The Mining Industry Human Resources Council (MiHR) has provided labour market intelligence on the Canadian mining industry for over three years. Based on recent industry growth rates, GDP forecasts, retirement projections, and average turnover rates, the industry will need to hire up to 10,000 new workers per year to meet anticipated production targets. This is up from 8,100 workers per year just two years ago.
The suggested solution to this recruitment challenge lies in a multi-pronged strategy targeting youth, aboriginal people, women, and immigrants, while maximizing retention and delaying retirement. MiHR recently conducted research to examine the possibility for recruiting and retaining experienced workers from declining sectors as another potential source of labour to meet growing HR needs. This study paid particular attention to the issue of recruiting workers from industries with a surplus of labour. Industrial workforce transition issues, including barriers and best practices in engaging workers from declining sectors, were also addressed.
Throughout the research, three declining industries in particular emerged as potential sources of new workers for mining: farming, forestry, and manufacturing. Many current or former employees in these industries have skills that are similar to those needed in mining. Workers in these sectors also tend to be accustomed to shift work, have experience with heavy machinery or process operations, and often have training that is relevant to the mining industry (e.g. safety, leadership). In the case of forestry and farming, individuals are often located in proximity to areas where mining operations are found (e.g. rural, northern). Many of these workers would therefore be a good fit for the mining sector.
The forestry industry emerged as the most likely source of potential labour for mining. The integrated forestry sector has seen employment decline sharply after the peak in 2003. During this recent contraction, forestry has shed almost 50,000 jobs (from 350,000 to 300,000 in approximately four years). While dramatic, this plunge in employment has left the industry above the previous cyclical bottom. In 1992, the sector’s employment dropped to approximately 275,000. This implies that further job losses in the forestry sector are still probable. Interviews with management of forestry companies confirmed this and they anticipate further permanent job losses in Quebec, Ontario, and British Columbia through 2007 and 2008.
Downsizing has hit all three sub-sectors of the forestry industry: forestry and logging, paper manufacturing, and wood product manufacturing. However, forestry and logging has experienced the sharpest decline, losing a full 25 per cent of its labour force in just four years.
Key issues for the structural decline in the integrated forestry sector include:
- Long-standing trade policy and tariff issues with lumber exports to the United States
- The recent slowdown in US housing construction
- The appreciation of the Canadian dolla
- Declining circulation and weight of newspapers in Europe and North America
- Rising energy costs, particularly electricity pricing in Ontario
Although the situation is grim and unfortunate for forestry companies and workers, it poses a unique opportunity for the growing mining sector. The mining industry has an exceptional opportunity to transition workers from the ailing forestry companies. Because forestry labour adjustment will occur through plant closures, forestry companies have limited capacity to retain skilled workers or offer targeted early retirement packages in the affected areas. This means that the age distribution and occupational mix of individuals being shed by this sector will include younger, more mobile, and more highly trained individuals.
Key occupations being shed from forestry that are of interest to mining include:
- Heavy equipment operators
- Heavy duty equipment mechanics
- Industrial electricians
- Mechanical engineers
- Electrical engineers
- Machine operators
- Instrumentation technologists
Existing labour market transition literature suggests that recruiting individuals from declining industries is not a viable long-term labour solution for an industry. However, it can be a short-term fix, contributing to an overall strategy in addressing the growing supply - demand gap in human resources. Recruitment initiatives targeted at workers from declining sectors such as relocation subsidies, sponsored gap training, or flexible shift options will certainly help attract these workers. The availability of a stable job seems to be a sufficient motivator for many workers to transition to a new industry, but increased wages are often required to lure them to a new region. Given that the average salary in the mining industry is 28 per cent higher than that of the forestry sector, the probability of transitioning these workers is excellent.
For more information on the labour market transition initiatives or to obtain a copy of the report, please visit www.mihr.ca or contact Ryan Montpellier at RMontpellier@mihr.ca.
Ryan Montpellier is the director of operations at MiHR.