Random Analytica

Charts, Infographics & Analysis without the spin

Tag: Workforce Planning

Random Analytics: Australian Mining Employment (Aug 2014)

Mining continues to play an important part in the overall economy of Australia. For all of the discussion about the sector many people don’t realise that mining only employs 264,400 (source: ABS). This is just a fraction of Australia’s total labour force and even that number is often conflated given that many who work in mining are employed on infrastructure or services activities rather than directly in operations.

Each month I spend some time collating stories from a wide range of industry and media sources to build some analytics around the current state of mining employment in Australia. The month of August 2014 was quieter than previous months when more than 3,000 jobs were lost in June and another 1,000+ in July yet at the end of August we still saw more jobs lost than gained.

Here are the charts for Australian Mining Employment through to the end of August 2014.

1 - MiningJobsByState_Infographic_Aug2014_140901

The opening infographic looks at total job gains and losses by State or Territory for the month of August. Where a job cannot be affixed to a certain site then the losses or gains are attributed to Australia (Non Specified).

Data-Points: Queensland was the only state to lose more jobs than it gained, while New South Wales and Western Australia picked up a small amount each. Two Australian companies, ResCo and Bluestone Global, cut 330 staff across the country.

2 - MiningGainsLosses_Chart_140901

The first employment chart looks at the previous 24-months from a total mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are then split into operational (red) and mining services (maroon). Mining services can include mining specific service centres, distribution, back-office functions and transport (thanks to learitee from the Australian Mining online community for the suggestion).

Data-Points: All of the 520 job gains in August were operational including the Baralaba North Coal expansion (QLD, Coal, 200); Maules Creek (NSW, Coal, 100) and I’ve included the 120 staffers at the recently opened QCLNG Gas Operations Hub. On the minus side Peabody Energy cut 350 staff from Burton Coal (QLD) including 100 contractors by text message and Glencore cut another 100 from its Newlands Coal (QLD) site.

3 - MiningResourceGainsLosses_Chart_140901

The next employment chart looks in more detail at the main resource types (Iron Ore, Coal, Gold/Copper, Zinc/Lead/Nickel, CSG/LNG and Uranium) by either a job gain or a loss.

Data-Points:

  • Although Coal gained 300-jobs it also lost 466 making this the 26th consecutive month of losses in that resource type;
  • Across the six resource types there was actually a gain of 6-jobs overall.

4 - MiningSectorSentiment_Chart_140901

The last chart tracks employment gains and losses sentiment and is now back dated to October 2011.

Data-Points: Sentiment took a slightly negative turn this month even with a lot of positive news including final approvals for Adani’s Carmichael Coal (QLD) and other smaller sites. With iron ore now touching on $80pmt during the month it has been hard to generate much good news in the West and Venture Minerals Riley Iron Ore (TAS) has deferred its project claiming approvals delays on top of poor pricing.

Another interesting point is that now I’ve pushed back the sentiment to Q4 2011 you can now see a lengthy period of good sentiment. That period of positive sentiment represented the sustained period of growth following the global recession stimulus package implemented by the Chinese several years before.

Juking the Stats (August 2014)

WorleyParsons again cut a significant amount of jobs across its global network. Recent news reports are stating they cut 1,700 jobs this year yet my research tells me the number is more likely to be 1,900. Furthermore this is the latest in a tranche of cuts and I believe they are close to cutting 4,800 since late 2012. WorleyParsons always discuss global job-cuts but given that most of their losses are currently occurring in Australia I suspect the bulk of recent layoffs would be amongst Australian employees. No journalist that I can see has put that question to them.

Summary

Not the best month but neither was it the worst. I continue to see trouble brewing if the iron ore price remains at $80pmt so I would be keeping a weather-eye on that over the next couple of months.

Random Analytics: Australian Mining Employment (to July 2014)

Mining continues to play an important part in the overall economy of Australia. For all of the discussion about the sector many people don’t realise that mining only employs a fraction of Australia’s workforce (currently just 264,400 source: ABS) and that many in the industry work on the construction rather than the operational side.

Each month I spend some time collating stories from a wide range of industry and media sources to build some analytics around the current state of mining employment in Australia. Here are the charts for Australian Mining Employment through to the end of July 2014.

