Random Analytics

Charts, Infographics & Analytics. No Spinning the Data. No Juking the Stats

Category: Workforce Planning

Random Analytics: Abbott’s Promise. 1-million jobs in 5-years (to Jan 2014)

“The next Coalition Government will create one million jobs in five years and two million jobs in 10 years,” he said. “This pledge is achievable given our record and policies.” Tony Abbott (27 Nov 2012)

First of all, Labor side should be commended for its employment story during its term in office (2007-2013) where 955,200 jobs were created. Saying that one of my key criticisms of the then Employment Minister, Bill Shorten was that the spotlight was always on total job creation rather than looking at full-time and part-time job breakdowns. During the Labor years 450,400 part-time jobs were created against 504,800 full-time ones.

Currently, there is a lot of discussion in Australia around employment and unemployment at the moment. In the past month many companies have announced large job cuts either in the immediate or near future. Recent examples with direct jobs lost include Holden (2,900), Toyota (2,500), Forge (1,400), Rio Tinto (1,100), Qantas (1,000), Electrolux (544) and just today Alcoa (980). The seasonally adjusted unemployment rate hit 6% for the first time since July 2003 (when it peaked at 6.1%).

The RBA is has for some months forecast that the unemployment rate would hit 6.25% during 2014, then steadily improve from 2015. That view remained unchanged in its most recent Economic Outlook.

Thus it would be unfair to immediately thrust blame on to Tony Abbott and the recently elected Coalition government as many in the opposition camp are doing.

To that end I thought I might shine a light on the Abbott promise. 1-million jobs in five years. Here is a look at the data for the first four months to January 2014.

1-AUSEmployGainsLossestoJan2014_140218

First chart is a look at employment gains and losses since the Coalition took power in September 2013. Two points:

  • The total jobs are slightly negative, that is 9,949 jobs lost; and
  • The sample size is way too small to start analysing and unemployment figures from the ABS are generally considered a lagging indicator.

2-JobCreationtoJan2014_140218

Second and last chart looks at job creation in three parts. Total job creation (green), full-time employment (blue) and part-time employment (maroon).

In effect there have been 56-thousand full-time jobs lost against 46-thousand part-time jobs gained for a gross loss of 9,949 jobs.

Final Thoughts

Bill Shorten’s recent commentary around 54,000 job losses (or one job every three minutes) might make a good sound grab but actually only reflects full-time employment losses over a very short timeframe.

I think it’s disingenuous of him as the former Minister to use total employment figures then but now only concentrate on one set of numbers.

That aside I wonder if the RBA has underestimated the unemployment nadir at 6.25% which will make it much harder for Tony Abbott to hit his 1-million jobs in five years promise.

Only time will tell. I’ll keep you updated.

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Random Analytics: US/Australian Prison Populations against other Job Types

Saki Knafo of the Huffington Post posted an interesting article and infographic about the massive size of the US prison population against employee’s, such as specific engineering and education job types as defined by the Bureau of Labor Statistics.

1 - 051113_Infographic_SKnafo

Excerpt: If sitting in a prison cell was a job, it would be one of the most common jobs in the United States. In 2012, there were some 1,570,000 inmates in state and federal prisons in the U.S., according to data from the Justice Department. By contrast, there were about 1,530,000 engineers in America last year, 815,000 construction workers, and 1 million high school teachers, according to the Bureau of Labor Statistics.

For the full article and Saki’s observations click here.

I thought it would be interesting to do a comparison infographic using Australian data.

2 - 131109_AusPrisonvsEmployees_v1.0

The key finding of my comparison infographic is that this highlights the extraordinarily high incarceration rate for the United States where around 716 per 100,000 people are in prison. In Australia the figure is 130.

For context some believe that North Korea has an incarceration rate of between 600-800!

So, then when you compare it against job types the differences really stand out. Australia has 200,615 working engineers (there are actually 245,631 qualified engineers) and according to the most recent census 125,028 school teachers. My secondary school teacher data is based on a tweet by the ABS which is 1,000-higher than the current public estimation from the 2006 census.

Although I was happy with most of my data comparisons not everything quite translates from the United States to Australia. Detailed numbers by the Australian and New Zealand Standard Classification of Occupations (ANZSCO) is difficult to come by whereas the Occupational Employment Statistics detail provided by the Bureau of Labor Statistics was very detailed.

Thus engineers, social workers, secondary school teachers, childcare workers and enrolled nurses (the US equivalent being nursing assistants) are very like-for-like occupation types.

Where I did take some license in my comparison was with the following:

  • US construction labourer vs. Australian trade assistants. Could only find data in relation to the electrical and telecommunications sector;
  • US lawyers vs. Australian barristers. I believe the qualifications and skillset are the same but wouldn’t bet my house on it; and
  • US physicians & surgeons vs. Australian surgeons. Again, I believe the numbers to be comparable but with the caveat that I took my numbers from the Royal College of Australian Surgeons only.

