations, wage fund, social support to identify key issues of employees, as well as work on improvement of the identified problems with the participation of trade unions and the Ombudsman.

In addition, the Company has set up a feedback mechanism for all employees and top management on all issues of interest to them in the form of an online conference. The mechanism includes the following procedures:

• initial collection of a pool of questions;
• moderation of the pool of questions by the Communications Department of Kazakhtelecom JSC;
• live chat with the Chairman of the Management Board.

When social and labor conflicts arise, the Company creates special commissions for thorough consideration of appeals/complaints, the management travels to the places with the involvement of local trade unions and the Ombudsman. Based on the results of the commission’s work and meetings of management with labor collectives, measures are developed to solve problematic issues.

The Samruk-Kazyna Group of Companies performs annual monitoring of the social situation at production facilities. To timely identify hidden social tension and manage this process, Kazakhtelecom JSC and PI Center for Social Interaction and Communications are conducting sociological research of Samruk Research Services (SRS). Based on the results of the survey, in accordance with the recommendations of sociologists, the Action Plan for working on the concern zones is approved on an annual basis.

In 2022, the Center for Social Interaction and Communications conducted a study of the SRS index, according to the results of which the total value was — 67%, with the threshold value of Kazakhtelecom JSC KPI — 68%.

The aggregate SRS is integrated from three indices:

• Engagement Index — high level;
• Social Wellbeing Index;
• Social Security Index — stable level.

The engagement index measures the level of satisfaction with working conditions and safety, relations and communications at the Company, and the level of loyalty of employees.

The Social Security Index reflects the level of tension between management and subordinates, as well as the level of protesting potential (likelihood of meetings and strikes).

Based on the analysis of the results of the SRS for 2022, it should be noted that the Company has performed systematic and successful work to ensure comfortable and safe working conditions, as well as to maintain healthy and constructive relations in the teams. Based on the results of the SRS, to improve employee satisfaction with the level of working conditions, the Company has approved an Action Plan to work on the areas of concern for 2023.

The social policy of Kazakhtelecom JSC stipulates the development and implementation of social programs that facilitate the resolution of a set of administrative and management tasks aimed at attracting and retaining qualified competitive employees, as well as social support for certain categories of employees.

The following areas of social policy are implemented at the Company:

• income policy;
• policy on cooperation with trade unions;
• social support policy.

The social security of the Company’s employees and pensioners is an essential component of its social policy.

The percentage of the Company’s employees covered by the collective agreement is 96%. Pursuant to the Collective Agreement, the Company provides the following types of social support, regardless of the nature of the employee’s employment (permanent or temporary):

• material assistance in registering a marriage;
• material assistance in connection with the birth, adoption and adoption of a new-born child;
• material aid for recovery when granting annual leave;
• payment of social benefits on temporary disability;
• payment of additional maternity leave until the child reaches the age of 18 months;
• a lump-sum benefit if the employee has established a disability of 1 or 2 groups;
• material assistance for the organization of funerals in connection with the death of a close family member of an employee;
• provision of medical assistance to employees under voluntary medical insurance;
• payment of a lump-sum benefits to a retired employee.

Provision of social support to employees not covered by the collective agreement is carried out in accordance with the labor legislation of the Republic of Kazakhstan.

In addition, branch employees in grades A8-B4 receive social support in the form of reimbursement of the cost of their children’s graduation tuition (not including living expenses and meals) at a secondary special educational institution/higher education institution receiving their first secondary/higher education and having for the previous course of study:

• a traditional GPA of at least “good” (range 70-100);
• or a GPA of at least 2.33.

Kazakhtelecom JSC also provides social support to its employees under the Collective Agreement of Kazakhtelecom JSC concluded trilaterally with industry trade unions, including:

• material assistance for employment leave;
• temporary disability benefits;
• lump sum on early retirement;
• payments in connection with the birth of a child;
• payments to provide assistance in various life situations.

In addition, the Collective Agreement of Kazakhtelecom JSC regulates support programs during the transition period designed to help maintain employment opportunities and manage career endings because of retirement or reduction of the Company’s employees. Within it, the Company provides the following types of support:

• in accordance with the laws of the Republic of Kazakhstan, the Company ensures the transfer of redundant employees to available vacancies in a similar position, relevant qualification, specialty or profession;
• employees with whom the labor contract was terminated due to reduction of headcount/staff, who have uninterrupted work experience in the Company at the time of termination of the labor contract of not less than 20 years, are subject to registration as pensioners of the Company upon reaching the retirement age, provided that they did not work in other organizations after termination of the labor contract with Kazakhtelecom JSC;li>
• when optimizing the number of employees, the Company undertakes, by the decision of the Company’s bodies and/or on the basis of administrative documents of the Company’s Central Administration Office, if the Company has funds, at the request of an employee (application), if the continuous service of the employee in the Company is at least 10 years, to provide the employee with an opportunity of premature retirement not earlier than five years before the retirement age pension right established by the legislative act in the relevant year with payment of a lump sum benefit. The amount of the benefit shall be determined on the basis of 50% of the employee’s average monthly salary multiplied by the number of months remaining before the right to retire on retirement, but not more than 36 months;
• to grant employees subject to reduction the right to leave their workplace to look for a new job for 4 hours per week with their current salary retained from the date of delivery of the notice;
• when retiring from the Company for the first time, to pay a lump sum in the amount of the average salary for two months and an additional average salary per month for each 10 years of continuous work in Kazakhtelecom JSC before retirement.

In the reporting period, according to the Action Plan for 2022 in the field of social support of employees, Kazakhtelecom JSC implemented 100% of planned measures:

• Issuance of concessional interest-free loans for employees who needed to expand their real estate in accordance with the established criteria (the minimum value of living space per person — 18 square meters);
• Issuance of preferential interest-free loans for employees who did not have their own real estate in accordance with the established criteria;
• The amount of allocated budget for the implementation of activities amounted to more than KZT 500 million. The implementation of the budget was carried out by 100%.

Also in the reporting year, the Company continued its initiatives to improve the culture of healthy lifestyles among its employees. The following measures were developed and implemented:

• project on well-being and health of employees within the framework of the EX Strategy approved by the decision of the Board of Directors (protocol No. 8 of 21.07.2021) with a view to motivating employees of Kazakhtelecom JSC for a healthy lifestyle, increasing involvement, productivity and well-being of employees;
• measures for the development of physical health of employees (Healthy nutrition, Healthy sleep — refusal from gadgets before going to bed).

It is also worth noting separately the Healthy Lifestyle Marathon, which was held for two weeks in the online format on the platform of Salauatty Telecom Telegram Channel among the Company’s employees. According to the results of the marathon, the participants who took prizes were awarded certificates of Shop.telecom.kz, with the following denomination:

• 1st place — KZT 150,000 (one hundred fifty thousand);
• 2nd place — KZT 100,000 (one hundred thousand);
• The 3rd place — KZT 80,000 (eighty thousand).