Random Analytica

Charts, Infographics & Analysis without the spin

Category: Workforce Planning

Random Analytics: Mining Workforce Planning Scan (Feb 2013)

In January I raised the prospect that mining had returned to Business-As-Usual (BAU), although its return heralded a much more ‘leaner and meaner’ approach. With the second month of data for 2013 completed, the trend around employment which commenced in November has continued, confirming that we had commenced a new normal. What is more interesting is that current producers are emphasising cost cutting, while future projects or producers are trying to complete works as fast as possible. Thus the slight negativity we are seeing in employment sentiment is not reflected in the employment gains, even when like this month the employment losses recorded neared 2000.

An obvious example of this was the Rio announcement of the $3.1-billion dollar Pilbara expansion program that will employ 1,500 this year in the infrastructure phase and another 700 ongoing positions when it moves into its operations phase. 2,200 new positions sounded great but it’s a shadow of its 2012 program which had started to recruit for 6,000 expected roles but was quietly axed without explanation. In the same month Rio announced 350 positions would be going at the Argyle diamond mine, mainly from its contracting staff. There are no mixed messages here, Rio is repositioning out of Africa expanding only where it can be assured of good margins, while any of its assets that are marginal (I’ve been aware of Argyle being marginal for about a decade) are being cut or cutback.

While the producers continue to increase production while driving down costs, those that are not producing or have assets that are not in play are looking to get them completed ASAP. In this case though, it’s the lack of stories that I find interesting.

So, in terms of employment I’ll be interested in following updates (or lack thereof) from small to medium operators who are not producing at the moment, anything in Queensland that is not producing and as an aside, the highly leveraged FMG assets which are still in an expansion phase. Given all the cuts to mining staff across Australia I will also be following stories about mining contractors, given the amount of movement in the market currently. Contractors squeezed profits due to a retraction from these services has me guessing that we might see some go to the wall over the next quarter or two. Like a game of musical chairs, those who don’t have a chair when the music stops will be out of business permanently!

The last item of note for February was the publishing of the FIFO ‘Cancer of the bush or salvation for our cities’ Report by the Standing Committee on Regional Australia, chaired by the Independent Member for New England, Tony Windsor. As the name suggests, the Committee were not big fans, making 21 recommendations to government and 14 to industry to improve the practice. Although I cannot say that this report is as even handed as it should have been (there are both issues and opportunities presented by FIFO/DIDO practice) it does reflect some negativity in the reporting that I’ve been able to capture over the past 14-months of data (see Figure 3).

Now, let’s look at the data. The three dominant mining Workforce Planning stories for January were Employment (22.9%) closely followed by WH&S (19.3%) and IR (14.5%).

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Figure 1: Australian Mining Workforce Planning Scan (Jan – Feb 2013). Source: Australian Mining. Some stories have been verified against primary resources.

Diversity and Engagement both received a (+2) positive reading while IR received a (-6), WH&S (-5) followed by Employment and FIFO/DIDO both received a (-4) negative sentiment.

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Figure 2: Australian Mining Workforce Planning Positive/Negative Index (Jan – Feb 2013). Source: Australia Mining.

The Employ category which tracks employment gains, losses and general sentiment was the leading Workforce Planning indicator for February but only just at 19-stories (22.9% +1.6%mom/+4.5%yoy). There was a 4210-jobs gain but a spike in jobs lost which sat at 1,994 which goes some way to explain a slightly higher negative sentiment (-4 or -1mom). As previously mentioned, Rio’s revised announcement of 2,200 new positions was the best employment gain for the month but a newly approved Venture Minerals proposal in an opened Tarkine could provide up to 1,000 positions in the depressed Tasmanian economy. UGL announced 1,000 positions will go globally with 700 to be cut from its Australian operations alone, while Bradken, a mining and rail manufacturer posted a $46.7-million half-yearly profit (up from $43-million the previous year) after cutting its staff by 500.

WH&S which tracks Work, Health and Safety incidents and initiatives came in as the second leading indicator for February with 16-stories (19.3%, -19%mom/-8.3%yoy). Only one Australian was reported injured when after a Mount Isa underground incident required an aero evacuation. Near misses and complaints of conditions ensured WH&S finished the month with a (-5) negative sentiment. One story that is worth reading and highlights the dangers of the sector is of the 4th mining related death in just a fortnight in West Virginia. (For the record, injuries or deaths that occur outside of Australia do not count toward the positive/negative index).

IR or Industrial Relations was the third leading indicator for February at 12-stories (14.5%, +8.1%mom/steady from 2012). Ongoing industrial disputes with Pacific National Coal, lockouts at BHP and a walkout at Hanson Quarry gave IR a (-6), the most negative index reading for February.

Diversity which looks at female, indigenous and disabled participation (although other subject groups would not be ruled out) finished the month with 2-stories (2.4%, -1.9%mom/+0.2%yoy). Both stories looked at the sectors female participation this month. The need for mining to increase its female participation from the current 15% to the 25% by 2020 is my pick for the month.