1 - MiningJobsByState_Infographic_Jun2014_140801

The opening infographic looks at job gains and losses by State or Territory for the month of July.

Data-points: After a horror month in June when 1,592 jobs were lost Western Australia has picked up some employment this month with announcements by Atlas Iron (+200) and Transalta (LNG +250). For the rest of the country the numbers were all in the negative, even in New South Wales which gained 450 (Whitehaven Coal) but lost 915 overall including big numbers in the Hunter Valley. Overall the nation gained 920 and lost 2,043 mining jobs.

2 - MiningGainsLosses_Chart_140801

The second employment charts looks at the previous 24-months from a total mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are represented in red.

The biggest data-point for July 2014 was that the big numbers seen last month reduced slightly as those some of those jobs finalised in July and that we are now in the third month of 1,000+ job losses and the second consecutive month of 2,000+ job losses. The last day of the month was especially bad with 400 Hastings Deering jobs going in Queensland and another 95 coal positions being axed by BHP in NSW.

It wasn’t all bad news as some large operational announcements, like the Whitehaven Coal announcement of 450 jobs at its Maules Creek mine offset some of the big losses being announced in the Hunter Valley.

3 - MiningResourceGainsLosses_Chart_140801

The next employment chart looks in more detail at the main resource types (Iron Ore, Coal, Gold/Copper, Zinc/Lead/Nickel, CSG/LNG and Uranium) by either a job gain or a job loss.

Two key data points:

  • Although there were some gains in both coal and iron ore they were much smaller than the operational jobs lost in both resource types;
  • Coal has lost operational jobs now for 18 consecutive months (the last recording of no job losses was in Jan 2013).

4 - MiningSectorSentiment_Chart_140801

The last chart tracks employment gains and losses sentiment and is now updated back to December 2011.

Although the employment news is quite bad the sentiment is actually positive. I’ve seen this occur before. If you look at the difference between Jul 2013 (-24) and August 2013 (+3) you see a big jump in sentiment. This occurred during last year’s commodity crash as government pushed through mining approvals (which is a positive indicator even though it might not include any immediate employment outcomes). So although there are continued job cut announcements they are being largely offset (in terms of sentiment) by positive future announcements, such as the Adani announcement for the build of Carmichael Coal in Queensland.

Juking the Stats (July 2014)

Silver Lake Resources is set to cut more jobs as the gold miner closes its Lakewood Mill but didn’t announce how many would go or when.

Summary

It’s been another bad month for mining employment which came as a surprise as often the first month in a Financial Year is a chance for companies and governments to highlight some good news or to make positive announcements. This is reflected in the data where job losses outweigh job gains but sentiment is improving.

Saying that governments don’t create jobs, businesses do and with so much infrastructure finalising and the narrative squarely fixed on productivity I’ll suggest that you will see more negative than positive news in coming months.

Random Analytics: Australian Mining Employment Update (to end June 2014)

Some years ago while working within the Workforce Planning fraternity I quickly understood that June was a tough month for employment, no matter what sector you either guided or worked in. It might have something to do with the seasons given that companies traditionally cut staff in the coldest months. Alternately it might be impacted on the business cycle. After more than a decade in Workforce Planning I’ve found that, whatever your view, business reflects more pragmatic ends.

Last month I suggested that June is often a horror month for mining employment.

My prediction was borne out (no matter the reason). What I didn’t guess was that the job gains versus the job losses would be the worst in more than two-years, potentially making June 2014 the worst month in mining employment since the commencement of the Global Recession (effectively Nov/Dec 2008).

Here are the charts for Australian Mining Employment through to the end of June 2014.

1 - MiningJobsByState_Infographic_Jun2014_140701

 

The opening infographic looks at job gains and losses by State or Territory for the month of June 2014.

Data-points: All key mining states (with the exception of the Northern Territory) have lost significant numbers of operational mining (human) capital. The only positive is that Tasmania picked up an additional 50-positions.

2 - MiningGainsLosses_Chart_140701

The first of my mining employment charts looks at the previous 24-months from a mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are represented in red.

The biggest data-point for June 2014 is that the losses in employment are the greatest in two-years, effectively making June 2014, officially, the worst month for two years but, in effect, the worst month for mining employment since the Global Recession which kicked off in Nov/Dec 2008.