More detail on Australian sources:

Prisoners: http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/24B61FAA213E5470CA257B3C000DCF8A/$File/45170_2012reissue.pdf

Engineers: https://www.engineersaustralia.org.au/sites/default/files/shado/Representation/Stats/statistical_overview_2012_1.pdf

Secondary School Teachers (including alternate): http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/90051CE31F11385ECA2579F30011EF35/$File/42210_2011.pdf

3 - 121127_Tweet_2011Census_SecondarySchoolTeachers

Enrolled Nurses: http://joboutlook.gov.au/occupation.aspx?code=4114&search=keyword&Tab=stats&graph=EL

Social Workers: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003Aug%202013?OpenDocument

Electrical & Telecom Trade Assistants: http://www.open.edu.au/careers/construction/trades-assistants-electrical-or-telecommunications

Childcare Workers: http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/7CD60F39593FBCEACA2579120016E0DA/$File/41020_community_sep2011.pdf

Surgeons: http://www.surgeons.org/media/437871/rpt_racs_workforce_projection_to_2025.pdf

Barristers: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/8667.0Main%20Features32007-08?opendocument&tabname=Summary&prodno=8667.0&issue=2007-08&num=&view=#AnchorEmp

Random Analytics: Mining Workforce Planning Scan (Sep 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 data items (expressed as categories) the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how Australian MINING is positioned from a workforce planning perspective.

Two Solid Months

With the Australian election now over there has been a return to confidence in the mining sector not seen since June 2012 when more than eight months of positive, or at least neutral employment sentiment were recorded (my analysis currently only goes back to November 2011). In terms of the mining workforce planning scan the trend is confirmed when the employment sentiment is consistently zero or above (see Chart 2) AND the employment category number is below Work Health & Safety (WH&S) or as the market tightens Industrial Relations (IR) (see Chart 1). We are not quite there as there is still some delayed cost cutting going on along with new ventures being announced.

Learning & Development & Research & Development (L&D/R&D) recently spiked during the August month on the back of a lot of election chatter around mining skills as an answer to other slowing sectors (see Chart 1 & 2). This has returned to a more normalised value during September but was an interesting outcome from the 7 September Commonwealth election.

Employment numbers were strong but it should be noted that many of the announcements made were actually on the infrastructure side making up 6,270 (or 87%) of the total monthly employee gains reported and most of those were actually detailing the tier 1 or tier 2 arrangements for iron projects in Western Australia or LNG projects in the Surat Basin, Queensland (see Chart 3).

Chart 1: Workforce Planning Categories

 2 - Mining_Categories_Sep2013_131014                      

The following chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and the frequency of stories.

Chart 2: Positive/Negative Index

3 - Mining_PosNegIndex_Sep2013_131014

The next chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and their positive or negative weighting.

Chart 3: Mining Employment Gains & Losses

4 - Mining_Employment_Sep2013_131014

The following table looks at the reported employment gains and losses. Job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit information relating to redundancies. Employment gains are forecast and include infrastructure phases. Often employment gains are overstated as they link to public relations exercises.

Final Thought or Prediction

I see another month of transition data coming in as some companies continue to tidy up their less difficult workforce development areas (contractors, costs and corporate), some companies move beyond the low hanging fruit to address more difficult components of their strategic workforce planning and a number of companies launch greenfields proposals.

Interestingly, I also see the commencement of a new phase of Industrial Relations activity as commodity prices solidify and productivity ramps up.

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (August 2013). If you are interested in “How does the global economy work in a world of reducing ‘work’” then please check out my other blog PeakJobs.

Random Analytics: Mining Workforce Planning Scan (Aug 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 data items (expressed as categories) the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how Australian MINING is positioned from a workforce planning perspective.

Election Bounce

If there was one key theme of the August it was that sentiment shifted from extremely negative to very positive. In fact, the sentiment reading of +14 was the highest I’ve recorded in 22-months of confirmed data.

With most commodity prices stabilised or increasing, the Australian dollar reducing into a more competitive range and miners now fully focussed on increasing productivity have we reached the point where the sector is on the rebound?

At this stage I’m going to say, maybe.

The mining industry has made no secret of its distrust and dislike of the current Labor government (no matter who leads it) and its desire to see a new Coalition team in place. No matter whom leads the next government the following is still true:

  • Commodity prices will still be dictated by China for the foreseeable future;
  • The Australian dollar will continue to rise or fall on the whim of US Federal Reserve decisions;
  • Mining took its eye of the productivity ball during the boom. Future productivity gains will come from the sectors ability to contain its structural costs by not re-inflating all of its input costs (again).

The data does look good for August. It’s certainly the best that I’ve seen in a long time.

It could just all be election bounce though.

Workforce Planning Categories

  2 - Mining_Categories_Aug2013_130902                     

The following chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and the frequency of stories.

WH&S (Work Health & Safety) was the leading category with 20-stories (24.7%). Generally WH&S is one of the leading categories when mining is tracking well or during BAU (Business-As-Usual) as safety programs and incidents reporting is reasonably consistent (averaging 18.25-stories per month in 2013).

Employment was the second leading category with 19-stories (23.5%) as the mining sector paused its cost cutting activities after the election was called and recommenced discussing future prospects. L&D/R&D (Learning & Development/Research & Development) was the third category with 11-stories (13.6%) without any election related announcements.

Subjects that were not discussed in August were SkillsShort (Skills Shortages) and Work/Life (Working Life Fit often referred to as Work Life Balance). The last Skills Shortage story was in March, the only one of the year (or just 0.0006% of all stories). That’s not to say there are no operationally critical, critical or hard-to-fill roles in mining, just the sector has gone through two heavy phases of cost cutting and job shedding thus few employees are moving and turnover rates would be low.

Positive/Negative Index

3 - Mining_PosNegIndex_Aug2013_130902

The next chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and their positive or negative weighting.