FIFO/DIDO (or Fly-In Fly-Out/Drive-In Drive-Out) is a mining specific engagement indicator. As previously mentioned FIFO/DIDO with just five stories for February had a negative reading of (-4). Looking at 14-months of data, this negative sentiment has only been reached once before, in June 2012 when the sector was still (for all intents and purposes) booming and the FIFO enquiry was in full swing. Generally the indicator has been negative, averaging 1.5 over the past 14-months although the stories softened from September through to November, which corresponds to last year’s commodity crisis.

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Figure 3: Australian Mining Workforce Planning FIFO/DIDO Positive/Negative Index (Jan 2012 – Feb 2013). Source: Australia Mining.

Here is a closer look at the February data.

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Table 1: Data for Australian Mining Workforce Planning Scan (Feb 2013). Source: Australian Mining.

Finally, here is a look at the Mining Employment Gains/Losses tracker for 2013.

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Table 2: Mining employment gains and losses for 2013. Source: Australian Mining.

Update 1 (5/03/2013): The Commonwealth Bank released an economics update on the 25th February which I only had a chance to read today (many thanks to Andrew Duffy (@ajduffs) for passing it on). Its findings, especially in relation to cancelled projects for 2012 and CAPEX decisions for 2013 are most interesting.

Update 2 (6/03/2013): New infographic. Rather than more information via a table or a graph I thought I might show the breakdown of Australian stories via a map of Australia. I’ll include this as a standard graph from March onwards.

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Figure 4: Australian Mining Workforce Planning Australian stories by State (Feb 2013). National stories represented by the AUS figure. Source: Australia Mining and ABS. Software utilised: Stat Planet (non-commercial).

Random Analytics: UPDATED Mining Workforce Planning Scan (Jan 2013)

On the 1st of February I released the first of this year’s Mining Workforce Planning Scans. Since that release I have come across two additional pieces of intelligence which have altered my viewpoint of where mining is currently. First let me detail the additional data.

The first is a mea culpa. At the time of release I was capturing data via a daily email update from Australian Mining which I believed contained all the daily stories. This turned out to be an assumption (of the make an ass out of me, not you kind). In fact by correcting my methodology (using the News archive facility) I was able to add 9-stories, or 4.8% more data to the January statistics.

The second and more interesting piece of intelligence was that over the weekend I was able to complete a data validation of the 2012 Australian Mining data (all 1963 stories) and then converted that to the new format to allow for additional analysis. More on that after a look at the updated January data.

Here is the updated January Workforce Planning Scan with a slightly reduced WH&S count (no additional stories) and a slightly higher Employment count (one addition). Augment and Diversity also increased slightly with an additional story each.

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Figure 1: Australian Mining Workforce Planning Scan (Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

The updated January Positive/Negative Index has only two changes. Augment and Diversity both increase by +1 to the value of 1 with a positive story each.

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Figure 2: Australian Mining Workforce Planning Positive/Negative Index (Jan 2013). Data sourced from Australian Mining & News Archive.

Updated January data with an additional nine stories as previously mentioned.

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Table 1: Data for Australian Mining Workforce Planning Scan (Jan 2013). Data sourced from Australian Mining & News Archive.

When I initially looked at the finalised January data I came to the following conclusion:

To wrap up, I feel there is uncertainty in the story thus far. First of all, I am not sure at this stage we have enough data to state whether or not mining is starting to normalise or if the sector is still in its ‘wait and see’ mode. I suspect that it’s still in a ‘wait and see’ phase, especially with a federal election called for the 14th September 2013. Secondly, I know that the mining industry is no fan of the current Labor government and would be hoping for a conservative win but not sure how that will impact on the workforce planning issues and the data.

I guess we will all have to all ‘wait and see’…

Based on the additional nine stories I wouldn’t have changed my view. However, after completing the 2012 analysis in more detail I have now found a compelling trend commencing in September which shows that the mining industry has returned to a business as usual range and has been in that mode from approximately November.

First of all, let’s look at the incidence of stories since Jan 2012.

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Figure 3: Australian Mining Workforce Planning Scan (Jan 2012 – Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

Then a look at the Positive/Negative Index during the same period.

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Figure 4: Australian Mining Workforce Planning Positive/Negative Index (Jan 2012 – Jan 2013). Data sourced from Australian Mining & News Archive.

A lot has been made of the commodity crash that occurred in mid-2012 and its impacts on the mining sector (with my view remaining the same, in that most commodities remain overpriced and that oversupply will be the medium to longer term issue). Looking at the graphs over a 13-month period you can easily see that prior to the commodity crash Employment averaged a steady 14.7% and a very healthy 3.8 on the positive side. When commodity prices crashed from June/July the mining sector reacted in two ways. Some operators panicked, reacting by cutting costs and staff quickly, a fact highlighted by the negative 20 number for Employment in September. Other organisations have used the crisis over the past seven months to ‘clean house’, fixing up issues with both their book and labour. This is reflected in the Employment numbers continuing on a slightly negative trend, averaging minus 2.67 over the last three months from lows in September and October while the actual employment losses are still relatively minor (see the Employment Tracker in the previous January release).

