The big headache: Recruitment strategies for mining’s permanent skills shortage

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Experts say mining’s skills shortage is now permanent, rather than transitory. So, what strategies are available to ease the recruitment headache that causes?

The skills shortage is here to stay. The data, at least according to the analysis by Mining Journal, shows that far from mining’s current labour crisis being part of the regular boom and bust cycle, it is now a permanent state.

If that’s true, it has serious consequences for the industry, for the wider economy, and for recruitment strategies going forward.

First, let’s look at the data

Here’s what Mining Journal’s analysis found (you can read the full report here):

“In Australia, mining job vacancies took off in late 2020 after the country shut its borders to foreign skilled labour and as the states and territories shut their borders to internal migration."

Vacancies hit an all-time high of 11,200 in May 2022 and averaged more than 10,400 in the 18-month period to February 2023 (when the Australian Bureau of Statistics last published data). This peak has been more pronounced and more persistent than the only other time in the past three decades when Australia’s mining sector experienced significant labour shortages — at the height of the previous commodities boom in 2011-12 when vacancies peaked at 10,300 and averaged 9,840 for 15 months, before going into a rapid descent as the commodities boom ended.  

“Job vacancies have pulled back slightly from the 2022 peaks in each of these countries, but not enough to indicate the problem will disappear. In the meantime, the smaller and medium-sized companies — which represent the growth end of the industry — may bear the brunt.” 

Small and mid-tier companies bearing the brunt

According to Tom Reid, Director of Industry and Advocacy at the Australian Resources and Energy Employer Association (AREEA), in the Mining Journal report, the mathematics of the situation means, “you’re looking at more than a 3% shortfall in the mining industry workforce.” 

“Companies are being affected across the board, but the big miners have got a lot more money to throw at the recruitment and the retention side of things,” Mr Reid said.

“Some mid-tier mining companies are still facing labour turnover rates of 30 to 35% annually, [where] one in three employees of theirs are coming in and leaving before they reach the 12-month mark.

“The mid-tier guys share the overall threat of the skill shortages, but also have a specific problem in that they’re bleeding talent to the top tiers.” 

And the shortage is only going to get worse. AREEA has previously forecast an estimate that the 107 Australian mining projects coming onstream in the next five years would create demand for an additional 24,000 production-based roles.

It looks like we’re going to need a bigger pipeline of talent

In short, our industry is a hungry beast that requires more feeding than we’ve got the ability to shovel into its jaws. At a time when the unemployment rate is low and vacancy rates are high across practically all sectors, mining companies are fishing in a very small pond for the same talent. We need to build the pipeline of talent.

Here’s what a major report by McKinsey, published in February, found:

“Mining companies are experiencing a talent squeeze: 71% of mining leaders are finding the talent shortage is holding them back from delivering on production targets and strategic objectives. Indeed, 86% of mining executives tell us it is harder to recruit and retain the talent they need versus two years ago—particularly in specialised fields such as mine planning, process engineering, and digital (data science and auto­mation). We expect this trend to continue. Mining is not currently an aspirational industry for young technical talent to join: there has been around a 63% drop in mining engineering enrolment in Australia since 2014.”

This is an existential crisis. As an industry, it’s time to get serious about attracting more young people into mining. We need to improve the image of mining, addressing the concerns of the younger generation around everything from environmental considerations to job security. (Gen Z has an overwhelmingly negative view of mining.) We need to start selling the benefits of the opportunities of working in such an innovative and vital sector. We need to be getting into the schools, creating content on TikTok and creating YouTube content—generating awareness about the good mining does and the careers available. Whatever it takes. It’s past time for an industry-wide strategy.

Recruitment strategies in a permanent skills shortage

In the meantime, mining recruiters need strategies for attracting and retaining the best talent. As we mentioned recently in our trends for 2024 report, high salaries alone are no longer enough. There’s such a skills shortage through the whole economy that people can earn good money anywhere—often without having to leave their families and live remotely for half the year in a hot and dusty mining camp.

What employees are looking for now is the total employee value proposition you can offer. Candidates aren’t just looking for a job; they’re looking for a partner in their careers. If you want to attract the best talent, you need to offer something around work-life balance, career development opportunities, and personal growth. Candidates want to see positive evidence of who you are as a company: your values, your mission, your culture, your attitude to the environment, the way you treat your employees.

That’s a big internal conversation, but those companies that are willing to take the time and make the investment will ultimately reap the benefits in a market where candidates know what they want and are permanently in high demand.

MPI has 30 years’ specialist experience helping mining companies find the best candidates across every job category. Find out more here or get in touch today.

Dan Hatch
Mining People International