The most negative indicator for the month was IR (Industrial Relations) with a -4 sentiment. As the only negative reading greater than -1 and the most positive month in 22-months of data I wouldn’t read too much into this, especially during an election month. That said, with the Coalition almost certainly forming government next week IR could become a more interesting space.

L&D/R&D was the leading positive category with a +7 for August, the highest positive monthly indicator for 2013. There were a lot of announcements, like the Tasmanian University Research Lab co-funded with Newcrest or the University of Wollongong’s opening of the Joy Global Remote Access Facility as examples.

Given the recent $5.77-billion dollar write-off and job slashing I wonder where Newcrest found $2.5-million to open anything non-core business? Very curious.

Mining Employment Gains & Losses

4 - Mining_Employment_Aug2013_130902

The following table looks at the reported employment gains and losses. Job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit information relating to redundancies. Employment gains are forecast and include infrastructure phases. Often employment gains are overstated as they link to public relations exercises.

With just 22-jobs confirmed lost and 6,885 jobs projected the employment numbers in August were very impressive.

Although it still has to complete the Commonwealth Department of Sustainability, Environment, Water, Population and Communities EIS the Waratah Coal project received Queensland State approval. Officially this project will generate 3,500 infrastructure jobs from 2014 and 2,300 operational jobs from 2016 onwards. As a rule of thumb I think of the coal industry as turning every four infrastructure jobs into one FTE when they commence operations. So 2,300 in 2016 is probably closer to around 900 operational roles.

The Shell Prelude floating LNG were a little more honest when they forecast their job numbers suggesting that 1,000 jobs would be created by 2017 including 350 on the platform and 650-indirectly. LNG is a worse converter of infrastructure to operations phase employment and this is a project where most of the construction is modulised offshore then shipped in. I’ll be following this one closely just to reset my modelling.

Internationally, job shedding is ongoing with 1,700 cut from Oyu Tolgoi (Mongolia) and 920 gone from Tampakan (Philippines).

Here’s a look at the Aug data.

5 - Mining_Data_Aug2013_130902

Story of the Month

The story of the month is the Workplace battle which looms over Collinsville and the increasing use of transit workforces as industrial relations instrument rather than a response to skills shortages or for economic considerations.

Final Thought or Prediction

With the two party preferred split currently sitting at 54-46 (2/09) in the Coalition’s favour it is highly probably there will be a change of government on Sunday.

I’ll enjoy reading this blog in three years but my prediction will be that a Coalition government will not necessarily mean a radical overhaul of Industrial Relations during their first term, even  with a strong push from the business community (*unless there is a massive downturn which impacts Australia).

Happy Election and don’t forget to vote.

Random Analytics: Egypt – A Workforce Planning View

Back in February 2011, at the height of the Arab Spring, I wrote a blog about Egypt which received a lot of criticism at the time.

With the passage of time however it seems that my worst fears are now becoming reality.

Here is the original piece (20 Feb 2011) titled Egypt: It’s about the Economy and Work, not Democracy via HR.com.

I have a vivid memory of my final year at university.

I was giving a review on Dr Michel Aung-Thwin’s work “Parochial universalism, democracy Jihad and the orientalist image of Burma: The new evangelism” and was rounding up the argument that without security first democracy cannot work, especially in the Asian context. At the end of my presentation one of my fellow students jumped up from his seat and said forcefully that I had ‘crapped on the ideals of democracy and I was a disgrace to the university’. He subsequently stormed out of the lecture room without giving me a right of reply and I went on to get a high distinction in the subject.

Dr Michel Aung-Thwin argued that without economic and physical security you cannot have democracy, or at least a democracy that will last over the longer term.  His work in relation to Burma in the early part of the previous decade is relevant to the issues facing the Middle East and Northern Africa today.

The crisis gripping that region, commencing in Tunisia and Egypt but now impacting other states such as Libya, Yemen and Bahrain is more about the economy than it is about democracy.

Let’s consider the short-term economic implications for Egypt (and they are bleak):

In Egypt the population wants a rapid normalisation but after a month of protests, a significant loss of foreign income (reportedly $300M USD per day) and a military Junta in place, at least until September this is unlikely. A week after the democracy protests ended there are now protests in relation to pay and conditions and many of the key elements of the economy are closed, including financial institutions and many businesses. The Global Financial Crisis has hit Egypt hard and rising inflation, especially rising food prices are hurting the poorest first.

However, the long-term Workforce Planning implications for Egypt and the region are bleaker:

The median age (that is the age at which half the population is older and half is younger) for the West is approximately 40 (Australia has a median age of 36.9 while in Japan that rises to 44.6). Due to a 3 – 4% population growth in the Middle East and North Africa the median age is much lower. In Tunisia that corresponds to 29, Egypt 24, the West Bank and Gaza 20 and in Yemen just 17.  In Saudi Arabia, a rich country that imports most of its working population from the poorest regions of the world around 70% of the population is sub-30.

In Egypt 80% of the population with an age of 29 or less are unemployed. Gender disparity, an issue common to the region is also worrying with only 18% of women out of university finding employment, while for men the rate is 50%.

Recently the International Labour Organisations estimated that the Middle East and North Africa region alone would require 100,000,000 million new jobs to fulfil the requirements of the new entries coming into the system by 2020!

Workforce Development is also an issue. Egypt has an education system which is poorly staffed (teachers in the Middle East are poorly remunerated and trained), poorly maintained with aging infrastructure and legacy curricula but heavily attended. For those who can afford to get a university education in Egypt they then have issues finding employment. Dr Hassan Hakimian, the Director of the London Middle East Institute recently discussed the fact that is takes a university graduate up to 15-years on average to enter the state or public sector.