I’ll no doubt have more to say about this in the February release as more data comes in but I can say with some confidence that the leaner (and meaner) mining industry has returned to business as usual and the ‘wait and see’ is on hold.

Random Analytics: Mining Workforce Planning Scan (Jan 2013)

The commencement of this year’s analysis of mining workforce planning brings forward two very distinct but different themes. With only 1 out of every 4 stories covered for the month related to workforce planning my initial thoughts were that the story is a continuation of the Q4 story, which was of an industry that had made the necessary cutbacks both in terms of costs and suppressing IR dissent but wasn’t quite sure where to go from here. The volatility of commodity prices, especially those of iron and thermal coal add weight to this direction, given that business will always take stability in prices over price instability (even when pricing is lower).

That’s one take on the first month of data. For the last five months of 2012 the mining coverage was dominated by employment contraction reports but prior to that it was Work Health and Safety (WH&S) which had the most reporting for six out of seven months as IR peaked at 24.4% in May on the back of the BMA dispute which even led the company to declare a force majeure. So, the question has to be asked, are we seeing a return to more normalised conditions?

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Figure 1: Australian Mining Workforce Planning Scan 2012 (Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

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Figure 2: Australian Mining Workforce Planning Positive/Negative Index 2012 (Jan 2013). Data sourced from Australian Mining & News Archive.

The three dominant mining Workforce Planning stories for January were WH&S (38.6%), Employ (20.5%) and FIFO/DIDO (at just 9.1%). The only category to record a positive reading was Recruit/Retain (+2), while WH&S (-6) was in the negative followed by Employ (-3) and IR (-3).

WH&S which focuses on everything safety, both good and bad is often the leading workforce planning category because mining is a hot, dirty and dangerous business. January did not commence on a good note given there were a number of serious incidents including the first reported fatality of 2013 when a Santos sub-contractor died of possible heat-stroke outside of Roma. Several other fatalities were noted in China and Indonesia and these increased the overall WH&S tally but did not add to the Pos/Neg Index as international coverage is recorded as a neutral indicator.

The Employ category which tracks employment gains, losses and general sentiment which dominated the coverage between August and December of 2012 was reduced to 20.5%. With a further 164 jobs lost in the sector and 6210 gained in 2013. You would imagine that the first indications are positive, however the $1.8Bn AUD McMahon contract win to run the Fortescue Metals Group (FMG) Christmas Creek expansion included 6000 hires. As was shown last year, when the iron ore prices tumbled mid-year FMG came under intense financial and speculative pressure. With the potential for the $AUD to rise this year and FMG’s inability to dig up its product for less than approximately $110pmt I would be concerned that, if we see further volatility in the steel index then, the employment gains might not be curtailed by global economic conditions. Overall employment sentiment was slightly negative (-3) but this was more about some ongoing cost cutting and job shedding (just 164 jobs lost) without any large pickup in new hires (210 if you exclude the McMahon contract).

FIFO/DIDO (or Fly-In Fly-Out/Drive-In Drive-Out) is a workforce planning subject unique to only a few industries and has become the dominant method of bringing in large construction and mining workforces into Australia’s remote regional areas, especially over the last decade. In many respects when I look at the FIFO/DIDO figures I also double-check against Work/Life which covers all aspects of Work Life Balance and Work Life Fit issues. At just four stories (one negative, one positive and two neutral) it wasn’t dominate but it is still on the radar for 2013. Of note was a story from my home state of Queensland which discussed tougher guidelines for FIFO with the intent of increasing development of regional areas, thus probably opening a discussion and less emphasis on pure FIFO operations over regional improvements.

Recruit/Retain which follows all aspects of recruitment and retention was the only category to record a positive number for January. As recruitment agencies put out their expected mining employment/skills wish-lists for 2013, the Mining Oil & Gas Jobs infographic (which was a little basic to be honest) generated a very large discussion (for further info see the Mining Oil & Gas Jobs website. I would also suggest that mining recruitment agencies, especially the small ones might come under some pressure this year as the sector insourced its recruitment during the latter part of 2012 as a continual cost cutting exercise while at the same time Foreign Direct Investment (FDI) comes off the boil.

Lastly, IR had just three stories, all of which were separate New Year industrial actions thus it equalled employment with a negative 3. This included a story at the Hay Point Terminal where 300 construction workers employed by McConnell Dowell and GEOSEA, have been waiting for up to four weeks to be paid! Fair enough too.

Here is a closer look at the January data.

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Table 1: Data for Australian Mining Workforce Planning Scan 2012 (Jan 2013). Data sourced from Australian Mining & News Archive.

Finally, here is a look at the Mining Employment Gains/Losses tracker for 2013.

