Is this how we solve mining’s skills shortage?
Is mining’s skills shortage only going to get worse before it gets better? And how do we fix it?
Is mining’s skills shortage only going to get worse before it gets better? And how do we fix it?
Analysts at McKinsey recently released a report suggesting the industry had “lost its lustre”, outlining several key reasons top talent is choosing other industries over mining, and making some suggestions for what is needed to attract them back.
Let’s have a look at what McKinsey’s experts had to say.
The mining talent squeeze is global
McKinsey’s analysis showed that 71% of mining leaders had found the shortage of talent was holding them back from delivering on production targets and strategic objectives of their business. Some 86% of mining executives told researchers it was harder to recruit and retain the talent they needed compared to two years ago, particularly in specialized fields like mine planning, process engineering, and data science and automation.
“We expect this trend to continue,” McKinsey reported. “Mining is not currently an aspirational industry for young technical talent to join: there has been around a 63% drop in mining engineering enrollment in Australia since 2014, and a 39% drop in mining graduations in the United States since 2016.”
They warned the situation was, therefore, not about to improve without drastic action being taken.
“Australia has seen mining job vacancies more than double since February 2020, while Australian labor demand for mining operations and projects will require around 24,400 new workers by 2026,” the report authors said. “However, the market is forecast to supply only about 16,000 workers in that time frame, indicating that vacancies will likely continue to rise for Australian miners.”
Money just isn’t enough anymore
McKinsey’s analysts warn that the nature of work, and people’s expectations from work, are changing. There’s more automation, more need to be digitally savvy, more emphasis being placed on work-life balance, the rise of working from home since the pandemic, and the industry’s often poor reputation with many when it comes to the environment and corporate social responsibility.
In the past, higher salaries have been used to make employment in mining more attractive. Historically, this has allowed mining companies to, “attract large numbers of workers to remote mine sites around the world, allowing them to rapidly ramp up the workforce during times when commodities prices are booming”.
But the pull of this ‘financial carrot’ is not working, particularly with the gen Z workforce. There is a perception the work is remote, physically demanding and hazardous.
“Once talent has been attracted and employed, additional pain points often include uninspiring capability development (beyond standard occupational training), limited or vaguely defined career progression pathways beyond middle-management layers, and insufficient levels of diversity and inclusion,” McKinsey’s analysts warn.
So, what can the mining industry do about it?
The team at McKinsey identified four areas where mining companies, and the industry as a whole, needs to make a change in order to attract the best talent.
- Treat talent as a strategic pillar, alongside safety, production, and cost
“Talent is often treated as an ‘HR problem’, which we believe fails to appreciate the complexity and value being left on the table by not making it an all-executive agenda item,” McKinsey’s analysts said. “We heard from one global miner HR lead, who said miners spend enormous time, focus, and energy on optimising production by 2%, while talent topics rarely get the same level of urgency, except in a crisis.”
- Double down on what matters to employees
Employees are looking for a lot more than just salary these days.
Here’s what we discovered when we did a similar survey in October 2022.
3. Understand which skills matter and invest in them
The team at McKinsey recommends:
- Finding out which skills truly matter by leveraging analytics in recruitment
- Investing in leadership skills “purposefully and methodically across sites and offices, just as miners do for technical capabilities”
- Helping talent to renew and develop themselves through capability building throughout their careers
4. Make bold moves on the social agenda.
According to McKinsey, “The ‘S’ in ESG is of growing importance for investors, rating agencies, public opinion, and employees. In addition to addressing this agenda internally (for example, massive reskilling, job creation), miners that want to continue to attract and retain the best talent must address the social impact they have on society, particularly within the communities in which they operate.”
This includes structural investment “explicitly focused on the long-term sustainability of livelihoods and communities” and taking a public leadership role to “drive consistent approaches on key societal topics”.
You can read the full McKinsey report here.
For almost 30 years MPI has been helping mining companies find the best candidates across every job category. Find out more here or get in touch today.