1. ShiftMinerMagazine www.shiftminer.com
22nd July 2013 3
For the sins of our fathers
THE aggressive cutbacks underway in
Queensland’s coal sector signal companies
have no choice but to cut costs to survive
the current market.
“The state of their business has
determined there have to be cost reductions,
there’s no choice now,” Confiance director
Peter Cross told Shift Miner.
“But most companies are reaching
for the low hanging fruit and hitting the
suppliers and the contractors.”
Mr Cross said the downturn was a time
when companies should be looking to
address the sins of the past.
“In the boom, which company didn’t pay
massively inflated salaries to lure people
into those hard-to-fill rolls?” he asks.
“Which company didn’t turn a blind eye
to poor performance just because the poor
performer couldn’t be easily replaced? Who
didn’t put people into leadership roles who
were barely competent?”
Mr Cross said the outcome of a recent
Confiance survey confirmed that many
companies were hamstrung by management
teams appointed during the skills crisis who
weren’t sufficiently experienced. They were
set up to fail – put in bigger jobs than they
were capable of doing. He said now there
was the opportunity to rectify the problem
and move leaders into roles which better
suited their experience levels.
“The skills crisis is well and truly over and
there are lots of highly experienced quality
people on the job market. They should be
identified and brought on board at the right
level within the organisation. We have time
now to do some upskilling so we are not
caught unawares in the next upturn.”
At the height of the boom, mining pay rates
went through the roof as companies competed
for the same small pool of skilled workers.
Not surprisingly, many companies
would now like to reel in remuneration, but
Mr Cross said it must start at the top.
“Salary reductions have to start at the
highest levels of management,” said Mr Cross.
“It’s not just about cutting out costs of
contractors and suppliers. Senior leaders
need to lead the way on this.”
Some companies have already started
down this hard road, with the axe falling
on the wages of company managers and
directors.
Nickel miner Panoramic Resources has
cut the pay of its top executives and board
members by 10 per cent.
“Like a lot of businesses, we got a bit fat,
dumb and happy,” Panoramic’s managing
director Peter Harold told the Australian.
“You can’t ask suppliers to make cuts
if you, at the top level, aren’t willing take
some pain yourself.”
BHP Billiton’s new chief executive
Andrew Mackenzie is on a base salary
about 25 per cent below his predecessor
Marius Kloppers, and with a more
restrictive bonus package to boot.
Despite the change in conditions, Mr
Cross said companies should always have
their eye on long term retention.
“There are ways to do this [attraction and
retention],” he said. “You’ve got to have the
workforce aligned and understanding your
business model. The workforce has to be
prepared to make some sacrifices. They have
to be a part of the change.”
He said strong and capable leadership
was crucial.
“The workforce should understand the
business imperatives, which will help them
understand the need for cost reduction.
Encourage them to contribute ideas to
the cost reduction programs. It’s about
transparency and leadership.”
Mr Cross said how a business managed
a downturn would determine its reputation
into the future.
“During times like this it’s all about how
you treat your workforce (and your service
providers). People have long memories.
Your company’s reputation will be there
longer than the managers who are running
the place today.”
Mr Cross gave the example of a client
who took the gutsy decision during the GFC
not to retrench any operators at its open cut
mine. Instead, a massive retraining program
was launched to upskill workers on other
equipment and new technologies.
When the boom swung around in 2010-
11 its labour turnover was a quarter of the
industry average.
“Their brave and costly choice to retrain
and upskill their workforce paid off with
loyal and steadfast workers, happy to stick
around for the long haul,” said Mr Cross.
“This is not the first downturn the
industry has had and it won’t be the last.
The most successful companies will be
prepared when the good times return.”
PUSHING for increased productivity during
a time of job insecurity may just achieve the
opposite, accordingtoanindustrypsychologist.
Naomi Armitage, director of Gryphon
Psychology, specialises in psychology
services for the mining industry and said
the uncertain environment is having a big
impact on workforce engagement.
“What we’re getting is a lot of queries
about at the moment is from management
saying their workforce seems to be really
disengaged,” she told Shift Miner.
“But disengagement is a product of
an uncertain environment. If you are
uncertain over a long period of time, then
you don’t put a lot of effort into what you
do. In an uncertain environment, you are
even more stressed, so you become more
disengaged, and when you’re disengaged
you tend to withdraw.”
The question for leaders is how to build
that engagement back into the workforce,
and Ms Armitage will be presenting at the
MAIN Bowen Basin Safety Conference on
Thursday, July 25.
Ms Armitage said it comes down to what
sort of leaders you have. There are two types.
“The first type is the authoritarian
leader. When they get stressed, they tend to
become even more authoritarian.
“They are the ones who will say: ‘You
lazy so and so, get working, do this etc’.
People will comply, but as soon as you
walk away, they will put down their tools
and they won’t perform,” she said.
The second type of leader - and the
one that is far more effective - is the
cooperative leader.
“This leader works with their workforce
and communicates. They will say to their
workforce that they are in this situation
together, so how can we manage it? These
people ask for feedback, are more involved
and they take more responsibility.”
There are more of the authoritarian
leaders in the industry, and the more
stressed they get, the more they tell their
workforce to knuckle down.
“It makes the situation worse,” Ms
Armitage said.
It is about modelling behaviour, she said.
If you are a leader who will take a cut in pay
or will take on extra tasks yourself, your
workforce will be more willing to do the same.
“This is no different to how you manage
your kids. If you wear your seatbelt, your
kids will wear their seatbelts. I talk about
parenting a lot.”
Engaging your workforce is also linking
issues and policies to what people value.
“Know what your workforce wants. If it
is productivity, we know that people value
job security, so it will be talking about how
cutting costs here etc will make your job safer.
“It’s about getting leaders to understand that.”
Most companies are already taking this
approach when it comes to safety. If you have
a rule, it’s about going back to your workforce
and asking them why the rule is there.
“It’s linking it to a personal value. For
example, if you don’t follow a certain
process and you lose your arm, how would
that affect your life?
“We forget about that.”
To register for the MAIN safety
conference, go to www.main.org.au.
News
Disengaged workforce kills productivity
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