One TORM: Afloat, Ashore and Everywhere in Between
By Joseph Keefe
TORM’s leadership philosophy is the basis for its focused marine recruitment and human resources strategy. Rich in history, forward-thinking in its approach, the firm leverages both as it comes together in One TORM.
Simon Frank is Vice President and Head of Global Marine HR in TORM A/S. Beginning his maritime career with the Royal Danish Navy; he has seen and experienced marine operations first hand in myriad settings, all over the globe. Later, he joined Rohde Nielsen in Denmark as crew manager before serving at EMS Shipmanagement and then, as Head of Maritime Personnel at Lauritzen Kosan. Simon’s crew management experience includes working with a large range of nationalities, different ship types, and in implementation of crew management systems.
Simon’s employer is equally experienced, with a history of operating commercial tonnage for more than 125 years, dating back to 1889. Because TORM is a pure play product tanker company and one of the world’s largest carriers of refined oil products, manning issues might seem to be less complicated than a firm which dabbles in more than one sector. That’s not necessarily true. At TORM, navigating the tricky world of marine human resources boils down to leadership. In this edition, Simon Frank gives us a unique, inside look at the human resources strategy at one of the world’s largest tanker owners.
TORM’s Leadership Philosophy
According to Simon Frank, the TORM Leadership Philosophy is shaped by three overall dimensions: Performance, Relations and Personal Leadership. And, honoring that structure means that the company needs to have a strategy of having everything under one roof. “We need to control every aspect of our place in the industry,” explained Frank, adding, “From a marine HR perspective, we are over the last year in the process of introducing a concept we call ‘just culture.’ It’s directed at creating the right balance between performance-related communication, and also fair and open, non-blame communication. This is about training our seafarers in having robust conversations, addressing performance issues, and addressing our system. Within this open approach, we are not afraid to openly discuss challenges, and we have systems in place that can address training needs.”
All of that sounds good in 2016, but before the conversations can be had and performance challenges addressed, ship operators need to find the right personnel. That task is as challenging as it has ever been, in part because what is now important to seafarers isn’t necessarily the same thing that they wanted only a decade prior. Addressing that metric, Frank says, “The mechanisms have changed over the last ten years – especially in the tanker industry. Salary is not so much discussed anymore – salary is a given. And if you are professional and top market performer, you will naturally have a salary that matches the market. We don’t spend much time discussing wages with our seafarers. Instead, we discuss other topics that are more important today, and these topics typically are welfare on board – very much including connectivity with internet access. That’s extremely important today.”
Even more important, insists Frank, is the need to provide good quality quarters, and making sure there is the possibility for mariners to get ashore. Beyond this, says Frank, the contract length, especially for the ratings where seafarers can be embarked for the longest basis – up to nine months – is becoming an important aspect of retaining the best and brightest. “That’s the next thing that’s going to be under some kind of pressure. That 9 month stay will likely be reduced to 7 or 8 months for ratings in the future. We constantly discuss employment conditions with our seafarers. We’re not trying to comply with a certain document. Instead, it is much more important for us to be able to react when we have these discussions with our seafarers directly. Contract length will definitely be the next the next pressure point.”
TORM operates a large and modern fleet of product tankers that come in various sizes. Deciding which mariner goes to which vessel is more complicated than segregating personnel according to experience on a particular sized vessel. For TORM, the process instead involves creating history for each seafarer with a smaller pool of vessels. He explains, “Professionally, we wouldn’t have a problem to send people from bigger to smaller vessels and back again. From a professional, technical and educational perspective, our people are appropriate for all sizes of vessels within our fleet. More important, for planning purposes in the Philippines and in India, where we have the majority of our seafarers, we are in the process of trying to connect individuals to one or two particular vessels of the same type, that they will share their time on.”
The goal, says Frank, is to develop situations where there is history, more responsibility taken, and ultimately, more accountability taken. That, he said, translates into leadership. “We want to create smaller pools of seafarers for a smaller number of vessels. So, this is what we’re trying to plan this year, while also at the same time reaching out to our seafarers, selling it as a ‘win-win’ situation. It brings people closer to the vessels, creates more job satisfaction, but it also benefits TORM in how we operate our ships.”
Leveraging the Diverse & Multi-Cultural Workplace
With offices located in Houston, Manila, Mumbai and Singapore, the TORM company culture is quite diverse. Beyond looking at qualifications and establishing a track record for mariners in smaller pools, TORM also looks carefully at the cultural makeup of each vessel, both in terms of nationalities and which roles are filled by a particular mariner, and why. Frank explains, “We have a large number of seafarers from India and the Philippines. And, we have several vessels where we have full Indian crews and some that have full Filipino crew. Some have Indian officers and Filipino ratings. We do have a formula and we stick to it. Additionally, we have a smaller number of Danish and Croatian officers. Our pool then contains only four different nationalities. It’s just right for the size of fleet that we have.
Frank further emphasizes the need for managing the seafarer mix on board multi-national vessels, adding, “I formerly worked in a big ship management company where the nationality combinations were almost out of control. That leads to many more challenges on how you combine your crew on board. There are combinations which don’t work as well as others. There are guidelines as to how you should put together a crew. And, there’s the whole situation of how do you approach the cultural differences. We have specific steps in addressing that.”
The acquisition of OMI in 2007 marked the biggest increase in fleet size ever for Torm. OMI was a quality firm in its own right – with quality seagoing personnel. Nevertheless, there were challenges in melding two potentially different seagoing and management cultures into one cohesive firm. Not everyone was convinced that it could be done, says Frank. The oil majors, in particular, were concerned.