If you consider this from a Workforce Planning perspective then someone who has worked in a sector or industry for 15 to 20-years in the West would be considered mid-career and perhaps looking to move on to something else or moving up into a higher level of management. In the Middle East and North Africa it may just take this long to get into the system and this will have ‘lag-effect’ issues. One obvious ‘lag-effect’ will be the best and brightest in Egypt and other parts of the region will look to the West for employment opportunities. Why wait until 2026 for a job?

Egypt has a long history of expelling Pharaoh’s from power that couldn’t provide sustainable conditions for the population. Mubarak and his aging cohorts in Egypt are just another dictatorial link in that chain.  The challenge, initially for the Junta but over the longer term for any democratically elected government in Egypt will be to normalise the economy and to get people working again.

If they don’t then the issues facing the region will be far graver than what we are currently witnessing.

As confronting as these statistics are the data has not improved over the past 30-months.

There is no doubt that the Egyptian military (a significant business entity in its own right), followed by the  democratically elected government of Mohamed Morsi and in recent months the interim government post overthrow have not been up to the challenge of improving the economy and getting Egyptians working again.

To emphasise this point here is a look at the official Egyptian unemployment data since 2007.

1 - EgyptianUnemployment_130815

It should be noted that the Central Agency for Public Mobilization & Statistics only counts those ‘individuals who are actively looking for a job but cannot find work’. Given the facts that I presented in early 2011 I would guess that the participation rate in Egypt is staggeringly high, yet official movements in unemployment are still very good indicators of the health on any economy.

I’m not a country specific specialist (outside of Australia of course) but I am a Workforce Planning specialist and the facts that I stated in 2011 have not changed. In fact I would suggest with the continued political instability the situation that I described back then with a further 1.5-million Egyptians looking for work and unable to find it is now worse.

With the very real possibility of Egypt on the brink of large scale violence, even civil war the situation is no longer just grave.

It’s a disaster.

Random Analytics: Mining Workforce Planning Scan (Jul 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 category metrics the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how the industry is positioned from a workforce planning perspective.

Discussing Automation (again)

Although Augmentation/Automation only had four stories for the month of July (representing 3.9% of total inputs), the subsequent robust discussion on several forums captured the attention on many industry commentators. University of Queensland’s Centre for Social Responsibility in Mining (CSRM) set off the debate when it released its Exploring the social dimensions of autonomous and remote operation mining: Applying Social License in Design report.

I discussed the subject on LinkedIn via the MiningIQ forum. It’s a lengthy discussion but my comments in relation to employment, posted 24 July 2013 included:

As welcome as this report is, I actually believe the authors are not fully recognising the full downside risks of a fully automated mining environment. Mining currently only employs around 264,000 persons (via Skills Info and correct as at Feb 2013). A cut of 50% in an open pit environment would not necessarily be picked up on the automation side, nor through large scale production increases thus you could start forecasting a peak jobs horizon for mining employment numbers in Australia in the short to medium term.

I also believe that the 50% number of open pit reductions is probably conservative. Just thinking about an Operator Hauler FIFO 14/7 shift with 3 groups in my mind’s eye I can immediately conceive of an 80% reduction as a baseline once an automated system was implemented!

I also commented on the safety issue 27 July 2013:

Within a decade I see a case where it will start to become MORE (not less) expensive, at least from an insurance perspective, to choose to operate heavy machinery with only human inputs. Let me be very clear here. As data mining becomes more commercially aware (intrusive) insurance companies will eventually overcharge or refuse to insure those industries which fail to incorporate strict augmentation and robotic controls on industries that utilise heavy equipment including miners.

Many people see automation as an all or nothing argument. That is its robotics and automated systems over all human inputs. This is not the case. My final comments on the forum, added 31 July 2013 covered that as well:

At no time has anyone on this forum discussion or myself stated that there will be no employment in mining. There will always be a requirement for onsite operational and maintenance employee’s, just the numbers will be much lower and the KSAOC’s will need to be much higher. (FYI: Knowledge, Skills, Attributes & Other Capabilities).

Megan Edwards (Editor and Director of MiningIQ) did a good write up of the main points, including some of my comments via Cost Reduction, Automation and Change Management – a Natural Trifecta? (Note: You will need a sign-on to access the story).

Here are the analytics and analysis from July.

Workforce Planning Categories

2 - Mining_Categories_Jul2013

The following chart is an 18-month look at 14 mining related workforce planning categories and the amount of times it features as a story.

Employment was the leading category with 42-stories (41.2%), the sixth consecutive month as lead category and almost unchanged in terms of weighting from the June with 38-stories (41.3%).

For the sixth month WH&S (Work Health & Safety) was the second leading category with 14-stories (13.7%). AOD/Crime was third with eight stories (7.8%).

This is the first time AOD/Crime has finished in the top 3 as a category with data going back to January 2012. Its elevation is due to a noticeable rise in incidents plus an increased willingness for mining companies to report, whereas in the past they may have not discussed these matters publically. An example of a recent incident is an act of sabotage which occurred on a Bechtel worksite on Curtis Island, Queensland. It should also be noted that the ICAC Commission did not feature in my AOD/Crime data as it never impacted on workforce planning or employment.

