February 2009

HR Outlook

Innovation amid uncertainty

By J.P. Chabot

The McKinsey Quarterly recently published an article entitled “Upgrading Talent: A downturn can give smart companies a chance to upgrade their talent.” The article highlights how workforce rationalization and other short-term cost-cutting efforts undertaken during downturns can jeopardize the talent strategies of companies. Evy Hambro, manager of BlackRock’s World Mining Fund, has suggested that current circumstances notwithstanding, commodity demand fundamentals are sound and that the global market crisis is actually a cash flow problem. Structurally heavily indebted, the mining industry faces many cash flow-related constraints, which could necessitate the restructuring of some mining companies.

Steps can, and must, be taken to minimize the impact of any restructuring on the long-term availability of a highly skilled and mobile mining workforce. Companies typically respond to downturns with hiring freezes, aggressive personnel reductions and professional development budget cuts. These measures may be justified, but the timing and methods of deploying them send a signal to current and potential employees about the company’s dedication to its workforce. Companies that are quick to lay off workers during a downturn are likely to find it difficult to recruit workers during upturns, when labour shortages are prevalent.

The mining industry can benefit from a long-term approach to developing talent during both upward and downward trends. Current events provide the industry an opportunity to refocus attention on optimizing operational processes and consolidating resources to increase productivity. But we must meet the challenge of keeping students enrolled in mining-related programs engaged with the industry. Not doing so would be gambling away our future workforce.

This downturn is an opportunity for industry to work more closely with all stakeholders on the development of counter-cyclical strategies that address both the financial volatility and the need for a highly skilled and mobile workforce. Industry can alleviate some of the negative impacts of the current downturn on the mining labour force in the following ways.

Six-month to one-year options

  • Take advantage of provincial programs that offer training options to Employment Insurance (EI)-eligible candidates. Companies who lay off workers could use these programs to bridge the period between the layoff and the time when the economy picks up again.
  • To avert temporary layoffs, consider applying to Service Canada’s Work-Share Program, which provides income support to EI-eligible workers willing to work a temporary reduced work week (the program can be used for up to 38 weeks).
  • Get engaged in MiHR’s mentorship program to stay connected to students in mining-related disciplines.
  • Look into using federal and provincial government wage subsidy programs to help  new graduates develop their mining careers (i.e. Service Canada’s Career Focus Program).
  • Offer older workers early retirement packages to help reduce your workforce through attrition.

One-year to two-year options

  • Encourage skilled personnel to return to school to complete a master’s program or a university degree to enable them to contribute to projects with a broader perspective on mining (i.e. MBA, rural development studies, applied research, etc.).
  • Help recent graduates gain experience and stay engaged in the industry through internship programs.
  • Look into using national and regional level career focus programs, administered through Service Canada and Human Resources and Skills Development Canada (HRSDC).
  • Consider placing university and college graduates into programs that can link them to the new geo-mapping initiatives that are to be funded by the federal government.
  • Look into the HRSDC’s Targeted Initiative for Older Workers to help retired workers become trainers for the next inflow of workers who may need to have their skills assessed with the Prior Learning Assessment & Recognition and the National Occupational Standards systems developed by MiHR.

Companies should take a long-term approach to their talent strategies. Some of the solutions to the industry’s challenges lie in collaborative industry-wide initiatives that tap existing programs. For further information on such programs and initiatives, please contact MiHR.

Jean Pierre Chabot is manager of research and policy analysis at MiHR, responsible for the analysis of HR policy options and constraints that impact the mining industry in Canada. Formerly the project coordinator for a number of Latin American projects, he brings an international perspective to issues facing the Canadian mining industry.

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