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Table 2: Mining employment losses and gains 2013. Data sourced from Manufacturing Monthly Newsletter & News Archive.

To wrap up, I feel there is uncertainty in the story thus far. First of all, I am not sure at this stage we have enough data to state whether or not mining is starting to normalise or if the sector is still in its ‘wait and see’ mode. I suspect that it’s still in a ‘wait and see’ phase, especially with a federal election called for the 14th September 2013. Secondly, I know that the mining industry is no fan of the current Labor government and would be hoping for a conservative win but not sure how that will impact on the workforce planning issues and the data.

I guess we will all have to all ‘wait and see’…

Update 1 (1/02/2013): Magda Knight (Enhance Media SEO) requested an inclusion of a link to the Mining Oil and Gas Jobs site via email. Given that I had made especial mention of their January infographic (and it’s a most reasonable request) I’ve included that link above and in a previous paragraph.

Random Analytics: Mining Workforce Planning Scan (Dec 2012)

Here is the last Australian Mining Workforce Planning Scan updated to the 14th December which is the finalisation of Australian Mining until early 2013.

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Figure 1: Australian Mining Workforce Planning Environmental Scan 2012 (Jan-Dec). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

With only 10-days of data available (the minimum to calculate a decent trend) Employment and Workplace Health & Safety (WH&S) continued to be the dominant stories in December.

This is the sixth straight month where employment stories have been the leading workforce planning issue but there was an improvement in the percentile of positive stories even though the negative trend continued. In the month of November there were 9 unique employment stories, 5 being negative (297 jobs lost) and 3-positive stories (30 jobs gained).

The further breakdown of Employment stories for July through to December (as per the yellow data line):

  • July: 25.9% (61.9% negative, 38.1% positive);
  • Aug: 35.4% (71.4% negative, 28.6% positive);
  • Sep: 44.8% (76.9% negative, 17.9% positive and 5.2% neutral);
  • Oct: 35.8% (83.3% negative, 16.7% positive);
  • Nov: 32.9% (72% negative, 28 % positive);
  • Dec: 31% (55.6% negative, 33.3% positive and 11.1% neutral).

Here is a closer look at the monthly data breakdowns.

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Table 1: Data for Australian Mining Workforce Planning Environmental Scan Dec 2012. Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

Of note were a slight increase in stories relating to Diversity since November after Professor Marcia Langton raised the issue of an Aboriginal Australia middle class. Diversity stories which averaged just 2.1% over the year rock-bottomed between June and September as commodity prices crashed and mining companies looked for savings across their P&L.

A couple more graphs to close out the year. First of all is a look at the data breakdowns for 2012.

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Table 2: Data for Australian Mining Workforce Planning Environmental Scan Jan – Dec 2012. Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

The year of 2012 was really a story of two halves. Before July it was an industry still with great CAPEX projections, continued FDI growth through to 2014/2015, industrial action, skills shortages and wage pressures. From July the mining sector was dominated by collapsing terms of trade, the high Australian dollar, cost savings and redundancies.

To highlight the transition I’ve added a look at the data in two halves. For me the data for Employment and Recruit/Retain (Recruitment and Retention) sums it up. In the first half of the year the annual Employment stories were at just 29.8% while Recruit/Retain was at 70% of their yearly total. During the last half of the year as unemployment stories surged and recruitment/retention stories declined the figures had reversed reflecting the difficult conditions for mining over the past six months.

Out of interest, here is some baseline data I did for the first Quarter of 2009 (Jan – Mar only). As you can see, although the mining industry collapsed in Oct – Nov 2008 you can already see the largely negative employment stories declining (as stimulus packages were deployed across Australia and China) and by March the WH&S stories returning to longer term normalised levels. Although it would have been interesting to baseline for 2008 and 2009 I just didn’t have the time.

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Figure 2: Australian Mining Workforce Planning Environmental Scan 2009 (Jan-Mar). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

My last pick of the month for December goes to the Australian Mining story wishing everyone a Merry X-Mas and a Happy New Year. Not only do I wish to share that sentiment with all of you but I received an unsolicited special mention in dispatches for my input to the online magazine during 2012. I very much appreciated the thought. In return I’d like to specifically thank two Australian Mining staff for their support in building this Mining Workforce Planning Scan and Db. They are Andrew Duffy who was a great help on industry specific questions as I had a lot to learn about the industry over the past year and Sharon Amos who greatly assisted me mid-year when my email address was dropped unannounced.

Merry X-Mas to all of you working in or around the mining industry and a Happy New Year.

Random Analytics: Queensland Mining: Employment by Region

Over the past couple of years I’ve seen multiple presentations about mining employment and its impact on employment. As per a recent article ‘The Myth of Mining Employment’ I actually detailed just what a low employer the mining industry is.

Queensland is currently one of the worst performing economies in terms of state based unemployment so I thought it would be interesting to look at the most recent Census 2011 data and detail where the current mining employment is, the actual real numbers and at what concentrations they are in terms of overall employment and population.