3 - MiningSectorGainsLosses_Chart_140701

 

The next employment chart looks in more details at the main resource types (Iron Ore, Coal, Gold/Copper, Zinc/Lead/Nickel, CSG/LNG and Uranium) by either a job gain or a job loss.

Of the 3,939 job losses for the month of June the key points are:

  • 100% were operational job losses (effectively, zero in construction);
  • 79% were included in my tally of key resources;
  • 37.5% of the total operational losses in June were in the Coal sector, the 24th month of consecutive losses in that sector;
  • 0% of the losses were in mining construction.

It should also be noted that the figures above do not include projected job cuts from BHP Billiton who are currently reviewing their iron ore business in West Australia.

4 - MiningSectorSentiment_Chart_140701

The last chart tracks employment gains and losses sentiment.

Given that I haven’t commented on this chart for some time the key points are that August –November 2012 and Q4 FY 2012/2013 plus July 2013 were very negative times for mining employment (effectively corresponding with declining commodity prices). We are currently undergoing a similar period with soft mineral pricing from late 2013 through to even more depressed prices in the last six weeks of the financial year.

One last point on the uptick in June 2014. There were lots of positive announcements for mining in June from government (i.e. positive EIS announcements) but little in the way of immediate positive employment benefits.

Juking the Stats (June 2014)

Whitehaven Coal is cutting jobs at its coal handling and preparation plant at Gunnedah in response to “tough” coal market conditions. At the same time they are not releasing much in the way of details or numbers of the people they are putting out of work and potentially on the bench for an extended time. I look forward to a future update.

Even Money Prediction

After two years of consecutive coal mining employment losses due to depressed thermal and metallurgical coal prices the continued low iron ore pricing will see a similar (and consecutive) drip feed of employment decline in that resource group.

Random Analytics: Australian Mining Employment Update (May 2014)

For a number of professional and personal reasons I have not completed, nor updated my Mining Workforce Planning Scan since September 2013 (some ten months ago). As it happens an article by Australian Mining last week reminded me that it is something I should have a look at again, especially given the recent bad news in regard to mining employment. 2014: Mining jobs cut so far… Excerpt:

Shaky commodity prices and the end of the boom have resulted in a bad year for job losses, and BHP and Rio have warned of more to follow. Cutbacks have ranged from small belt-tightening measures, such as 36 job losses at Illawarra Coal, to the level of catastrophic collapse such as when mismanaged contractor Forge Group folded leaving 1300 out of work early this year.

Coal has been the worst hit in mining, with Vale announcing the closure of all operations in the Hunter Valley for care and maintenance, among a series of other cutbacks by BHP and Rio Tinto. Queensland has also suffered, with Queensland Resources Council president Michael Roche saying that 10 per cent of mines in the state are now in a “very precarious position”.

Industry analysts have blamed oversupply on the global market for the plunge in the price of coal, with hard-coking coal having dropped to $US120 per tonne from $US330 in 2011. Iron ore has also suffered price-wise, falling from $US135 per tonne down to $US110 in April; however the industry seems to have escaped any major job losses.

There is no doubt that after that article was written the news got worse with further cuts, especially in New South Wales coal mines. With iron ore falling another $15 to just above $95 at the end of May how long before we see another round of severe job cuts in the Pilbara similar to September 2012?

The Australian article then lists a large number of job losses in 2014. But what do these job losses look like compared to job gains across the last 12-months. Also given that Australia has become so currently reliant on mineral exports such as iron ore, coal and future reliant on growth in exports of LNG and Uranium how are job gains or losses looking for these resource types.

Re-commencing the first of a monthly series in Mining Employment updates here is a look at how that story from Australian Mining translates into two charts.

1 - MiningGainsLosses_Chart_140601

The first chart looks at the previous 12-months from a mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are represented in red.

The obvious take away from this chart is that outside of August and September 2013 the losses have far outweighed the gains, with job cuts underrepresented to some extent as some companies chose to supress actual details. The data for May includes:

  • 392 operational jobs added;
  • 1,000 infrastructure jobs added;
  • 1,944 jobs lost.

