Lakshmi N Mittal
Chariman and CEO
Why this is important for ArcelorMittal
Every company says its people are its greatest asset, and they say it because it’s true. We’ve built our success on our people’s commitment and talent, and we want every one of them to have a rewarding career. Our working culture is rooted in integrity, diversity, strong values, and open, honest communication.
Our remuneration policy links part of the bonuses of both our executives and our managers to our lost-time injury rate and the number of fatalities in the part of the business where he or she works. And, uniquely in our sector, we have a global Joint Health and Safety Committee with our unions, which involves people at every level, from shop floor to plant manager.
By far our highest priority under this outcome is safety. We know that mining and steelmaking can be hazardous, and that gives us an even greater responsibility to keep our people safe and healthy. And yet despite the work we’ve done and are still doing, our safety rate is not as good as it should be. We don’t want any fatalities at our sites, or any injuries that result in lost time, hence our group-wide Journey to Zero programme. We know the best way to achieve this is by creating a culture of shared vigilance in which everyone understands the possible risks, takes responsibility for themselves and their colleagues, and speaks up if they spot a potential hazard.
This outcome is sponsored at group level by Ricardo Garcia, vice president of human resources and IT for ArcelorMittal South and Central America. He is working to ensure that all the issues relating to our workforce are brought together in our strategic planning, that we learn from each other, and benchmark ourselves against the best. With over 209,000 employees in more than 60 countries, this is a huge task, but a vital one, and Ricardo is passionate about developing a more creative, effective, and happier workplace. He has identified five key strategic areas of focus: safety, health, employee relations and engagement, employee development, and diversity and inclusion. Much of this work is being done through the local HR and health and safety councils, and at group level through the global Joint Health and Safety Committee.
It is extremely distressing that we had 27 deaths at our sites in 2015, despite all the safety work we’ve done, both with our own employees and our 45,000 contractors. We have managed to improve our injury rate, measured as the lost-time injury frequency rate, or LTIFR, and this has now fallen from 3.3 incidents per million hours worked in 2007, to 0.81 in 2015. The industry average is 1.391. But that’s not enough if we can’t prevent fatalities, so we now have three major initiatives under way.
The first is the Courageous Leadership campaign on safety, which has already made a significant difference in our mining business, and was extended to our steelmaking plants in Ukraine and Kazakhstan in 2015, following a particularly alarming year for safety in those countries. A similar programme, called Take Care, was launched in our European steel plants at the end of the year.
The second initiative is the formalisation of a new leading indicator of safety performance, which logs and reports accidents and near misses, so that we can take prompt action and pre-empt possible problems before they occur.
And finally, we’ve launched a new scheme for our contractors. Reaching them on a consistent basis is tough, given that they may only work for us periodically, and the personnel are constantly changing. Our site managers now have to record the amount of time they spend on safety with this group, with a priority on high-risk activities.
Our principal company-wide safety programme, Journey to Zero, started in 2007, and it’s one reason why our LTIFR has improved greatly since then. In total, 148 of our sites have now operated for more than five years without a single lost-time injury, like our Tubular Products Vitry mill in France, and our Frýdek-Místek mill in the Czech Republic. This proves that a goal of zero can be achieved.
The Journey to Zero includes safety leadership and awareness programmes, workshops, training sessions and ongoing employee communications, from regular shop floor audits, to ‘safety moments’ at the start of a shift, to the monthly review. It’s also about sharing best practice and learning from good ideas in other parts of the business. In 2015, health and safety training increased from 9 to 14 hours per head, making up 27% of our total average training provision for each employee.
This work is designed to support our rigorous framework of safety policies, procedures, and monitoring systems. All accidents are investigated and group's Management Committee members review all fatalities and cascade the lessons learned throughout the company.
1Worldsteel, based on 2014 data.
If safety is our number one priority, health comes a close second. The Journey to Zero has a health component as well as a safety focus, and aims to encourage healthy lifestyles and foster wellbeing, both at work and at home. There are specific initiatives on smoking, drug and alcohol use and exercise, and programmes to support employees with problems such as obesity, stress and fatigue. Our plant at Ostrava, Czech Republic, provides a good example of the sort of activities that take place across the group: a year-long quit-smoking campaign finished in 2015, and was marked by the removal of all the smoking areas at the site.
As well as an annual health and safety day, we also run a health week at every site every year, and around 191,000 people took part last year. We’ve also been working with our European Works Council on the occupational health risks in our coke plants, with a particular emphasis on those employees who might be at risk as a result of exposure to polycyclic aromatic hydrocarbons, or PAH. By working together, we’ve developed a plan to tackle this issue. Individual plants will be developing specific plans during 2016.
