May 2015

HR Outlook

How to weather the mining cycle

By Ryan Montpellier

Given the current economic climate, asking mining employers to implement a long-term workforce planning strategy can be a hard sell. The mining labour force closely shadows the volatility in commodity prices, with wild swings in hiring and layoffs. Not surprisingly, the mining sector has already shed thousands of jobs in the past year. However, to soften the impacts of ongoing volatility, workforce planning and HR strategy should evolve from short-term, needs-based staffing to a strategic function that enables organizations to mitigate business risks. This will ensure the right people are in the right positions, with the knowledge and skills to meet business and production objectives, when the market recovers.

One option during a downturn is to share human resource capacity amongst projects, thus retaining key talent. Transferring workers to better performing projects can help companies retain high performers across operations and offer developmental and career progression opportunities where appropriate. Although there are monetary costs for relocation, visas and travel, these are balanced against those resulting from the long-term loss of a worker, onboarding a new employee and the value of retaining an engaged workforce.

Employees could also explore training or working in a complementary, in-demand occupation during a downturn. This strategy allows individuals to take more ownership of their careers by planning for the upswings and downturns. One industry-based recruiter recently suggested that companies could reduce the risk of losing recent mining engineering graduates by recruiting and developing them as miners first. When engineering positions eventually do open up, these individuals would have the upper hand on their peers and would have developed a much stronger appreciation for mining operations. The experience would be particularly beneficial to those who will be advanced into a mine manager or other supervisory role.

Another option to explore before a layoff is to take advantage of various government programs designed to help mitigate changing business conditions. For example, Work-Sharing is a federal adjustment program offered by Service Canada designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity. The measure provides income support to employees eligible for employment insurance (EI) benefits who work a temporarily reduced work week while their employer recovers during a cycle. When not working, the employee receives an EI benefit, and, therefore, the cost to the employer is reduced significantly. The forestry and manufacturing sectors in particular are significant users of the Work-Sharing program.

When downsizing is the only option, or a project reaches the end of its life, there are well-documented practices that can make this period of transition run smoother. Workforce transition support instituted prior to layoffs results in better attendance of affected employees and less disruption to production and quality of work. Remaining employees are positively affected since they experience less “survivor syndrome” and have concrete evidence of the employer’s concern for workers.

In some cases, employers may also support the transition process by offering training or skills recognition services that make an employee more marketable to another potential employer. Over the last few years, we have seen Xstrata Zinc’s Brunswick mine, Agrium’s Kapuskasing mine and Northgate Minerals’ Kemess mine certify their workers through the Canadian Mining Certification program – designed to acknowledge the skills and competencies of workers in the occupations of underground miner, surface miner, minerals processing operator and diamond driller – as one component of their responsible mine closure strategy. It may seem counterintuitive to invest in an employee that is moving on, but these organizations felt that it was important to reward the service of their employees, preserve the legacy of the operation and provide their employees with a credential that will assist them in finding work post-closure. An additional benefit is that employees stay engaged during the transition, resulting in a successful mine closure.

When responsible mine downsizing or closure practices are ignored, employee trust is broken and these workers will not return to the employer in an improved market. In some cases, they may transition out of the industry altogether. The immediate effect is that operations suffer overall, as workers not subject to downsizing leave for better conditions, or in a closure scenario, leave early, preventing a successful and safe closure.

While it is challenging to make the shift away from short-term or reactionary strategies, creative and long-term approaches to ensuring our talent pool does not shrink will be essential for the sustainability of the industry over the next decade as we look to the next economic phase in the cycle and prepare to say goodbye to our many retiring workers.

Ryan_Montpellier
Ryan Montpellier is the executive director of the Mining Industry Human Resources Council (MiHR). He is a recognized expert and sought-after speaker on HR issues impacting the Canadian mining sector today.

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