Vale 

Innovative Practice/Initiative: Career and Succession Planning

Organisation Profile 

Vale is the second largest metals and mining company in the world, one of the 30 largest publicly traded companies in the world and the largest private sector company in Latin America. Vale has a market capitalization of around US$ 170 billion, with approximately 500,000 shareholders from all continents.

According to the Boston Consulting Group, one of the leading consultancy firms in the world, Vale was chosen as one of the top 25 sustainable value creators in the globe, due to its extraordinary performance over the last 10 years.

Vale is the world's largest producer of iron ore and iron ore pellets, key raw material for steelmaking, and the world's second largest producer of nickel, which is used to produce stainless steel, aircraft, mobile phones, batteries, special batteries for hybrid electric vehicles and other products. We also produce manganese, ferroalloys, thermal and coking coal, bauxite, alumina, aluminum, copper, cobalt, platinum group metals, and fertilizer nutrients, important raw materials for the global industrial and food production industries.

The Organization's HR Initiative

As an international company with a global workforce numbering 60,000 employees and over 50,000 contractors, Vale has recognized the vital importance of effective human resources strategies in the company's overall goals around business development and growth. Vale has made human resources and talent management a top priority, and wants to ensure it has the tools and processes in place to:

• retain talented people, in part by ensuring they are provided with appropriate and timely opportunities for professional development and advancement
• mitigate the risk of knowledge loss that occurs both through natural attrition and through people leaving the company
• fully leverage its collective skill set by ensuring optimal allocation of employees and, in turn, maximum productivity

With these objectives in mind, Vale has implemented an innovative program for carry-on succession that was launched in 2008 and continues to reach further into the global business. Known to Vale employees as "Career and Succession Planning" (CSP), the process is a global technology-driven system that enables global collaboration and identification of potential candidates for succession at most levels of management within the company. 

Vale has seven levels of management in total (L1 through L7 in the line organization): managers, general managers, directors, vice presidents, senior vice presidents, presidents, and the CEO as well as technical roles at differing equivalent levels. Through this system, Vale is able to gain a holistic, global view of the company workforce, and identify successors for individuals in levels three though seven (currently) by searching for and singling out strong contenders among potential candidates. 

This is achieved through an in-depth performance-evaluation process that is spearheaded by the company's Career and Succession Committees and is undertaken annually in the second half of the year. The evaluation consists of a team, manager,  clients and peers review whereby a 360-degree assessment of an individual's performance is conducted against core competencies which vary depending upon the level of the role.

The results of these assessments are analyzed and fed into a globally accessible software database (CSP) that enables Vale to effectively identify potential successors. These are people who might be peers at the same level, or subordinates at lower levels. They might be immediately promotable, or identified as potentially suitable for a more senior position within the next two to five years. If the evaluation and subsequent searching indicates no clear successor at either the same or at lower levels, the search escalates to the next level. Moving up a level essentially 'casts the net wider' so that what might have been a local or regional search now crosses international boundaries to tap into the company's global talent pool.

CSP also allows for the determination of a training component that can prepare potential candidates for more senior roles and which is currently under development within the system. This in turn supports a strong succession strategy and helps Vale identify and address gaps in expertise that could hinder the company's overall competitiveness.

The CSP process is enabling Vale to create a global talent pool of next-generation leaders. Similar to a growing number of organizations today — spanning many business sectors — Vale is challenged with large numbers of retirees across the organization. Through CSP, the company has been able to specifically identify those individuals who are close to retirement, and ensure the availability of solid candidates who can take their place.

As well, in addition to being an effective talent-development and retention tool, CSP also offers the benefit of cross-sharing of resources,  enabling knowledge and best practices that may reside within one department, business unit or geographic location — be it Canada, Europe, Africa, or the company's headquarters in Rio de Janeiro, Brazil — to be shared across the entire organization.

Evidence of Impacts

CSP is already delivering measurable benefits around HR management and allocation. As an example, the company launched a search on the CSP platform to fill a vacancy for a General Manager of Support Services that was needed at a Vale site in Canada. A qualified and suitable candidate was found in New Caledonia in the South Pacific based on the skill set and professional development that was recorded in the system. This person has now re-located to Canada.

From an employee perspective, CSP is helping provide improved opportunities for professional growth year upon year as the system both reaches more people and gets more robust in terms of use and data maturity. Employees know that their efforts will be measured on a regular basis against specific competencies and goal setting targets, and that there is an established procedure to reward them for these efforts. 

The program also provides a measure of reinforcement to employees of the company's intent to promote from within wherever possible,; helping with employee engagement and retention efforts. Through structured, regularly scheduled assessment across the organization, employees are assured of ongoing acknowledgement of their work, and know that there exists a clear path for advancement. 

Further, Vale is currently looking at expanding the scope of CSP by using the program and technology platform as a performance-measurement tool. In this way, employees' compensation and bonuses would be linked to the results of the annual succession assessment, and the degree to which those results support an individual's team and departmental goals.

In developing and leveraging CSP in this manner, Vale is not only a frontrunner in the mining industry, but in fact is one of the few organizations in the world to apply this highly methodical and global approach to performance measurement and management on a sustained and consistent basis.