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Figure 1: Queensland Mining Employment by Regions as a total. Data sourced from the Australian Bureau of Statistics Census 2011, the Australian Bureau of Statistics and the Queensland Office of Economic and Statistical Research.

Numbers don’t tell the whole story so I’ve also cut the graph to show the percentile employed in mining to the total employed population. As the graphic shows the mining hubs of Mackay, the Queensland Outback, Fitzroy and the Darling Downs all have higher than average mining employment numbers. While the large numbers from Brisbane reflect the concentration of corporate headquarters plus the natural centre for state Fly-In Fly-Out operations.

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Figure 2: Queensland Mining Employment by Regions as a percentile of total employed population. Data sourced from the Australian Bureau of Statistics Census 2011, the Australian Bureau of Statistics and the Queensland Office of Economic and Statistical Research.

As I’ve talked about previously, mining is not a big overall employer. When the Census occurred in August 2011 there were 226,900 Australians employed in mining, of which 44,000 resided in Queensland (or 19.4%). As at August of 2012 that number had increased by almost 50,000 to 275,200 so you could extrapolate that on state averages Queensland may have increased its mining employment by 10,000 or so over the past year.

The big employment opportunities for mining are in the infrastructure phases which are now coming off once in generational highs but still have forward momentum at least over the short term. Unfortunately, most of the discussion around mining employment looks to the large infrastructure based numbers currently in play and forgets the evidence that is freely available.

Random Analytics: Labour Figures (Nov 2012)

Here is my first response to the latest Australian Bureau of Statistics labour figures as presented via The Hon Bill Shorten MP’s 6 December 2012 press release. In that Minister Shorten stated:

The Minister for Employment and Workplace Relations, Bill Shorten, welcomed today’s stronger than expected employment result, highlighting that 843,800 jobs had been created since the Labor Government came to office five years ago (or around 460 jobs per day), an outstanding achievement, given fragile global growth, record high unemployment in the euro area and ongoing uncertainty around the looming ‘fiscal cliff’ in the United States.

First of all let me congratulate the Gillard government on a long term trend of delivering jobs growth during the worst employment conditions experienced by our northern hemisphere OECD partners. Only today Greece topped 26% official unemployment with youth unemployment breaking through the 56% mark (conditions that have not been present in any European country since the 1930’s).

Although the seasonally adjusted figures were an additional 13,900 jobs added over the past month the trend details show a very impressive story of job additions since the GFC took hold in Australia in late 2008. The most interesting aspect of this graph is the data changes that have occurred since the previous months data. If you’re interested check out a previous post titled ‘Abbott’s Promise’ which utilised the same datasets from October 2012.

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Figure 1: Australian Employment gains & losses by month. Data sourced from the Australian Bureau of Statistics.

Although our story is much better than other OECD nations, I have serious issues with the one dimensional story put forward by the government. Here are two graphics which detail some of my concerns around the simplistic story of labour statistics as told by the mainstream media.

My first concern was raised in my recent ‘Abbott’s Promise’ blog which discussed the almost doubling of the Australian working population since 1971 (increasing from 8.48-million to last year’s 15.64-million). For the record and given that we are increasing our working population cohort from 2018 to include 66 and 67-year olds my numbers would be larger than others (but I reflect the real world, not the absolute one of some of my colleagues).

In that blog I utilised a 40-year average of increased working age population, which came out at 178,993. I did this with the desire to project a more realistic figure of a declining working age population over the next 40-years.

Minister Shorten has expressed his employment increases since the commencement of the current Labor government in both an actual (843,900) and a daily average (460) so the next graph represents a look at the working population increase since July 2007 with an actual of 1,201,100 which averages out at a an increase of 240,220 per year or a required increase in job creation requirement of 658 per day. On those figures the current government should have a shortfall of 357,200 or 198 per day!

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Figure 2: Australian Working Population 2007-2012. Data sourced from the Australian Bureau of Statistics.

As put by Greg Jericho in his very excellent monthly labour force blog every wonks favourite statistic is the employment to population ratio as compared to the current participation rate of 65.1%.

The ABS puts this number at 61.7% which would correlate to an Australian population of 18.713-million!

Utilising the Census data from 2006 and 2011 and the current ABS estimated population the true figure of Employment to Population is actually 50.6%. Here is a look at Employment to Population numbers since August 2006.

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Figure 3: Australian Employment to Population ratio. Data sourced from the Australian Bureau of Statistics.

When I started out today I was as surprised as everyone at the stronger than expected labour numbers. At the time I tweeted that the “Participation Rate hides all of our sins”.

At the end of the day I have significant concerns over more than just the participation rate.

Random Analytics: Mining Workforce Planning Environmental Scan (Nov 2012)

Here is the latest Australian Mining Workforce Planning Environmental Scan updated to the end of Nov 2012.

