Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  
 

3.1.3 Issue 3: Recruitment and retention

Issue

Recruitment and retention remains a challenge for all mining companies at both a regional and global level. Competition for skills is particularly intense, for example, in Western Australia – where mining companies not only compete with one another, but also the booming hydrocarbon sector.

Drivers

High-commodity prices (including gold prices) – as well as strong long-term prospects for the mining sector as a whole – have been driving the development of new projects and production ramp-ups in a variety of locations. Indeed, Ernst & Young suggest that 136 new mining projects were planned or announced in 2012.1 This growth is being supported by a finite pool of mining skills that will take a long time to significantly expand.

More worryingly, the sector is facing significant demographic challenges as a significant proportion of its most skilled and experienced managers and technical specialists are becoming eligible for retirement – with no equivalent new cadre of younger workers to replace them.

This has been partly attributed to a ‘generation gap’ stemming from the 1980s and 1990s when the traditional skills pipeline was ‘broken’ in some places, due to increases in operational efficiency and a focus on maintaining rather than expanding production.2 These challenges are currently compounded by the fact that the mining sector is not traditionally perceived to be an attractive employment destination (other than with respect to remuneration) for high-potential individuals looking to forge rewarding, long-term careers.

Implications

The main impacts of labour competition and a shrinking skills pool include:

  • Increasing labour costs – feeding into a broader dynamic of higher input costs
  • Absolute skills shortages – which can act as a ‘brake’ on production and growth, with potential for project delays, downsizing or even cancellation

Although the recent slowdown in mining investment is likely to offer a degree of temporary respite in ‘the war for talent’, it is unlikely to last. There is a long-term ‘skills-gap’ that will take time to address. Many mining and related specialist positions require substantial amounts of investment, training and development – and the fundamentals of the market are unlikely to change in the short to medium term.

In this context, the ability to attract, retain and effectively deploy mining and engineering talent remains a key competitive differentiator within the mining sector.

Strategic response

The attraction, retention and effective deployment of top-talent remains a company priority.

In the short term, this means creating and maintaining high-quality teams of skilled managers and specialists that can deliver immediate results. This is not just a matter of how much we pay. It is about presenting an integrated and holistic employee value proposition that truly distinguishes itself within the market (p130).

In the medium to long term, this means building and maintaining a solid, self-sustaining skills pipeline to ensure we have a constant feed-through of equally strong replacements – and that we maintain an employee base that can offer predictability and flexibility. In this context, we believe it is important to invest in education, training and talent management – both internally and externally. It is also one of the best ways to attract high-potential individuals who want to take their careers forward.

In light of these two approaches, we place particular emphasis on:

  • Providing a more rounded employment offering that recognises the needs and aspirations of different individuals. This includes cash bonuses, share allocations, worklife balance initiatives, development opportunities and other approaches (p132)
  • Carrying out regular market reviews to ensure our pay and benefits packages are competitive in each market in which we operate. This is supported by our communication of the full value of these packages to enable like-for-like comparisons
  • Providing on-site and external training and development (p132)
  • Promoting internal mobility within the Group to help highly skilled and high-potential individuals build on their expertise in a range of international locations (p131)
  • Implementing our innovative ‘24 Hours in the Life of a Gold Fields Employee’ wellness programme to ensure we maintain a fit, healthy and motivated workforce (p135)

In addition, we employ and develop nationals at all of our mines (p134) – and place great emphasis on investing in local education and training institutions in our countries of operation (p146147). This supports the long-term development of a strong mining and engineering skills-base at both local and national levels – and reduces our reliance on high-cost expatriate specialists and managers.