I’ve also included some key time periods which underline the 18-month story. July 2012 was the commencement of the commodity crash and the first phase of job and cost cutting which saw a spike in Employment related stories (mainly negative). By December 2012 the commodity prices had stabilised somewhat but off peak pricing. At the time I thought that the mining sector had returned to Business-As-Usual (BAU) but from mid-February I’ve picked up another round of job and cost cutting impacting on Employment. This second phase is currently still ongoing and deeper in terms of time period, negative sentiment and employment impact than the first round (Jul-Oct 2012).

Positive/Negative Index

3 - Mining_PosNegIndex_Jul2013

The next chart is an 18-month look at 14 mining related workforce planning categories and their positive or negative weighting.

Employment continues its highly negative trend with a further dip in July. At -18 it’s not at its worst level on record which was -20 in September 2012 but it is close enough to warrant further investigation.

At the other end of the scale Engagement recorded a +4, the tenth time in 18-months that it has been the most positive indicator.

Mining Employment Gains & Losses

4 - Mining_Employment_Jul2013

The following table looks at the employment current reported gains and losses. Reported job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit the amount of information in relation to redundancies. Employment gains are forecast and include infrastructure phases of employment. Often employment gains are overstated as they link to public relations exercises.

July is the fourth month this year where reported employment losses were greater than 1,500. With the Queensland Resources Council stating that more than 7,000 mining jobs were lost in Queensland alone the question that I’ll be looking at later this month in a separate article will be “has mining reached its peak jobs number”.

Here’s a look at the July data.

5 - Mining_Data_Jul2013

Story of the Month

Did you know that helium is used in the production of semi-conductors and utilised for Magnetic Resonance Imaging (MRI) devices? I was not aware that the United States had a Federal Helium Reserve and that rationing of the gas has already happening. Nothing to do with workforce planning but a great article by Brent McInnes and the pick of my mining reads for July.

Final Thoughts

Last month I stated that if we had another bad set of Employment numbers in July we would be in a period similar to the commodities crash of July to October 2012.

Upon reflection I’d say that we have now exceeded the commodities crash in terms of employment friction.

Production numbers are certainly up. With more supply capacity coming on-line in coming years and some companies still locked into forward contracts (which means they are shipping commodities, namely coal at less than the total price of production) you won’t see an immediate rebound in pricing.

The risks, especially for employment are on the down side.

This is going to mean further job shedding as companies continue to tighten fiscal belts and this second phase of cost cutting looks to be ongoing, at least in the short term.

Thus more friction and workforce planning pain for both employers and employees.

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (June 2013).

Random Analytics: Mining Workforce Planning Scan (Jun 2013)

The Mining Workforce Planning Scan is a quasi-quantitative report card built from relevant online industry magazines and media sources. Utilising 14 category metrics the scan collates relevant stories over a calendar month period to give a picture of how the industry is positioned from a workforce planning perspective.

Body Count

After last month’s poor Employment numbers which dipped below -10 negative sentiment for the first time since the commodities crash of August through to October last year I stated that if this route were to continue then I would be very concerned, especially if the numbers being cut were more than just peripheral cost cutting.

The numbers were bad all month but the last week of Financial Year 2012/2013 was especially brutal for coal which reported a loss of more than 1000-jobs in a single week. Gold was also very negative with more jobs and reviews being shed globally.

I’m also not convinced about the big operational employment numbers forecast to come out of future mega-mines such as Kevin’s Corner (QLD) or refining capacity like the Curtis Island facility.

Looking at a recent example of refining from Portugal José Manuel Fernandes stated:

Last April, GALP [a Portuguese energy conglomerate] inaugurated a renovated refinery in Sines. At €1.4bn, it is the biggest industrial investment in the history of Portugal. It will have a huge impact on our balance of payments, because we will export diesel fuel. All of this is excellent, except when it comes to the impact in terms of jobs. Only a hundred people will benefit. That is next to nothing, and it is an example reveals the dilemma of modern economies. Huge investments, including investments in heavy industry, are capable of having a significant impact on competitivity and on the trade balance, but they create very few jobs. Sometimes they even reduce the number of employees. What is true of GALP is also true for most of the industrial sectors in Portugal, as well as for the rest of Europe.

It’s been a tough month for mining and I’m not convinced we have seen an end to the bad news.

Categories

Employment was the leading category with 38-stories (41.3%), the fifth month in a row and a record high over 18-months of data analysis. The next highest Employment tally was September 2012 with 36-stories (39.6%).

Like April, WH&S (Work Health & Safety) was the second leading category with 14-stories (15.2%) and IR (Industrial Relations) and FIFO/DIDO were equal third with 9-stories (9.8%).

If you want to get a feel for where mining is going there have been no stories recorded for SkillsShort (Skills Shortages) in June and only one article, thus far, in 2013. For context during the period Jan-Jun 2012 there were six SkillsShort stories.

What this is telling me is that mining is cutting employee’s quickly enough that new ventures have enough candidates to fill most of their hard-to-fill and critical roles and the operational critical roles (generally only around 5% of a workforce) are holding onto positions rather than risk a move.

2 - Mining_Categories_Jun2013

Positive/Negative Index

From a +4 in March Employment has been on a steady reversal in terms of sentiment. Returning a -4 in April (-8 points) it has continued its rapid decline with -11 recorded in May (-7 points) and most recently a -16 (-5 points). Only September 2012 was more negative when a -20 was recorded.