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Figure 1: Australian Mining Workforce Planning Environmental Scan 2012 (Jan-Nov). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

Like the previous month, the most prominent Workforce Planning story and issue for November was employment. If you look at the data I present in Figure 1 you might consider this was a fait-accompli but the first story on employment (which was positive) didn’t come about until the 7th November and by mid-month only six stories were on the book. Most of the employment stories (19/25), which have been mainly negative, actually came about in the second half of the month.

This is the fifth straight month where employment stories have dominated. In the month of November there were 25 unique employment stories, with 18 being negative (with 1,071 confirmed jobs losses) and 7-positive stories (1,237 confirmed jobs gained).

The further breakdown of Employment stories for July through to November (as per the yellow data line):

  • July: 25.9% (61.9% negative, 38.1% positive);
  • Aug: 35.4% (71.4% negative, 28.6% positive);
  • Sep: 44.8% (76.9% negative, 17.9% positive and 5.2% neutral);
  • Oct: 35.8% (83.3% negative, 16.7% positive);
  • Nov: 32.9% (72% negative, 28 % positive).

The updated data really does show an industry trying to do any last tidying up prior to the Christmas break. 35-jobs gone at Grasstree, QLD and the 13-jobs lost at Bengalla, NSW are good examples of mid-tier and large companies cutting labour costs. What should be added is that I have not seen a lot of stories in relation to the contracting companies and their labour issues. No doubt they wouldn’t like this information in the public sphere.

A better idea of what the Australian mining industry employment story has been like at a macro level will become apparent when the ABS updates its Labour Force, Detailed data to include changes which occurred in the Sep – Nov period.

MiningEnviroScanNov12Data

Table 1: Data for Australian Mining Workforce Planning Environmental Scan Nov 2012. Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

Work Health & Safety (WH&S) returns to around its long-term average (currently 22.7%) with 17-stories which reflected 13-injuries and two deaths. The Cessnock man who died just kilometres from his home drifted off the road where he crashed into a parked car. One of the items that have become apparent in my research this year has been the large amount of deaths of miners driving to or from work, which also has to call into question the fatigue management plans of miners and their contracting companies plus the state of our roads which connects our mines to our modern day miners.

Industrial Relations (IR) had the third highest tally this month but at eight stories (10.5%) has almost decreased by a third from its half-year average of 15.5%. This has to be due to the post EOFY year crash in commodity prices. One thing to watch, especially in 2013 will be the increased uptake in union membership amongst mining communities, who for the first time are under employment security pressures.

My pick of the month for November goes to The WestBusiness story about the recent cuts in the Mining sector impacting on the gender gains in recent years. The data from my own research also shows the retraction on softer Workforce Planning issues with Work Life Fit (Balance) averaging just 0.7% since July, Skills Shortages 1.1% and Diversity (incl. of all diversity issues) the highest on a low 1.4%.

Random Analytics: Abbott’s Promise

On the 25th October I posted a blog titled “Romney’s Promise” which detailed some of the history and issues around one of the Republicans key election objectives, that is in their first term they would create 4-million new jobs for Americans.

I was a bit surprised to hear that in the past day Tony Abbott, the Australian Liberal leader made an announcement which stated:

The next Coalition Government will create one million jobs in five years and two million jobs in 10 years,” he said. “This pledge is achievable given our record and policies.

Now I’m all for job creation and the sentiment behind this statement is a positive projection from the leader of opposition but there are a number of issues here, no matter who forms the next Australian government.

Figure 1: Australian Employment gains & losses by month. Data sourced from the Australian Bureau of Statistics.

The first point I would like to make is the outstanding jobs creation journey that Australia has been on since the ABS commenced capturing the data and making it accessible to the public. Of the 416 available months of data only 51 months (12.26%) has reflected an overall employment loss, month-on-month. In fact if you look at Figure 1 you will see that since January 1993 we have actually only had 11-months of negative employment (or just 4.62%).

For Tony Abbott to realise his goal of creating 1,000,000 new jobs in just five years he would first need to serve two back-to-back terms. He would then need to create more than 16,700-jobs per month. If he wanted to do this in one complete term he would need to serve the maximum time (three years and 140-days) which would equate to a job creation program of 25,000 persons in any form of employment per month consecutively over 40-months.

Continuing to look at the data contained in Figure 1 this would be a historic feat. In the past 35-years (or to be exact 416-months) the Australian economy has only ever put on more than 25,000-jobs in a month 82-times (19.71%) and only lost more than 25,000-jobs on 4-occassions (0.96%). The last time we were negative by that amount was March 1991! The longest consecutive gain of more than 25,000-jobs per month were in Sep 1988 – Jul 1989 (11-months and 328,000 jobs) while the most recent was May to Nov 2010 (7-months and 235,000 jobs).

But Tony Abbott didn’t state he wanted to create 1-million jobs in just five years, he actually wants to create 2-million jobs over ten years. So who is he creating these jobs for?

Figure 2: Australian Unemployment 1978 – 2012. Data sourced from the Australian Bureau of Statistics.

