Darnbrough: How has the market changed for your sector of the industry in the last six months?
Walsh: There is still a major candidate shortage across the white collar engineering market with well skilled professionals being snapped up very quickly.
There are more mining professionals becoming available on the market as projects are being put on hold and staff redundancies are starting to occur.
Since the Global credit crunch I have seen a number of companies struggling to get finance for planned or current projects and as a result are retrenching or redirecting staff resources. This is helping with the skills shortage but only slightly. High level and Senior Engineers as well as various science based professionals are still in high demand.
At the start of the year there was more of a focus on exploration, this area has been hit very hard as companies are now focusing on current projects and resources.
Darnbrough:What are the major trends and variations in the market that you would expect to see over the next 18 months, and in the longer term (five years)?
Walsh: It has been well reported that the mining and resources industry is in a rapid rate of slow down and a number of large and well known organisations are slashing jobs by the hundreds. In the immediate future this trend will continue for companies that are heavily reliant on external or third party funding as they will struggle getting finance for projects.
The long term outlook is hard to predict as it depends on how the government is going to handle the current economic issues. If the government comes to the party with a well thought out strategy to keep the resources industries turning over, then I imagine that a lot of the projects that have been put on hold will be restated.
Darnbrough:What are the key risks for businesses in your sector moving into this period of slowing economic activity?
Walsh: The key risks for businesses around their recruitment will be if they have a knee-jerk reaction to the downturn and indiscriminately reduce staff numbers. As it is very hard to predict how long this down turn will last, businesses need to be reminded that we are still in a skill short market and workers who are ‘let go’ will find work elsewhere.
This will cause a major issue when the market turns around as they will need to recruit these workers again. They will be caught in a position where they will have added costs to entice these staff back, (if they can get them back!) not to mention the lost production and the advantage that their competitors will have over them should they have a full compliment of staff ready for the increase work load.
Darnbrough: What actions would you expect from companies in this market as they move to mitigate potential risks to their businesses?
Walsh: Most companies will look to reduce overheads to limit their spending and increase their profitability (or decrease their loss). Sectors of the business that are non essential such as Marketing and Recruitment will unfortunately suffer the most. This means that only critical or essential positions will be recruited for.
Companies will be holding onto their experienced and productive staff whilst graduate recruitment and traineeships will be kept to a minimum.
Employers will also have to be more realistic about the salary packages on offer as they won’t be able to sustain the generous remuneration that has been offered in the past to encourage workers to remote areas.
Darnbrough: Are there opportunities in an economic climate such as this, and if so, what are they?
Walsh: The main opportunities will be for high level skilled White Collar professionals. Even with the downturn we are still experiencing major skill shortages in these environments.
This downturn will also sort out many companies and professionals who have merely been successful just because of the resources boom.
By this I mean that companies (or individuals to some extents) who have a good reputation, defined standards and clearly thought out strategy and plan should be able to maintain their workload and survive the downturn whilst ‘cowboy types’ will fall to the wayside.
Darnbrough: What advice would you have for mining and minerals processing professionals, as well as suppliers and distributors in this sector, as we move in to 2009?
Walsh: Mining and minerals professionals who fear that they may be in a position where their job is threatened need to have an open and honest conversation with their employer about their future job security.
If they feel that they may be made redundant it is important to align yourselves with a good recruitment firm to get the ball rolling early as possible because there will be a lot more competition for vacancies. Professionals will also need to be flexible on salary packages and conditions as they will find that employers will not be in a position or willing to offer the generous salary packages that they have been in the past.
Suppliers and distributors need to focus on the areas of their business that produce or lead to revenue such as sales or bid management/tendering to ensure that their employees are adequately trained and prepared for a slower market. Areas to focus on are business development skills and sales strategy.
It is also important to consider that there will be pressure to decrease margins as competitors will start to reduce theirs to win business. Ensure that you have a clearly defined policy or strategy so that your business and staff are always offering exemplary customer and value added services to maintain and build on existing client relationships. Just remember that people buy from people. What is your differentiator or unique selling point?
Darnbrough: What key messages would you have for the mining audience on the economic times ahead?
Even in a downturn it is still important for companies to focus on being ‘employers of choice’. We are still experiencing a major high level talent shortage and in this market attraction and retention of these key members of staff is paramount.
There are still a lot of companies out there with private funding who are cashed up and looking to grow whilst their competitors are struggling in the current market climate. Being an ‘employer of choice’ will ensure that your company profile and reputation in the market remain for when the market picks up.
Downturns are the best time to regather and take stock of where companies are at in relation to set targets and goals. Focus on what you can do currently to build the company brand!
For employees whether they be blue or white collar, if you find yourself out of work, remember that Australia is still going through a national skill shortage with a lot of industries still struggling to find the appropriate talent. If you can’t find work in mining, consider moving to another industry!
If you choose to stay in the mining and resources industries, be prepared to be flexible on salary packages and conditions of employment as there will now be a lot more competition for the available positions. Companies won’t have to pay such generous salaries to attract workers.