Staff shortages, automation and other trends in the mining sector
An issue that is causing massive delays and problems across multiple industries around the world is labour shortages. With most sectors experiencing difficulties in sourcing talent for roles, the Australian mining industry has been floundering to fill tens of thousands of available vacancies. With the current state of Australia's staff shortage, many are questioning how the situation has become so extreme, and more importantly, what needs to happen to resolve the lack of applicants.
Australia has been one of the worst hit countries amidst labour shortages. There are limited workers for all trades from train drivers to apprentices, which has slowed down production times in multiple industries amidst the post-COVID economic boom of 2022.
Since the beginning of the pandemic, the Australian mining industry has poached as much talent as possible from any sectors it could. Within just 2 years, 66,000 workers have been added to the industry, representing an incredible workforce growth rate of nearly 30%. While this positively impacted the industry, there are still many roles left to fill.
Western Australia alone is experiencing a shortage of more than 10,000 workers, largely due to heavy COVID-19 border restrictions that kept skilled workers from entering the state. This led workers to seeking out roles in other, more accessible parts of Australia. Currently, there are more jobs to be filled in WA than there are unemployed Western Australians.
It is predicted that by 2027, the Australian mining industry will need to find up to 24,000 new workers to resource major projects that are already in the pipeline. Some 69 projects due for completion by 2024 will require 15,000 new workers, which is a staggering stretch during an economy experiencing the lowest unemployment rate in 48 years.
Biggest contributors to current labour shortage
Lack of workers
Regardless of Australia experiencing an underutilisation rate (a combination of the underemployment and unemployment rate) at a 40-year low, there has been no celebration of job creation in the economy. This success has been overshadowed by the lack of available workers to fill the new jobs.
COVID-induced closures were the biggest contributing factor of Australia’s lack of growth, which typically relies on migration for two-thirds of its population growth. There are more and more downsides for Australian relocation, including foreign residents expecting to pay a minimum tax rate of 32.5%. While they are not required to pay the medicare levy, they do have to pay for their private health insurance. This lack of growth has only been further affected by Australia’s inflexible migration issues which has left migrants reconsidering Australian relocation, and leaving large gaps in the workforce.
Regional and coastal areas are in the midst of shortages in general and affordable housing. For many domestic and foreign workers, accessible housing has become a crucial aspect in choosing a job. For example, Mount Isa in Queensland has a local vacancy rate of around 1.1%, meaning in every 100 rental properties, only one premises is available. The lack of rental properties is concerning many areas of Australia, such as Kalgoorlie, where vacancy rates sit at 0.4% and Moranbah at 1.23%, with basic accommodation costing renters inflated prices.
In July, federal, state and territory ministers met to discuss options to tackle the housing affordability crisis, with the Albanese government aiming to provide $10 billion in funding to build 30,000 social and affordable properties over five years.
A greener generation
Attracting a young workforce that an industry can rely on for years to come, is a primary goal for all sectors. However, the mining industry is struggling to attract the next generation of workers, specifically Gen Z, who are regarded as the most environmentally and climate-conscious generation. The allure of high salaries for entry level jobs has failed to sway the ethical discourse of Australia’s youngest generation. This leaves companies scrambling to promote their jobs while communicating the vast changes being made within the industry to create sustainability in the sector.
Tools to overcome worker shortage
Rebranding the industry
With all of the conversation surrounding the environmental viability of the mining industry, the sector desperately needs to rebrand to attract environmentally-conscious talent. To achieve this, companies continue to improve on their sustainability goals and invite independent parties to assess their ESG practices and report on their progress. Furthermore, actively demonstrating a regard for the environment and climate through the implementation of renewable energy initiatives, electrification of mining machinery and reclamation of retired mine sites would go a long way in reversing the negative stigma currently clouding the sector.
Mining businesses must start investing into education and working closely with providers, governments and unions. Approaching students in their final years of schooling, focusing on STEM education and supporting creative solutions will significantly sway the next generation towards choosing a career in mining.
International skilled workers can significantly help relieve the mining industries labour shortage. After two years of border closures, Australia stopped the flow of new foreign workers from entering the country. As borders are now open, a new issue is impeding the flow of new workers - visa applications. Currently it is taking up to 18 months for foreign affairs to process visa applications for vital workers who will assist the growth of the sector and consequently become tax paying residents, valuable to the overall growth of the Australian economy. The slow processing, combined with the uncertainty and arduous undertaking for permanent residency is causing candidates to look elsewhere.
If this recent labour shortage will teach miners anything, it will be to become less reliant on humans and invested in processes wherein automation can be implemented. This focus will not only reduce overhead costs but also allow miners to better forecast future projects where labour risks can be mitigated. Incorporating automation does have its pros and cons, however it will become a necessity in integrating and scaling the mining industry.
Remote working has become hugely popular since the start of the pandemic, with many employees opting to work from home permanently. A recent WEF Future Jobs study found 95% of surveyed mining companies are adopting processes that create more remote working opportunities in order to cater to a wider audience of potential employees. By eliminating the need for onsite work in isolated mining areas, companies have a better chance of attracting talent that would prefer to work from the comfort of home.
The current labour shortage crisis is a good problem to have as it shows that economies are quickly rebounding from COVID. While, leveraging ideal conditions is always part of the agenda for mining companies, maximising production and profits as soon as possible is key in keeping the industry progressing. Therefore, it will be up to these companies to innovate and adapt to the crisis, luring workers to an industry that has considerable growth ahead of it.