Well, it’s not for the unemployed. As shown in Figure 2, we currently only have 652,700 people looking for some form of work at the moment. At the height of the mining boom in March 2008 there were just 465,800 people looking for work and at our worst point in September 1993 around 946,900 of us were looking for a job.

Even if a new Coalition government could employ every currently unemployed person in this country he would still need to fill the 1.35-million new jobs that he wants to create.

Where would he find these numbers?

The answer lies in the Australian working population figures.

Figure 3: Australia’s working population (15 – 67 years of age). Data sourced from the Australian Bureau of Statistics.

In the past 40-years Australia’s working population has increased from 8.48-million to 15.64-million. Traditionalists would only include the 15-65 year age cohort but since our superannuation system is moving officially to the 67-year figure by 2018 I’ve included the extra 396,082 estimated people of that age in my count.

The Rudd/Gillard governments were elected from September 2007 and during their tenure they have added 870,400 jobs to the economy. What they will not say is that over the past 40-years the Australian economy has required, on average, an extra 179,000 new jobs created to employ all of the new entrants into the workforce. So, for the Rudd/Gillard governments to have actually increased the amount of working people in Australia, they would have needed to actually create 895,000 new jobs plus one.

So for Tony Abbot to meet his figure and create new jobs he would need to add 16,667 new roles to meet his promise while also adding 14,916 to keep up with the average amount of new entrants into the workforce.

But Tony didn’t say ‘new’ jobs did he. He said ‘jobs’.

Given that he would first need to find 1,790,000 jobs for new entrants during his first 10-years in power he is only left having to then create 210,000 ‘new’ jobs to decrease the numbers of either unemployed (currently at 652,700) or non-participatory segments of the community. With an Australian participation rate of just 65.1% this would be a potential 7.8-million people you could look to assist back to employment. For those of you who work in this difficult policy area, a much easier thing to say than to accomplish.

In reality the creation of 1-million “new” jobs over the next two parliaments would be almost an impossible figure to achieve. Looking at the history this target has just never been achieved and as the Rudd/Gillard figures demonstrate creating 870,400-jobs during the Global Financial Crisis, although an excellent result compared to other countries such as Greece, did not even keep up with the demand from new entrants let alone increase the overall capacity of all Australians to be employed. Looking at what both sides of politics say about job creation just shows that by being a little bit tricky in language you can say almost anything about job creation because the subject is complex.

Robert McNamara summed it up much better than I when he wrote in One Hundred Countries, Two Billion People (1974) “A treadmill economy tends to emerge, in which the total national effort will exhaust itself by running faster and faster merely to stand still”.

Update 1 (5/12/2012): Greg Jericho (aka @grogsgamut) added a very detailed piece of analysis titled “A million new jobs ain’t what it used to be” via his weekly ABC The Drum blog. It’s good work and definitely worth taking a look at.

Random Analytics: Modern Soldiering

When Fredrick Winslow-Taylor wrote his great treatise, published in 1911, on “The Principles of Scientific Management”, he spent a significant amount of time explaining how “soldiering” impacted on the management and efficiency of the trades. Although his explanation covers many pages I felt the more impactful quote(s) included the following:

The English and American peoples are the greatest sportsmen in the world. Whenever an American workman plays baseball, or an English workman plays cricket, it is safe to say that he strains every nerve to secure victory for his side. He does his very best to make the largest possible number of runs.

The universal sentiment is so strong that any man who fails to give out all there is in him in sport is branded as a “quitter” and treated with contempt by those who are around him.

When the same workman returns to work on the following day, instead of using every effort to turn out the largest possible amount of work, in a majority of cases this man deliberately plans to do as little as he safely to turn out far less work than he is well able to do in many instances to do not more than one-third to one-half of a proper day’s work…

Under working, that is, deliberately working slowly so as to avoid doing a full day’s work, “soldiering,” as it is called in this country, “hanging it out,” as it is called in England, “ca canae,” as it is called in Scotland, is almost universal in industrial establishments, and prevails also to a large extent in the building trades; and the writer asserts without fear of contradiction that this constitutes the greatest evil with which the working-people of both England and America are now afflicted.

Over a hundred years have passed since Fredrick wrote those passages and nine months after finalising a six month deployment to Canberra where I worked with a Commonwealth department it struck me recently how much the world has changed, and yet, remains the same.

A recent article by Fiona Smith articulated the issue utilising research from the RMIT’s Iain Campbell in which they found that many Australian’s were working up to an additional 10-weeks per annum.

Looking at the very high level data provided in the most recent Australian census shows that 45.3% of Australians worked more than 40-hours a week, even with the Fair Work Australia limitation of a 38-hour cap on working hours.

Table 1: Australian Employment Hours Worked. Data sourced from the Australian Bureau of Statistics (2011 Census).

Modern “soldiering” is not about trying to find the slowest route to take a wheel-barrow up a hill, nor the pacing of a caddy so as to extract as much profit from his (or her) client. The ‘trades’ are no longer the greatest body afflicted by the disease of “soldiering”; it’s the modern office environment.