On the positive side both Engagement & FIFO/DIDO recorded the monthly high of +3. Engagement usually tracks pretty well but FIFO/DIDO as the best indicator for the month comes as a surprise. Looking at the detail there was only one negative story which looked at FIFO mental health and four positives. Two of the positives looked at changing the FIFO/DIDO workforce to better suit local conditions, one was a response to the negative press FIFO has received and another was a FIFO support consultancy which is owned and operated by a miner’s spouse.

3 - Mining_PosNegIndex_Jun2013

Mining Employment Gains & Losses

May was the second month that saw 2013 new employment numbers fewer than 1,000, although there were some employment projections as far out as 2020.

4 - Mining_Employment_Jun2013

Here’s a look at the June data.

5 - Mining_Data_Jun2013

Story of the Month

FIFO is a tough business, especially for families so it was nice to see the story on Anna Rushton (I’ve linked the original story via The West Australian) who has started her own little consultancy FIFO Success. As a mum and wife to a FIFO miner she obviously could see a business opportunity!

Final Thoughts

If we have another set of -10 or worse numbers for Employment sentiment in July we are then in a period similar to the commodities crash from August last year.

Given that production numbers are starting to ramp up (especially as coal and iron ore capacity comes on line), there is softening demand (especially from China) and declining commodity prices I wouldn’t be surprised if we continue to see more bad news for mining and miners.

 

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (May 2013).

Updates (10/07/2013)

Random Analytics: Mining Workforce Planning Scan (May 2013)

One Step Forward, Two Steps Back

There has been a marked decrease in mining industry Employment sentiment since the recent high experienced just three months ago in March, returning to levels I have not seen since the commodity crash of mid-2012. At the same time as Employment sentiment is hitting worrisome levels the discussion about skills shortages in the mining sector has been null and void for 2013, potentially reflecting an industry that is waning even faster than the pundits are suggesting by the reducing FDI (Foreign Direct Investment) figures.

To highlight this issue Coffey announced 54 projects that it had projected consulting on were either delayed or cancelled with a Q4 reduction in revenue of nearly $14-million (see Geosciences Contracted Projects Delayed or Cancelled and thanks to Andrew Duffy for tweeting this prior to his overseas trip). This loss of revenue may well result in the loss of around 150-jobs from the Australian Geosciences and Project Management business.

1 - Coffey-Projects-Cancelled

While some of the figures look grim, projects are still going ahead. During the month an iron ore junior, Sherwin Iron got the nod while discussions are progressing on all the mega-coal mines in Queensland are still progressing (although whether its momentum carrying it forward may be a question worth asking). Even while coal struggles, juniors, such as Taroborah Coal are still moving ahead on community consultations.

It really is a case of one step forward, two steps back.

Categories

Employment was the leading category with 24-stories (25.5%), the fourth month in a row. Of the past 12-months, Employment has been the leading category nine times centred around the commodity crash from mid-2012 and in the New Year as continued cost cutting has impacted on jobs.

Like April, WH&S (Work Health & Safety) was the second leading category with 23-stories (24.5%) and IR (Industrial Relations) was third with 11-stories (11.7%).

If you want to get a feel for where mining is going there have been no stories recorded for SkillsShort (Skills Shortages) in May and only one article in 2013. What this is telling me is that mining is cutting employee’s quickly enough that new ventures have enough candidates to fill most of their hard-to-fill and critical roles and the operational critical roles (generally only around 5% of a workforce) and holding onto positions rather than risk a move.

2 - Mining_Categories_May2013

Positive/Negative Index

For the first time since October 2012, Employment has returned to being the most negative indicator. With five positive and 16-negative stories which resulted in a minus -11 reading for May. What is more concerning is that just two months ago this category had its highest reading in a year and looked to be on an improved trend-line.

For the third consecutive month and with three positive stories and nothing negative reported L&D/R&D (Learning & Development/Research & Development) finished as the most positive indicator. Given that it looks at mainly positive stories about mining L&D investment or education programs over the past 12-months this indicator has been the most positive on six occasions.

3 - Mining_PosNegIndex_May2013

Mining Employment Gains & Losses

May was the first month that saw 2013 numbers fewer than 1,000 (with no employment opportunities discussed in 2014). With just 1,190 jobs new positions reported over the next five years it was also the worst month in terms of employment projection on record for this year.

As discussed in the introduction there were three articles where the number of infrastructure and operational jobs on offer exceeded 100. They were Sherwin Iron (600), Taborah Coal (330) and Northern Platinum (200 from 2015). On the negative side Coffey were looking to cut 150 followed by Transfield (113), BHP Iron (100) and Boggabri (106). Controversially, the job losses which hit Boggabri in NSW were featured on ABC 7.30 as local workers were cut over 457-visa employees.

4 - Mining_Employment_May2013

Here’s a look at the May data.

5 - Mining_Data_May2013

Story of the Month

My pick of the month is a story of three parts. It’s a story of a company trying to de-unionise its workforce by recruiting cleanskins. Based on the numbers it’s also a fantastic recruitment story for a 100% FIFO workforce. Again, based on the numbers it’s also a tale of how hard it must be to break into the mining industry without relevant experience.

After taking 14,000 applications for the 750 jobs on offer for Brisbane residents in its Bowen Basin mines, BMA closed off its Cairns recruitment campaign after receiving 8,000 applications for just 250-positions. This means that for Brisbane there were 18.7 applicants per position, while for North Queensland the ratio was 32 to one.

