Strong demand for engineers continues

Western Australia’s resources boom shows no sign of abating in 2008, according to the latest Hays Resources & Mining report (April 2008) on salaries and employment in the industry.

Western Australia’s resources boom shows no sign of abating in 2008, according to the latest Hays Resources & Mining Report (April 2008) on salaries and employment in the industry.

Despite uncertainty in the financial sectors, commodity prices remain at or near record levels with mining and oil and gas companies remaining resolute in their expansion of existing and development of new production facilities.

Iron ore development leads the way with a wealth of brownfield expansion and greenfield development projects underway across the Pilbara and Midwest regions of the state.

With investment in exploration up over 35% on 05-06, the market is showing sustained growth across all commodities, with the knock-on effect of buoying the state’s huge engineering and construction sectors.

In South Australia the key positions and opportunities for the next quarter will be in exploration; a 30% month-to-month increase on spending in the exploration of various tenements in South Australia is creating a huge job market for exploration and project geologists in the state.

Mine development and planning engineers are also in high demand in South Australia with a major project commencing and smaller projects beginning to enter the production phase.

A few of the smaller mines are also going into commissioning and production stage. This ensures process engineers and project metallurgists are in high demand.

Mine engineers are also needed due to the number of mines entering production and development phase.

From direct mine owners to engineering consultancies, most companies have extremely positive hiring intentions for both permanent and temporary staff over the coming quarter, despite the market still being weighed down by a shortage of skilled candidates.

Executive recruitment

The climate is very positive for executive roles and will certainly only increase over the quarter.

South Australia is also beginning to see activity at this level.

The infancy of the state’s market saw many larger EPCM and mining houses running their operations from interstate, however executive positions are now beginning to filter into the local market as a few large brands open operations with executive teams based in Adelaide.

Unsurprisingly, Western Australia’s buoyant resources sector is creating a huge volume of opportunities at the executive and general management level.

Despite the poor market trends of January and February, the majority of junior explorers remain undeterred in pushing forward with proposed developments, floating spin-off companies to enable them to focus on their key strategic goals.

These spin-off companies are creating new and exciting opportunities for ambitious up and coming executives to gain experience in the commercial aspects of IPO’s and capital raising.

Coinciding with this is increased movement in the merger and acquisition market. This activity is not only the domain of the larger companies that dominate the news, as more juniors and mid-tiers have developed strategic growth plans related to acquisitions of either fellow explorers, miners, or simply assets.

Although the news has been focused on a number of hostile takeovers in recent weeks, not all mergers are subject to such resistance.

Many mergers have been agreed openly by both parties, who perceive a major benefit in terms of asset and personnel, and such activity only augments the need for a stronger management team.

Those executives retrenched on acquisition, or who prefer to move as a result of acquisition, are quickly recruited by other employers.

With so many more companies evolving, and the current gap in the management skill set, there is a constant search for the right executive candidate.

Despite such activity in the market, salaries at the top end are still very much dependent on the company and their need to find exactly the right person.

As a result of market volatility, taking someone on who does not quite fit the bill is no longer an option.

Many of the smaller entities find themselves in a position where they have no choice but to offer top salaries along with options in the company.

There is certainly an increasing trend of executives wanting to have a share of the success of the company – especially when there is an opportunity to take an intrinsic role in its development.

Larger companies are able to trade on their name and their projects, but even this is not always enough.

Unlike the steadying of salaries for other levels, where improved benefits and conditions of work have become the focus, executive level positions are still attracting a premium in terms of direct and incentive-based remuneration and this trend looks set to continue.

Salaries

Despite the market’s strength, the rapid rise in salaries seen across all areas of the mining, engineering, and construction markets over recent years has now reached a plateau.

Most companies have focused on retention strategies through improved benefits and conditions of work.

The trend of shorter FIFO rosters has continued, with many companies now offering 9/5, 8/6 and even-time rosters, with some construction rosters dropping as low as two weeks on and one week off.

Some engineering companies have started to introduce nine-day working fortnights or half-day Fridays with a greater emphasis on flexibility of hours worked.

With no less than five LNG projects at various stages of development in Western Australia, a major increase in exploration drilling and five FPSO’s recently arrived or en route to the state, the oil and gas sector is experiencing its highest peak in activity in many years. This activity has had a positive effect on salaries across the board.

The strengthening of the Australian dollar over the last financial year has seen a levelling of salaries between Australia and other international oil and gas hotspots.

Candidate trends

Candidates are generally shopping around looking for work/life balance and roles with shorter rosters and greater R&R time.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.