VHA GOVERNANCE
& APPROACH
ETHICS &
COMPLIANCE
INNOVATION &
TECHNOLOGY
SUPPLY CHAIN
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ENVIRONMENTAL
FOOTPRINT

2017 SUSTAINABILITY REPORT

Developing a talented and engaged
workforce to continue expanding
our abilities to innovate and serve
our stakeholders.

Human Capital Management
Our employees are an engaged, well-trained and conscientious team who embody our dedication to doing the right thing for our business, for each other, and for the community.

Our workforce of approximately 3,000 associates, 94% of whom are permanent employees of ESCO or its subsidiaries, bring a wide range of skills to their jobs in the 22 countries where we operate. We count on our employees to share their knowledge and we are committed to helping them grow and develop their skills. We proactively identify employees who demonstrate high leadership potential and we have programs in place to nurture them and grow them into the future leaders of the business. This is particularly important when we acquire new businesses and must efficiently integrate new people, management systems and product lines into the ESCO family.

We recognize that an engaged workforce directly contributes to our efforts to improve our sustainability performance, as employees are inspired to do more if they identify with, and feel good about the organization’s business mission. In a highly competitive recruitment market, an organization who develops their employees, tracks performance results, recognizes high performers, and offers competitive compensation and benefits will attract and retain the talent needed for sustained organizational growth.

Employee engagement is central to our success. We work hard to ensure that employees are encouraged to offer, and are rewarded for, their input on business processes and management as this leads to higher engagement and productivity. Through a variety of mechanisms, such as athletic and wellness activities, birthday and lifecycle celebrations, service awards and social events we seek to build a strong sense of community, to demonstrate our commitment to work-life balance and the wellbeing of our employees and their families.

Our subsidiaries use several methods to track the success of our Human Capital management programs. These include surveys, cross-departmental committees (Wellness, Safety, Voice of Employee), sharing of ideas, resources and best practices and offering trainings and leadership development opportunities. For example, ESCO hosts an annual ESCO-wide Human Resources Conference and a bi-annual Controllers Conference where the HR and Finance teams from each subsidiary get together to share information, discuss challenges, and develop new plans. We have found these events to be very valuable components of our Human Capital Management efforts.


Recruiting High-Potential Talent

A high-performance business requires high-performing people. ESCO uses a variety of mechanisms to recruit individuals with strong technical skills, the ability to learn quickly and who can immediately contribute to our success. The recruiting market is competitive, and the ESCO companies communicate job openings in ways seeking to reach across cultural and generational differences. We use traditional outlets such as recruiters and job boards and also use social media and other internet platforms.

We also seek to give opportunities to individuals who might have limited access to learn about opportunities with our companies. For example, VACCO, Westland and PTI have programs with local high-schools and at-risk youth organizations where we introduce students to the wide range of career options available in the ESCO companies and give them an opportunity to shadow employees and see firsthand what employment in the high-technology sector can offer. PTI and Doble have specific programs to recruit military veterans.


Employee Training

Each of our subsidiaries seeks to provide onboarding and ongoing training opportunities. Onboarding programs including matching new hires with experienced employees who coach them through their new responsibilities. Every ESCO employee is required to participate in regular ongoing training such as annual courses on ethics and harassment. Other employee training is dependent upon the employees’ job responsibilities. Engineers and production employees receive specialized training including various manufacturing related programs. Managers receive leadership, finance, program management, sales and marketing training. Customer facing employees receive customer service and/or sales training. We also partner with local technical schools and community colleges to augment in-house training programs.

Each ESCO subsidiary seeks to continually develop and grow the skills of its workforce through a variety of training programs, customized to their businesses and their employees. For example, ETS employees have access to over 10,000 learning videos and courses related to core competencies for all roles in an organization. TEQ is in the process of developing “TEQ University” for job-specific technical training for its employees. NRG has an onsite training program to certify climbers of wind turbines. Most subsidiaries maintain a training matrix program that allows managers to review what trainings employees have participated in and identify additional training opportunities. Most also offer lunch and learn seminars on various business and personal topics which seek to give employees continuous opportunities and access to information to improve themselves professionally and personally.


Leadership Development

ESCO seeks to recognize and develop employees who have leadership potential and give them opportunities to take on larger responsibilities. Each ESCO subsidiary has a program to identify, guide and develop the leadership and technical skills of high-potential employees. For example, in 2017, VACCO sent 23 first time Managers and Supervisors to a two-day training program to further their leadership and managerial skills. A selection of supervisors and managers also participated in courses including a 5-week Supervisory Skills Course and a course on Interviewing Skills and Leading People. Five members of the ESCO Executive team received management coaching and one Executive team member participated in a Top Gun Leadership seminar.

We recognize that effective leadership requires self-reflection and critical assessments of our capabilities as leaders. This past year, we adopted the Leadership Circle method to explore leadership potential and leadership effectiveness. This approach involves using a 360-degree stakeholder survey for several of our senior leaders as well as our leadership cohorts. Three leadership groups met over the course of 2017 as part of this program.

In 2018, we will continue to assess the current training and development needs of our employees and research new options for enhanced training programs for management and leadership. We also plan to conduct a Leadership Culture Survey.


Employee Compensation & Benefits

We are committed to paying our employees competitive and fair compensation that is commensurate with their tenure, position and performance and is consistent with the market in their location. We conduct regular surveys of the market rates for jobs to ensure that our compensation is competitive. We offer annual merit-based increases as well as cash incentives for high-performing and high-potential employees. We offer a 401(k) plan and have an above-average participation rate. We have a comprehensive benefits package including medical, vision and dental insurance for which we contribute a substantial portion of the premium cost. We offer tax savings through plans which allow employees to pay for medical costs and dependent care with pretax dollars. We offer an employee stock purchase plan with a matching contribution to all full-time US-based employees. We are proud to report that our turnover is significantly lower than the industry averages and we have many very long-term employees.


Giving Back to the Community

In 2006 we established the ESCO Technologies Foundation, dedicated to providing financial support to charities and others in need, focusing on children and families in communities where ESCO has operations. Our employees are also engaged in volunteer efforts to support many of the organizations selected to receive grants. The Foundation also offers programs that award college scholarships to the children of ESCO employees and grants to support employees facing extreme hardships. The Foundation is supported by donations from our employees, ESCO Technologies and outside donations. To date, the Foundation has given approximately $2.6 million to support our local communities.

In addition to the Foundation, ESCO and each of its subsidiaries have programs to support other charitable needs. These include food, clothing and blood donation efforts, hurricane and other disaster relief programs, tutoring, home-building and many other group volunteering and donation events. Some of our subsidiaries offer paid time-off to employees to participate in volunteer opportunities.


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