Modern “soldiering” is all about being seen to be busy. In my most recent Workforce Planning assignment (with a Commonwealth Agency) a not un-common opening discussion might go something like this…

“So how was work today?”

“Gosh, I got in this morning and I had 100-emails to answer, then two meetings, one of which was unscheduled then after lunch I was on the phones…”

Often, actual output is never mentioned. If we have a hard look at the modern office worker, output is actually hard to define and in some cases so amorphous as to be impossible to measure. So, the answer for many is to always seem busy, always a moving target to avoid closer inspection. It doesn’t matter that working long and inefficiently is detrimental to the business (and to the individual) because the point here is to create the illusion of work rather than completing defined outcomes. Often efficiency in highly bureaucratic organisations can be treated like a virus by other workers until the more efficient worker is driven out.

Modern “soldiering” is also defined by the ownership of 24/7 technology. Rather than create efficiencies these gadgets, from the humble mobile through to the most connected tablet are tools of control creating unnecessary levels of oversight and input rather than allowing delegated staff at level to make decisions without a double or even triple check. Who would have thought those odd guys in the 1980’s with those brick like phones would take over the world, zombie style!

It also isn’t enough to be busy at the office. Access to modern technology allows the modern office worker to be “soldiering” throughout the evening and into the weekend. Once again, efficiency is not crucial here, just the perception of being on the ball all of the time.

Modern “soldiering” is most often found in highly bureaucratised organisations, where inefficiencies can be resource levelled across many employee’s and is usually overlooked in the search for productivity gains. Concentrations of the affliction can occur in any part of the business but are more likely to happen in the middle management, administration or enabling functions.

One final note, for which Fredrick Winslow-Taylor (and the worker of 1911) might have found ironic and amusing.

The modern office worker today will be more likely to be completing a DIY (Do-It-Yourself) project or playing golf on the weekend when not answering that all important phone call or answering that ‘can’t wait’ email. They wouldn’t be looking for the slowest route for the wheel-barrow or playing their round of golf on a go-slow.

No, they’d be completing these tasks as efficiently as possible so they could go back to work and continue to ‘soldier’.

For the record: This is a revised and updated article which I authored and posted for HR.com on the 10th March 2012.

Random Analytics: Mining Workforce Planning Environmental Scan (Oct 2012)

Here is the latest Australian Mining Workforce Planning Environmental Scan updated to the end of October 2012.

Figure 1: Australian Mining Workforce Planning Environmental Scan 2012 (Jan-Oct). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

In the words of Tony Abbot, this will be more of a python squeeze than a cobra strike. I’m not talking about carbon tax though but a slow reversal in mining employment over recent months.

The most prominent Workforce Planning story and issue for October was employment. This is now the fourth month where employment stories have dominated and as the data shows, it’s been mainly negative. In the month of October there were 17 unique negative employment stories with 1,294 jobs lost and only one positive story with an employment gain of 300.

The further breakdown of Employment stories for July through to October (as per the yellow data line):

  • July: 25.9% (61.9% negative, 38.1% positive);
  • Aug: 35.4% (71.4% negative, 28.6% positive);
  • Sep: 44.8% (76.9% negative, 17.9% positive and 5.2% neutral);
  • Oct: 35.8% (83.3% negative, 16.7% positive).

The trend over the past four months has been of an industry looking to cut costs and delay operations. Since July there have been 3,597 new jobs gained against 7,196 lost. So for every job created there are at least two that now no longer exist. Given that the Australian industry data will be updated by the ABS for the Sep – Nov period shortly I can confidently predict that there will be a drop in quarterly mining employment for the first time since May-Jul 2009. What I can’t predict will be how large the drop in employment will be. If the general news media is detailing an approximate 3,500 loss then the actual numbers may be around twice that (comparable to the losses in the first two quarters of 2009).

Also of note for October was a high concentration of positive Engagement stories, represented by the maroon data line (making up 16.4% of all Workforce Planning stories with 72.7% of those positive). This came about because of a number of industry conferences promoting mining and two CFMEU campaigns, including the advocacy for sustainable mining and employment in the Tarkine region of Tasmania.

Table 1: Data for Australian Mining Workforce Planning Environmental Scan Oct 2012. Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

Also coming in at 16.4% was Work Health & Safety (WH&S) although there was a greater balance between negative stories (which reflected near-misses, injuries or death) against neutral or positive articles. Included in this months WH&S data is the tragic story of Warren Black, killed in a worksite accident in Rutherford, NSW. WH&S stories have now averaged 22.9% for the first 10-months of 2012 and the lower October figure is more a reflection of the negative employment environment dominating the headlines.

On that note, I’ll leave you with my pick of the October stories, which is a bit dark and somewhat of a mystery at sea. The coal ship Sage Sagittarius docked in Newcastle, Australia in the past week with its recently boarded safety inspector deceased, the third such death on the ship since mid-September!