With this level of positive attraction in the recruitment campaign (and even with a potential 15-25% turnover for FIFO workers) it would now seem reasonable to suggest that the union campaign against BMA waged through to 2012 was misjudged to the detriment of local workers. Obviously the tier one miners will accept more expensive deployment models and malleable staff over instability.

It will be interesting to see how the IR story plays out in coming months if the mining sector continues to ease.

Final Thoughts

In my February Mining Workforce Planning Scan I stated that the mining sector had returned to Business As Usual, although cost cutting would be ongoing. Now that we are in the first week of June with End of Financial Year just around the corner you can just see the hint of troublesome currents.

Although a minus -11 Employment sentiment is awful, it’s not as bad as September 2012 when the commodity decline saw that number down as low as minus -20.

If we were to see a similar or worse number in June I would then be starting to get really concerned, especially if we started to see more than just cost-cutting numbers come through.

But then again, things could just return back to normal.

Note: My previous post on Mining Workforce Planning Scans can be found at Random Analytics: Mining Workforce Planning Scan (Apr 2013)

Random Analytics: Mining Workforce Planning Scan (Apr 2013)

Robotic Replacement expands in Australia

I spend a lot of time analysing either the stories with the most content or with the most positive or negative impact. Some categories don’t get the coverage in terms of either content or impact that they deserve.

Although it only had two stories for the month of April the indicator Augment(ation), which tracks all things to do with work augmentation, automation and robotic replacement was the category with the most impact.

The first story was the announcement that Hitachi will commence trailing automated trucks at the Meandu coal mine in the between the Sunshine Coast and Wide Bay Burnett regions of Queensland (just 2-hours north-west of Brisbane). The first three EH5000 AC trucks were expected to arrive by the end of April with Stanwell running trails over the next three-years. This is also the first real robotic replacement deployment in Queensland within range of the most extensive coal deposits in Australia (the Bowen and Galilee Basins) and is an ideal recce for Hitachi who has plans to develop more autonomous equipment to the surface mining industry by 2017 (as some of the larger projects in Queensland come on-line).

The second story was a robotics replacement milestone reached in Western Australia. Rio Tinto announced that its driverless trucks had now moved more than 100-million tonnes from its West Angelas, Yandicoogina, and more recently the Nammuldi operations. That’s almost double the amount Rio moved when it featured on the 7.30 Report (21 Feb 2012) stating it had moved 57-million tonnes.

All of this as BIS Shrapnel revised its engineering and construction numbers down from its 2012 report, stating that the nadir will commence from 2014 and not 2015. Mining doesn’t employee big numbers compared to other sectors when in its operations phase, it does however employee big exciting numbers during its infrastructure phase (which is currently still ongoing). Anecdotally, I had a conversation with a colleague who runs a Job Services Australia office who told me that the only ‘tradie’ (Australian slang for construction worker) he has seen since 2008 are those who have lost their license.

1 - Mining_AutomatedMiningTruckSites_Apr2013

Categories

For the third consecutive month Employment was the leading category with 27-stories (32.9%) more on job cutting than employment creation this month. WH&S (Work Health & Safety) followed with 22-stories (26.8%) while IR (Industrial Relations) finished third with 9-stories (11%) after a quiet March.

No stories were recorded for AOD/Crime (Alcohol & Other Drugs) or SkillsShort (Skills Shortages) in April.

2 - Mining_Categories_Apr2013

Positive/Negative Index

With one positive and seven negative stories WH&S, at minus 6 was the most negative indicator for April. The articles included at least four significant injuries and another site-death; this time of a contractor who collapsed at the Wesfarmers owned Curragh Coal Mine.

After six positive stories, L&D/R&D (Learning & Development/Research & Development) finished as the most positive with plus 6, the best monthly positive indicator for the first four months of 2013. The stories included the mining industry detailing its $1.15Bn (AUD) spend on training over the past two years, updates on two new mining training facilities and the donation by the New Gold Peak Mine of a $100,000 dollar underground loader to Western Dubbo TAFE.

On that story, I wonder if I’ll be recording a negative input next year as Western Dubbo TAFE realises no CAPEX spend but several thousand dollars in ongoing maintenance and WH&S implementation costs.

3 - Mining_PosNegIndex_Apr2013

Mining Employment Gains & Losses

Although April saw another good set of employment numbers discussed there was also a loss of both actual and prospective positions headlined by Arafura Resources which pulled out of its proposed Whyalla Rare Earths processing plant. This development may have delivered 1,000 jobs and $1-billion in economic development to the South Australian economy.

On the positive side Rio Tinto Alcan talked up the prospects of building its bauxite mine near Weipa later this year (950 construction workers during infrastructure phase, with 1,346 total employees including contractors forecast for operations) and Gindalbie opening its Karara iron ore project (500 operation jobs).

Technical note: I have updated the February employment numbers, shifting 400 from February to April as NRW Holdings announced the signing of works on the Nummuldi iron ore mine. Overall the project was forecast to employ 1,500 during the infrastructure phase.

4 - Mining_Employment_Apr2013

Here’s a look at the April data.

5 - Mining_Data_Apr2013

Story of the Month

Fortescue Metals Group (FMG) announced this month that it would be replacing its ‘spread-sheet’ system of rostering (and managing labour costs no doubt) with Microster with the implementation to be managed by ComOps.

FMG owes around $12.6-billion dollars (roughly 4.7% of Australia’s Total Commonwealth Government Securities on Issue) and employs more than 2000 employees and is managing its labour by the manual manipulation of ‘Busted Ass Spread Sheets’ (BASS).

