International Longwall News surveyed recruitment companies involved in finding and employing workers for the Australian coal industry – from top level management to skilled tradespeople – with some interesting answers and, at times, not too surprising results.

Tiers of pain

At what level is the skills shortage most rampant? According to our survey respondents the major shortage problems lay in two main areas: mine management and qualified tradespeople.

At one end of the spectrum, managers and supervisors – especially statutory roles such as undermanagers, deputies and surveyors – were experiencing the biggest shortages, according to Hays Resources and Mining. The lack of people entering university selecting engineering-based studies, said Cadden Crowe, was a large element leading to this shortage, with Mining People International seeing a distinct deficiency of professionals with two to five years experience.

“Engineering students have failed to pursue mining degrees possibly due to poor image due to a mining slump in the late ‘90s and early ‘00s. These graduates would possess at least four years experience by now, making them attractive to most employers,” Hays engineering and technical senior consultant Nicholas Villa said.

So if a mine manager can actually be found, he or she will probably be ripping their hair out trying to find qualified tradespeople. These days mechanical, electrical and diesel fitters are all near impossible to come by.

Advertising agency TMP Worldwide Advertising and Communications, which works directly with resource clients to design advertising and marketing campaigns to target candidates, believes the lack of tradespeople corresponds with competition from other skill-hungry sectors and the mining lifestyle. Add on top the lack of targets in traditional hunting grounds like the UK, Canada, South Africa and the US – and you’ve got yourself quite a problem.

Innovative incentives

So what are coal companies doing to attract and retain workers? Cold hard cash seems to be one of the big winners, but according to Hays, while money talks it is a short-term conversationalist.

“Whilst money may be a simple attraction tool, it is a poor retention tool with most candidates who are driven solely by money always searching for bigger salaries. This monetary focus has caused artificially high salaries to be offered and subsequently created unrealistic expectations across the industry, especially [in] newcomers. This method clearly isn’t sustainable for the industry,” Villa said.

“Staff retention and attraction has, [for the more savvy employers], come from promoting sustainable features such as company culture and career/personal development opportunities. This approach consequently attracts more stable candidates who are looking to get something more out of their job than just cash.”

Attraction methods include offering undermanager or deputy’s courses to potential candidates; a lump sum starting bonus; extended temporary accommodation (if relocating); paying for further study; greater responsibilities and broader task exposure; novated leases; and a modern and supportive company culture that treats employees as an individual and team member.

Examples of retention methods include career development through training and succession planning; increase in responsibilities of role; positive company culture; social activities outside of work; and performance bonuses.

On top of this, Mining People International has seen employers offering extra days off on top of much higher base salaries and a willingness to pay out financial commitments made by a previous employer.

For TMP’s client service director Harriet Richert retention is all about management.

“From our employer branding research, we know the most valuable incentives to workers to impact retention are around how they are regarded and treated by their managers – for example, having good work recognised, receiving feedback and/or training that helps them develop their skills, and being trusted and given responsibility,” Richert said.

She said in a recent survey among 300 TMP clients, only 50% conducted formal interviews with workers at critical points in their employment cycle to benchmark job satisfaction and identify necessary strategies to retain them; and only one in three clients reported findings to senior management for action. On the positive side, she said TMP was seeing a slow rise in this activity.

Barclay Recruitment’s Chris Barclay listed succession planning and career planning as the two big factors in keeping employees.

“Some companies have applied retention bonus schemes to keep their more senior people. Other companies are more mindful of implementing career succession plans and training and development opportunities. Benefits such as housing allowances and reductions in roster cycles or more creative rosters are now commonplace,” said Cadden Crowe’s Jane McConnell.

Shortage upshot

From a big picture perspective, the major ramification of the skills shortage on the mining industry has been at a company or project level.

The Reserve Bank has acknowledged that labour shortages are actively constraining business growth – and for the mining sector, that means an inability to maximise opportunities presented by the booming market as well as delays on existing projects and budget blowouts, TMP said.

“Major ramifications are the increased labour costs to operations, which has an impact on the feasibility of some marginal operations, and the delay on completion of other major projects,” Cadden Crowe said.

Cadden Crowe said on a more personal level, professional engineers were being promoted to more senior roles to fill gaps before they have the experience and training to successfully perform in the role: “As a result we see the promotion of individuals too early as exacerbating the problem as individuals who are seen as a failure in a senior leadership role often drop out of the industry.”

Barclay agreed that there is now an increased pressure on existing staff.

Another short-term ramification is poaching. “We have already seen short-term effects of the skills shortage where employers compete for candidates by almost bidding against each other. This can be seen in the artificially high salaries being offered to those who aren’t necessarily that experienced. In turn, unrealistic expectations are the result, with some graduates demanding unworkable packages,” Hays said.

Alrigh’, Ni hao, Howzit

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