Long-term Sustainability through Enhanced Labour Market Intelligence and Counter-Cyclical Workforce Planning


In mining, workforce planning has traditionally taken an operational perspective-maximizing production and minimizing costs – rather than a strategic human resources management perspective of developing workforce capability and capacity for the future. Rapid economic change is an industry reality and employers have seemingly little choice but to respond to immediate pressures with direct impacts on employment. This approach, however, threatens to erode the long-term sustainability and competitiveness of the sector. Reliable labour market intelligence and a counter-cyclical workforce planning strategy will soften the impact that the economic cycle has on industry employment and ensure that the industry can meet future labour needs.

Employment Volatility

Employment in the mining sector is significantly more volatile than in other industries in Canada. Recent research carried out by The Mining Industry Human Resources Council (MiHR) demonstrates a strong correlation between employment patterns in mining and international commodity prices; fluctuations in employment are linked to fluctuations in the commodity price index.

When commodity prices are high, the industry responds with ambitious production and expansion activities. Employers expand their workforces and the competition for talent heats up. But when commodity prices are low, there are widespread industry contractions, dramatic cut-backs in spending and cancellations or delays of expansion activities. Employers respond with workforce reductions and the labour market quickly softens.

This employment volatility threatens the long-term sustainability of the Canadian mining industry and has implications for all industry stakeholders. Employers find it difficult to make long-term plans and often focus on immediate needs driven by the financial feasibility of production activities. This presents challenges when employers are looking ahead to develop workforce capability and capacity for the future.

At the same time, educational institutions are impacted by sudden changes in the industry with shifting program enrolments and varying levels of support from the industry for vital infrastructure, materials and financial aid for students. Students get discouraged from participation in the industry when faced with a sudden lack of scholarships or employment opportunities in economic downturns. Under-represented groups, such as new Canadians and women, often prefer to work in industries in which employment is more stable. In addition, the mining industry is one of the largest employers of Aboriginal peoples in Canada and employment volatility has a particularly adverse affect on their communities.

Workforce Planning

In the fall of 2008, the industry went from a strong and relatively long boom cycle to a downturn and is now well on its way to recovery. During the downturn, industry HR professionals swiftly shifted from intensive recruiting and retention campaigns to cutbacks, cost savings and workforce reductions. For many employers these actions were necessary, despite their knowing that significant labour shortages continue to threaten the industry’s viability and competitiveness.

MiHR’s labour market forecasts indicate that even in an optimistic outlook, the industry will face significant labour shortages and tens of thousands of workers will be needed simply to replace those who are retiring. An industry-wide shift to strategic, proactive, long-term workforce planning will ensure that the industry is positioned to address future labour shortages, regardless of the current phase of the economic cycle.

A recent series of consultations revealed that stakeholders are aware that workforce planning in the industry is generally reactive. In the fall of 2009 and early 2010, MiHR held a series of HR forums across Canada. Stakeholders participated in facilitated discussions about long-term workforce planning and counter-cyclical HR management strategies. The message was clear: industry stakeholders identified employment volatility as a primary concern and expressed a need for timely, reliable, and relevant labour market information and resources to help with strategic workforce planning. Furthermore, they expressed deep concerns that decisions and actions taken in the recent downturn have compounded existing labour issues and threaten to undo the hard work the industry has done over the past decade to attract and build the future workforce. In response, MiHR is engaged in two key initiatives: the Mining Industry Workforce Information Network (MIWIN) and the development of an industry-wide counter-cyclical workforce planning strategy.

Workforce Information Network

MiHR is dedicated to supplying the sector with reliable and timely labour market information. To this end, a labour market forecasting model, called MIWIN, has been developed by MiHR through extensive consultation with stakeholders and labour market thought leaders. It is a dynamic system that allows industry stakeholders to monitor future hiring requirements by occupation, on both a national and a provincial level. Forecasts help stakeholders understand the occupational structure of the mining workforce and plan for future hiring requirements. To date, MIWIN has produced labour market forecasts for British Columbia, Saskatchewan and Ontario in partnership with relevant provincial organizations and Workforegovernments.

The MIWIN system will be enhanced and expanded over the next few months. Research is underway to better understand both labour supply and demand in the sector. From this research, the MIWIN system will be expanded to consider new variables that impact the mining labour market (e.g., worker mobility, compensation, commercial developments, environmental and sustainability regulations, etc.). The forecasting model will be improved to reflect the commodity mix of each region and expanded to incorporate new labour supply variables. A national labour market report will be produced and distributed later this year. This forecast will predict hiring requirements over the next decade, by province, occupation and other criteria, for optimistic, neutral and pessimistic scenarios. In addition, a web portal is in development that will allow stakeholders to select certain parameters and receive customized forecasts of hiring requirements.

Towards Counter-Cyclical Workforce Planning

In tandem with MIWIN developments, MiHR is gaining a better understanding of counter-cyclical workforce planning in the mining sector.  The Council is planning to research historic patterns of employer behaviours in downturn, recovery and boom phases of the economic cycles across geographic regions, commodity, type of mining, and phase of the mining cycle. This in-depth analysis of employer behaviours will serve as a foundation for understanding the realities of workforce planning in the sector. These strategies will then be dissected and compared with those from other industry sectors and from the international mining community. Proactive, long-term strategies that reduce employment volatility will be identified and MiHR will work closely with stakeholders to establish an industry-wide long-term workforce planning strategy.

Through these initiatives, the industry will gain a more sophisticated labour market intelligence system that collects, validates and analyzes labour market information to produce relevant and timely labour market forecasts. In addition an industry-wide, cooperative approach to workforce planning will ensure that mining employers have the workforce they need to establish the long-term sustainability and success of Canadian mining.

* Martha Roberts is the Manager of Research, Sector Studies at the MiHR

Links and References

Commodity Prices: Interactive Charts

Countercyclical Hiring: The Greatest Recruiting Opportunity in the Last 25 Years
Guide to the Downturn – Harvard Business Review

MiHR Sudbury Case Study Focus: Education/Training and Relationship with Mining Industry

Overcoming HR Challenges in The Canadian Mining Industry

The Mining Industry Human Resources Council
The Mining Industry Workforce Information Network

Workforce Planning Initiatives Australia

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