Simon Frank wasn’t at TORM when the merger came about, but he stresses the positive aspects of the larger, combined firm. “It was, for sure, a challenge,” but he adds, “The key point was to bring together two different cultures and try to take the best of both to form a joint set of procedures where we collectively benefited to the maximum extent. Looking back to the challenge that we had at the time of the merger, we are now in much stronger position with more knowledgeable workforce – ashore and on board, combining two very good and professional companies, now under one roof.”
The Human Element
One area of crew management that has gotten a lot more attention over time is the area of ‘vetting the human element.’ That’s much more difficult than it sounds. Even sophisticated commercial vetting programs such as RIGHTSHIP, and industry organizations like BIMCO have yet to crack the code. But, that doesn’t mean it isn’t happening. One such scenario where it has become more common is during tanker vetting inspections, by oil majors and SIRE, and others, too. TORM’s Frank is very much aware of it.
“One thing that has changed the last few years is that the vetting superintendents are very much addressing the junior officers on board. They expect the juniors on the bridge to be able to perform in front of a vetting inspector, and to perform the tasks under his domain. To keep up with that development, we have been training our junior officers in understanding the vetting element of the job. These vetters are introducing a lot of improvements by addressing procedures to us, and we are in a continuous effort to stay ahead of all of it. Here at TORM, we are in a good place with that, because we have good procedures in place. We perform well as a group during vetting, but vetting helps us to adjust our procedures from time to time.”
Along with all of that, TORM in the past year introduced an advanced vetting training course for their officers – senior and junior ranks. Beyond this, like many other companies, TORM conducts regular internal audits of their vessels to keep them operating at a high level. Frank adds, “It wasn’t too long ago that vetting was a matter between the Captain and the Chief Engineer. That has changed.”
The Best & the Brightest
According to Frank, there is one aspect of his job that is made easier by the narrow focus of the TORM fleet. That adds up to better access to quality seafarers. “When we look at our fleet, all in the same segment really, that’s a positive for us. We have a good idea of what type of people that we are looking for. I don’t know if it is any easier for us to recruit than say a bulker company, but if you look at India for example as being a major player in the seafarer’s market today and you look at tanker wages and bulk wages, you will find that tanker wages are 30 to 40 percent higher.
Frank’s experience has always been that the best and the brightest naturally gravitate to the tanker industry. He adds carefully, “So, the smartest people – and that’s perhaps a provocative quote – are sailing in the tanker trades or liquid cargo segments. That’s where the benefits, wages and best working conditions are. So, it’s not necessarily a ‘TORM thing’ but that’s where our ships are situated, that’s where we need to recruit. There is a dividing line in the market today, where the first tier of seafarers, the best professionals, are chosen for the higher paying companies which naturally are the tanker operators. That includes of course LNG and LPG. And, in terms of marine HR, in my experience, the chemical trades are where you see the hard core professionals; the top of what I’ve seen in my time in HR.”
Determining who is the ‘best and brightest’ has always been a goal of shipping companies everywhere. In the American Jones Act trades, the use of simulator assessments is now commonplace at most quality companies, especially when the possibility of promotions to senior positions comes up. TORM is no less enthusiastic about that effort, but Frank says TORM goes about it in a slightly different manner. “We don’t always use a simulator assessment. For the Master’s promotions, we do include a simulator assessment in our process. For the most part, we depend on professional assessments and a test that is aligned to the job description and job profile. We are also in the middle of a large TORM leadership program which has an element of self-assessment, incorporates feedback from superintendents, and there is a ‘360’ test environment that’s included, as well.”
One TORM: Globally Aware, Internally Controlled
Where some operators trust their operations – technical and/or operational – to third parties, very little of that is in place at TORM. The firm’s fully owned process, from top to bottom, is, in Frank’s estimation, the key to success. “That’s the right strategy if you want to optimize and own your operation, controlling costs, income, all these things benefit from a fully controlled operation. It is difficult to do that with a ship management company.”
There are exceptions to any rule and TORM is no different. In Croatia, for example, TORM utilizes a manning agency, but this extends to less than 10% of their seafarer pool; approximately 150 Croatian officers. Frank explains further, “This is a manning agent that we have been working with for more than 12 years. Many of our procedures are standard in their office. It’s not only a manning agency; it’s more like a partner for us. Apart from that relationship, however, the seafarer pools are managed in house.”
Across the globe, a 100% TORM manning office operates in Manila, and a full service Mumbai office – with superintendents, insurance, and support functions – services the India market for TORM. In Manila, the main focus is manning – but all seafarers being dispatched from that office are only for Torm ships. “That gives us a very strong position there to develop our own people and then retain them,” says Frank.
Globally, TORM has taken over about 12 ships in 7 or 8 months, the most aggressive growth that the firm has seen the OMI acquisition. True to his word, Frank is watching over the intake of new talent closely. “During this period, I’m interviewing all new recruits to senior positions. I’m impressed with the type and the quality of the people that we are able to attract. For the top level of seafarers, it is clear to me that we are able to put our TORM name and image into the market and be able to attract and retain well qualified people. That we run a full TORM operation from start to finish is one of the reasons that we can do this.”
TORM at a Glance...
List: Nasdaq Copenhagen
Number of Ships: 78
No. Externally Managed:3
Type Fleet: Product Tankers
Smallest Ship: 35,000 DWT
Largest Ship: 110,000 DWT
Flag: 99% Singapore, Danish
Headquarters: Copenhagen, Denmark
Offices: Houston, London, Manila, Mumbai, Singapore
Number of Seafarers: 3,000.
Office / Shoreside Personnel: 275