Hard to believe, but true.

Final Thoughts

I choose the term ‘robotic replacement’ with the full knowledge that many are uncomfortable with the term. It should be noted that both stories mentioned in the introduction either emphasise safety or integration with employees while avoiding the subject of technological replacement of human workers or even peak mining employment.

It’s a common stratagem of lots of organisations when dealing with problematic issues.

Yet, we are beyond imaging what the mine of the future is as it is already here and being deployed more progressively as each year passes. Western Australian and Queensland deployments this year, no doubt New South Wales or the Northern Territory next.

Australians are just going to have to get used to the gradual transition to the mine of the future. That future is one which is largely operated by robotics and technology by a limited number of highly skilled personnel, potentially from any point on the globe.

 

Note: My previous post on Mining Workforce Planning Scans can be found at Random Analytics: Mining Workforce Planning
Scan (Mar 2013)

Random Analytics: Mining Workforce Planning Scan (Mar 2013)

A Return to Growth

It has become apparent after 15-months of analysis and reporting that each month of mining workforce planning data has a theme. This month the theme is ‘A Return to Growth’ as the sector returned to pre-commodity bust norms in relation to employment. Like the most recent ABS data which showed an increase in Australian employment by 71,400 (the largest increase since July 2000) the Mining Workforce Planning Scan for March received its first positive reading after nine consecutive months in neutral or negative territory.

All of this comes at a time when most of the big-ticket minerals return to sustainable levels of pricing. Noting that the high-commodity price  period ended in late May 2012, iron ore has since returned to sustainable levels (>$110 per metric tonne) from October of last year while thermal coal has nudged past the $100 average in the past month. Less bullish is bullion as it continues its malaise with gold and silver trending down after highs experienced six-months ago.

To emphasise the return to growth the first graph is a positive/negative index looking only at the Employment data. I’ve included a three-point polynomial trend-line which tracks the high price commodity period (pre June 2012), commodity crash period (May 2012 – Feb 2013) and eventual return to growth this month.

6 - Mining_PosNegIndex_Jan2012~Mar2013_EmployOnly

More good news than bad from Employment gave it the highest content count for the second consecutive month while at least three Australian mining work-related deaths put Work Health and Safety (25%) a close second. In another positive sign for mining employment Diversity (9.7%) had several good stories this month which propelled it to third place. Generally, softer workforce planning indicators strengthen as the employment situation improves.

1 - Mining_WFPScan_Mar2013

At +5, Learning & Development was the most positive indicator for March with all five stories this month reflecting Australian research and being of a positive nature. Both Diversity and Employment closely followed with +4.

Reporting of ten Australian significant safety incidents, which included three fatalities and three major injuries against only one positive story propelled Work, Health & Safety to a -9 rating for March. Interestingly Alcohol & Other Drugs/Crime, at -4 was the second most negative indicator as miners featured in four stories including housing explosives at home, increasing use of drugs during downtime and a NSW miner who murdered his girlfriend.

2 - Mining_PosNegIndex_Mar2013

Here is a look at the indicator data for March. Probably worth noting that the Workforce Planning content has increased percentile wise month-on-month since January (25.1%, 34.4% and now 38.5%) but still remains on the low side compared to 2012 (averaging 44.8%).

Additionally any thought that the FIFO enquiry findings which saw the FIFO/DIDO indicator crash to a record -4 negative sentiment last month continuing into March were dashed as the topic was hardly raised during the month.

Goes to show you how much notice everyone (outside of Canberra) takes of Senate and Standing Committee reports.

3 - Mining_Data_Mar2013

March saw another set of good employment numbers reported with 2044-jobs added this year and the Shenhua Watermark Coal Project looking likely to construct another Western NSW mine in 2014. There is still cost cutting going on especially as coal continues to trim fat, reflected by the -317 jobs reported lost in March.

Notably Xstrata announced the closure of its Brisbane coal office (although the location is still visible on its web-site as at 29 March). This has to be seen as both a display of its lack of long-term confidence in its coal assets and potentially the pro-mining Queensland government which has been struggling with higher than average unemployment levels since it came to office in March 2012.

4 - Mining_Employment_Mar2013

The mining centric states of Queensland and Western Australia again dominated with 16-stories (22.2%) each. New South Wales had 10-stories (13.9%), then the Northern Territory and South Australia had one apiece 1.4%. On a national level there were 21 Australian stories (29.2%), two for China (coal-disasters), and one each for Indonesia, Namibia and New Zealand.

5 - Mining_WFPStoriesByState_Mar2013

On a humorous note the story of the month was a Recruit/Retain tale from Indonesia when coal miner Pt. Karya Bumi Baratama advertised for a receptionist asking specifically for “good looking” single females under 25 to apply. Having married into an family with an Indonesia background I have some empathy and can envisage the writing style in Indonesia. If we are honest with ourselves I can’t see much difference when companies request ‘well-presented’. Lucu banyaklah (Very funny indeed)!

To sum up, all the indicators now show that the mining sector has returned to its pre-June 2012 growth phase. Employment numbers look good this year and outside of a disaster in China or a collapsed US economy I can only surmise that these numbers will remain static for the rest of the year.

On that, it would be worthwhile keeping an eye on indicators like Industrial Relations, Migrate/Visa and Remuneration in coming months. A pick up in content and how it plays in terms of positive or negative sentiment will potentially highlight another sector increased wages demand cycle, a situation that the industry is continuing to downplay, even as some commodities return to reasonable margins.