Canadian Mining Journal


Mining the right people: labour is a precious commodity

Since the early 2000s, productivity in the mining sector has declined significantly as companies focused on growth amid strong commodity prices.

Since the early 2000s, productivity in the mining sector has declined significantly as companies focused on growth amid strong commodity prices.

These days, world metal prices have dropped and companies are focused on returning to productivity. When it comes to labour, cost-cutting exercises have led to headcount reductions creating the perception that the skills shortage of the boom era is over. But in reality, we’ve moved from a war for supply to the beginning of a war for talent – and companies must view labour as an important asset, rather than another cost. A singular focus on adjusting labour needs to the commodity price cycle will leave companies exposed to clear risks.

In Canada, a recent Mining Industry Human Resources Council report shows retirement to be the most significant contributor to the Canadian mining sector’s future hiring needs. Canadian mining employers indicated that roughly 20% of their workforce was eligible to retire in the next three to five years and 6% of workers were currently eligible to retire. As noted in a new EY mining and metals report about productivity in labour, these retirements impact operational continuity and lead to a great loss of organizational know-how and operational experience for mining companies.

On top of that, today, the best people can cherry pick the top roles in a global marketplace. And the war for talent isn’t just between mining companies; it’s against other sectors as well. As wise, senior and experienced people retire or leave the industry for other opportunities, mining companies must make sure talent management and productivity programs work together.

Using semi-skilled people for skilled roles isn’t productive, and it’s not sustainable. As they deal with high turnover and an aging workforce, companies can’t underestimate the gap in skills and knowledge that needs to lead them through this period of turbulence. To effectively retain senior people, while at the same time attract and grow new talent for the skills of the future (and the next upturn), companies must optimize their inventory of skills for their most valuable projects, and implement sustainable people programs.

People with new skills and ways of thinking will continue to be important to adapt to changing needs, but retaining experienced people with deep knowledge of the mine and the sector – those who have “seen it all before” – is just as critical.

Effective retention strategies for senior talent might include secure flexible working arrangements, productivity-based performance incentives or personalized support to transition to retirement. Meanwhile, things like formal mentoring and coaching can appeal to both new and experienced talent, while at the same time promoting intergenerational transfer of corporate and specialist knowledge.

Coupled with these strategies, companies must maintain a focus on breaking down their silo mentality. Encouraging greater collaboration around problem-solving, innovation and performance improvement is not only an excellent retention strategy, it’s critical to improving productivity.

Today, labour really is a precious and valuable commodity. Strong talent management programs that focus on retaining the right people for today’s challenges will be as critical to the future success of mining companies as investment in exploration.

Bruce Sprague is a Partner and EY’s Canadian Mining & Metals Leader. He is based in Vancouver.

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