By Jon Wylie
The skills shortage is a critical business risk for the mining community. The Mining Association of Canada estimates that the country will need approximately 10,000 new workers each year during the next decade to replace current positions and fill new ones. Likewise in Australia, the Minerals Council predicts a shortfall of 86,000 workers.
Several factors amplify this situation, including an aging workforce and the decrease in the number of graduates with advanced degrees in engineering and science. For example, the Mining Industry Human Resources Council (MiHR) found during its 2010 National Employer Survey that more than half of Canada’s workers are aged 45 years or older, with more than a third of the workforce eligible to retire in the next few years. Similar statistics can be found elsewhere around the world—the reality is daunting because not only is the industry losing workers, it is also losing executives with vast knowledge and experience.
As more and more mining workers approach retirement, the rate at which they are being replaced is insufficient. Queens University in Ontario graduated fewer than 30 students with degrees in mining engineering while Virginia Tech in the U.S. only graduated 22 last year. The mining sector simply cannot support its anticipated growth objectives based on these graduation rates. Additionally, as the career aspirations of younger workers include a desire for greater work/life balance and freedom of choice, mining jobs frequently feature many unattractive aspects including remote locations, long hours away from their families, and a stressful and demanding work environment.
The shortage of skilled workers is not news to mining executives. For several years, the mining community has enacted several initiatives to combat this unnerving trend. Companies have tried to cultivate closer relationships with educational institutions by offering scholarships and hosting forums and seminars to create more awareness about the career potential within the sector. Colleges and universities are also introducing campaigns to highlight the benefits and opportunities within the mining industry.
With existing mines getting older, more complex and costly, companies are searching for resources in more geographically remote locations. Workers approaching retirement often do not want to relocate at this stage in their careers, so new mines frequently mean a new workforce needs to be identified. Mining companies adopted a ‘fly-in fly-out’ approach that helps companies avoid relocation expenses, but it impacts productivity, increases pressures on family relationships, and further distances potential employees who seek a positive work/life balance. As an alternative, executives are seeking to access non-traditional and under-represented labor pools including women, transitioning workers, and Aboriginal people. MiHR launched the Aboriginal Engagement Initiatives and Australia introduced Pathways to the Pilbara, a program to train unemployed and under-employed Indigenous Australians in basic mining skills. Both of these initiatives attempt to create career opportunities that advance under-represented parts of the workforce while helping to address the labor shortage. In other parts of the world, companies are replacing expatriates with local workers. For example, localization policies in Ghana require companies to employ a reasonable level of indigenes in all operational areas. Efforts such as these help to increase local ownership while decreasing both costs and employee turnover.
From Competency to Proficiency
Since 1946, Alexander Proudfoot has undertaken hundreds of significant mining projects around the world across a wide range of surface and subsurface mines, smelters and refining operations. Based on these extensive experiences, the company realizes that more must be done to address the critical labor shortage. The current actions of mining companies are valiant efforts but do not go far enough to fill the immediate gap confronting today’s executives.
The ability to identify, attract and retain critical operational skills is more important now than ever before and is imperative to the future of the industry. The companies Proudfoot works with are developing differentiated employee value propositions and incorporating enhanced incentive pay structures to attract the talent necessary to continue growth. Its focus is what you do with people once you get them through the door—developing talent to address the burgeoning knowledge gap caused by the aforementioned factors.
Many workers we see from day to day are being forced to step up in their careers at a much faster pace. For this progress to be seamless, Proudfoot believes executives need to up-skill their employees by focusing on two core areas: competency and proficiency.
• Competency: Mining employees must first become competent in their roles, meaning they know how to operate the necessary equipment and perform the required tasks.
• Proficiency: Once employees reach a certain level of competency, they then need to develop proficiency in a given area. This translates to being able to operate equipment in a way that will not impede the operation, while meeting production targets and being able to take corrective actions when issues are identified.
Employee Skills in Focus
Proudfoot has worked side-by-side with companies to develop employee and supervisory skills at all levels of an organization. As an example, a gold mining company in Ghana needed to improve volume to take advantage of rising gold prices. Seeing that its human resources processes and people improvement initiatives were deteriorating, the company turned to Proudfoot to improve employee performance through an overhaul of its human resources approach and subsequent interfaces with operational and support services areas.
Proudfoot installed an infrastructure and standardized processes for the human resources function and complemented this foundation with an improved recruitment and selection process, an education and training program, and a performance management system, which led to a 52% increase in productivity and a 31% improvement in machine utilization.
Similarly, a North American rare earth materials miner was experiencing tremendous revenue and demand growth. To capitalize on these conditions, the company needed to enhance its processing capabilities and production rate. Employees lacked adequate skills and training, which resulted in poor machine utilization and material processing flows. On the management level, supervisors lacked the ability to effectively manage and allocate resources.
Proudfoot developed training for all production and maintenance managers, supervisors and senior plant leadership. As a result, accountability increased, employees developed a team mentality and interdepartmental communications and interactions improved. The company saw $84 million in benefits with a 50% increase in throughput and a 3% decrease in overtime.
The Supervisor Imperative
Many times employees are promoted to middle management before they are sufficiently prepared. Today’s supervisory role has expanded to include more complex and inherently dangerous responsibilities including safety and quality controls. New managers must be prepared for this role evolution.
Also adding to this situation is the tradition of promoting the ‘best worker’ to a management role. Executives must realize that a manager requires an entirely different skill set. Companies are essentially losing the productivity of their best workers and promoting employees who are not able to effectively manage the operation through other people by providing direction, gaining commitment, communicating, following up and giving both positive and negative feedback. Less than 30% of a supervisor’s day is spent given direction because he or she does not know how to do it effectively. New supervisors must develop both competency and proficiency in supervisor-specific skills.
To take advantage of the continued growth of emerging nations, the mining industry needs to complement its employee acquisition and retention efforts with skills programs from the front-line to the executive level. A skills program that brings employees up the learning curve through competency to proficiency will deliver employees who are ready, willing and able to exceed performance expectations.
Wylie is a senior vice president for Alexander Proudfoot and COO of the company’s Global Mining and Metals Centre of Excellence. His expertise spans multiple functional areas including business performance improvement, organizational cultural alignment, cost reduction, business process engineering and implementation. He has led numerous process transformation engagements focused on improving bottom line results in several industries, with a principal focus in primary resources. www.alexanderproudfoot.com.