Some health issues are to do with what’s happening locally. For example, in Brazil, we are working hard to protect our employees from the Zika virus; in Ukraine, we provided mental health support to 237 employees returning from active military service; and in West Africa we played a pivotal role in mobilising the resources of the private sector to combat Ebola, for which we received a Clinton award in 2015.
To help employees chart their personal and professional progress, 96% of exempt employees took part in a performance review process with their line manager in 2015. This increased from 95% in 2014, thanks to our online performance management tools. We’re proud to run a wide range of development programmes through the ArcelorMittal University. Over the years, this has grown and developed, and now offers a huge range of online and classroom training courses across leadership, management, functional, technical and professional subjects. We invested a total of $54 million on training and development in 2015, and our employees received an average of 58 hours of training. We also opened a new university campus in Temirtau, Kazakhstan, offering both steelmaking and mining training, and new leadership programmes were launched. Our annual Learning Week, designed to inspire our workforce with the number of training options available to them, involving 43,500 employees at more than 130 sites last year.
We continued to invest in our talent through our global employee development programme, which helps us spot people with potential, and manage the succession for key roles as part of our overall workforce planning process. The latter is particularly important in our industry, where many senior managers are approaching retirement age, and we risk losing important knowledge.
To help employees chart their personal and professional progress, 96% of exempt employees took part in a performance review process with their line manager in 2015, an increase of 1% thanks to our online performance management tools. Meanwhile, 80% of our open leadership positions were filled by internal people that had been identified in succession plans – 5% more than in 2014. We are pleased with this result, since it shows that we are successfully developing our pipeline of leaders. This had an impact on the turnover rate amongst our leadership, which was just 2.6% in 2015 out of a population of 1,600 compared with 3.1% in 2014.
Developing young talent
As well as leadership development programmes we offer mentoring, and the senior-junior programme at our R&D centre in Asturias, Spain, is a great example of enabling the next generation of leaders to learn from those with more experience. We want to encourage more young people to seize the chance of a career in steelmaking and mining, and especially young women. We offer apprenticeships and run a wide range of educational initiatives to attract the best students in school to study science, technology and maths. There’s more on this under outcome 9.
Employee relations and engagement
We know that hard times for the steel industry can mean very hard times for our employees. That makes it all the more important to communicate openly and honestly, especially when we’re forced to make difficult decisions. Our people have been hugely supportive throughout the challenges of the last few years since the credit crisis, and we have done our best to engage with them positively, and treat them with respect and understanding.
We also listen to them. Every two years we run a survey across the whole business to ask for feedback, gauge morale, and spot emerging issues. This Speak Up! survey covers everything from how people see the opportunities for professional development, to their understanding of where the company is going. It’s anonymous, and it’s well used – 82% took part in 2015. Of these people, 69% feel positive about working for us, which is broadly the same as two years before. Given the challenges we’re dealing with, we think this is a pretty good result.
We also run a reputation survey in individual countries, which canvases the opinions of a wide range of stakeholders, including employees. In 2015, over 1,200 employees were surveyed in eight countries – Brazil, USA, South Africa, Kazakhstan, India, France, Belgium and Germany. We were pleased to see that we are consistently well-rated among our own people, especially in relation to what we do on health and safety. On the other hand, employee engagement is not as strong across the board as we would like it to be – there’s a clear opportunity, for example, to engage our people more on our products, and the contribution they make, both economically and in terms of sustainability.
Working with our unions
We pride ourselves on productive working relationships with our unions. In the current environment we are working hard to gain their support and understanding as we renew our collective bargaining agreements. 90% of our employees are covered by such agreements2. In 2015 we had 23 formal consultations with the European Works Council. We work hard to avoid strikes. Last year we saw no strikes that lasted more than a week.
2 Covers all major sites.
Diversity and inclusion
We value diversity enormously – after all, we work in more than 60 countries with employees from many more.
Our policies cover every aspect of diversity and inclusion, but gender is a particular priority for us – we’d like to achieve a better balance of men and women. We want to be an employer of choice for talented women, and we have a number of programmes in place now to support this, including personal development and mentoring, and a high-profile ‘women in leadership’ programme at the ArcelorMittal University. In 2015, 135 women took this course. At present, three of our 11 main Board directors are women, and 11% of our managers across the world – up 1% from the previous year. In Europe the picture is more positive: 13.1% of the region’s managers and above are women. Looking at leadership more broadly, women make up 17.5% of those in the region who lead a team.