March 6, 2012 / 5:08 PM / 6 years ago

Miners tweak training, bonuses amid labor shortage

TORONTO (Reuters) - Anita Bertisen’s family and friends thought she was crazy when she enrolled in a mining engineering program in 1998, when the notoriously volatile industry was struggling worldwide.

As it turned out, Bertisen was just ahead of her time. A senior engineer at California-based consulting firm Tetra Tech Inc (TTEK.O), she now deflects weekly pitches from headhunters.

It’s part of a broader trend, as a tight labor supply holds back growth across the mining sector, with shortages of skilled labor from senior engineers to welders.

Firms are looking for creative ways to fill the gap, from more intensive and accelerated training to new bonus structures, and the subject is a hot topic at the Prospectors and Developers Association of Canada conference in Toronto.

The mood at the conference is cautiously optimistic, and many businesses are expanding - Bertisen’s office in Golden, Colorado, more than doubled its work force in the last 18 months. But firms need more workers, and a handle on labor costs, to keep growing.

In the next decade Canada’s mining sector will need more than 100,000 mostly skilled new hires to sustain even modest growth, the Mining Industry Human Resources Council, a non-profit funded by the federal government and the mining industry, said in September.

It estimated that 201,000 people worked in the sector in 2011, many of whom are close to retirement age. Similar trends are seen around the world.

Tetra Tech’s approach is to hire 25-year-olds - or “kids,” as some veterans call them - and train them.

“Right now I’m an old-timer in my company. That’s how many new people we have,” said Bertisen, who joined in 2010, when she was 30. Ideally, consulting firms would hire experienced staff, she said, but that’s not possible right now.

Jeff Wilson, the company’s director of geology, sees training and higher pay as one way of filling in for a missing generation of engineers and geologists.

“Most folks in the industry are (Bertisen’s) age or below, and then 50 or above. There’s very little in between,” he said. “You’ve had a series of booms and busts, and in each of the busts we’ve let the kids go.”

That is why the sector will be hit particularly hard as baby boomers retire.

Now when Wilson hires a junior geologist, the company shells out some $10,000 in the first year for things like software training. Bertisen’s side of the business has had to develop mentorship and training programs for the first time.

“The internal bottleneck is people, definitely,” said Daniel Simoncini, chief executive of Foraco International (FAR.TO), a Canadian-based drilling company. “Everybody is developing his own solutions.”

Those initiatives are starting to pay off, Simoncini said. Foraco now trains drill operators in as little as 18 months, rather than two and a half years, as in the past.

“We screen very carefully upfront,” he said. “Then we send them on the rigs as a third man. It’s an extra cost for us, but at least the guy gets full exposure.”

Foraco is also pushing its customers - mostly major mining companies - to sign longer contracts so it can put more operators on salary, rather than hiring freelancers, as they now do in North America.

Diversified miner Thompson Creek Metals TCM.TO has managed to avoid delays associated with labor shortages, but Chief Executive Kevin Loughrey said it has paid in high turnover and somewhat lower productivity than he would like.

“We try to make our workplace attractive and enter into deals that sometimes will have performance bonuses for people who do well, to try to get them to stay,” he said.

Indeed, wages are rising. In December, average weekly earnings in mining, quarrying and oil and gas extraction rose 8.5 percent year-over-year, according to Statistics Canada.

For its part, Cabo Drilling Corp (CBE.V) awards slightly higher bonuses than its competitors, but keeps half the money until the end of the year. The idea is to hold on to operators through the summer, when rivals are most likely to poach.

Australia’s AMC Consultants cannot compete with bigger outfits on salary, so the firm tries to offer a higher quality of life - allowing employees to work from home, for example.

John Smith, chief executive of Silver Standard Resources Inc SSO.TO, agrees that retention is about more than money.

“Nothing keeps people like excitement,” he said. “Yes, you have to pay people a fair day’s wages, but what I think keeps people is a sense of excitement, and the feeling that what they are doing is making a difference.”

Additional reporting by Julie Gordon and Euan Rocha; Editing by Frank McGurty and Janet Guttsman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below