2 - MiningSectorGainsLosses_Chart_140601

The second chart attempts to breakdown the job gains and losses by key resource types (Iron ore, Coal, Gold, Copper/Zinc, CSG/LNG & Uranium). Similar to the previous chart the only period of overall job growth occurred in these resource types happened between July and September 2013. The May details were:

  • Iron Ore: 120 lost;
  • Coal: 350 added and 828 lost;
  • Gold: Newcrest opened the Cadia East Gold Mine (see Juking the Stats) and 94 lost.

Juking the Stats (May 2014)

The most notable manipulator of employment information in May was Newcrest which opened its Cadia East Gold Mine with the assistance of NSW Premier Mike Baird. The mine is expected to support 1,900 direct and indirect jobs (source: MineWeb). No doubt it has created some employment but given that Newcrest NEVER shares it job loss data (Telfer July 2013 and November 2013 most recently) and its financials have been less than satisfactory I felt that conflating direct and indirect employment might be a way to also conflate its entire Cadia Valley Operations footprint). I have requested further details directly from Newcrest and am awaiting a reply before including Gold employment numbers for May.

Other Jukers include:

  • Perilya who ended their MacMahon contract which will result in job losses but no specifics were provided;
  • BHP Billiton has confirmed that there will be job losses (a source suggests in the hundreds) at Worsley Alumina but have not confirmed details.

Final Observation(s)

May/June tend to be months where companies clean house, especially around employment so June may prove to be another awful month for further job cut announcements. On that note, I will return next month with updated employment charts and a revised employment sentiment chart which will hopefully add another dataset for your consideration.

Random Analytics: Abbott’s Promise. 1-million jobs in 5-years (to Jan 2014)

“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.” Tony Abbott (27 Nov 2012)

First of all, Labor side should be commended for its employment story during its term in office (2007-2013) where 955,200 jobs were created. Saying that one of my key criticisms of the then Employment Minister, Bill Shorten was that the spotlight was always on total job creation rather than looking at full-time and part-time job breakdowns. During the Labor years 450,400 part-time jobs were created against 504,800 full-time ones.

Currently, there is a lot of discussion in Australia around employment and unemployment at the moment. In the past month many companies have announced large job cuts either in the immediate or near future. Recent examples with direct jobs lost include Holden (2,900), Toyota (2,500), Forge (1,400), Rio Tinto (1,100), Qantas (1,000), Electrolux (544) and just today Alcoa (980). The seasonally adjusted unemployment rate hit 6% for the first time since July 2003 (when it peaked at 6.1%).

The RBA is has for some months forecast that the unemployment rate would hit 6.25% during 2014, then steadily improve from 2015. That view remained unchanged in its most recent Economic Outlook.

Thus it would be unfair to immediately thrust blame on to Tony Abbott and the recently elected Coalition government as many in the opposition camp are doing.

To that end I thought I might shine a light on the Abbott promise. 1-million jobs in five years. Here is a look at the data for the first four months to January 2014.

1-AUSEmployGainsLossestoJan2014_140218

First chart is a look at employment gains and losses since the Coalition took power in September 2013. Two points:

  • The total jobs are slightly negative, that is 9,949 jobs lost; and
  • The sample size is way too small to start analysing and unemployment figures from the ABS are generally considered a lagging indicator.

2-JobCreationtoJan2014_140218

Second and last chart looks at job creation in three parts. Total job creation (green), full-time employment (blue) and part-time employment (maroon).

In effect there have been 56-thousand full-time jobs lost against 46-thousand part-time jobs gained for a gross loss of 9,949 jobs.

Final Thoughts

Bill Shorten’s recent commentary around 54,000 job losses (or one job every three minutes) might make a good sound grab but actually only reflects full-time employment losses over a very short timeframe.

I think it’s disingenuous of him as the former Minister to use total employment figures then but now only concentrate on one set of numbers.

That aside I wonder if the RBA has underestimated the unemployment nadir at 6.25% which will make it much harder for Tony Abbott to hit his 1-million jobs in five years promise.

Only time will tell. I’ll keep you updated.

Random Analytics: US/Australian Prison Populations against other Job Types

Saki Knafo of the Huffington Post posted an interesting article and infographic about the massive size of the US prison population against employee’s, such as specific engineering and education job types as defined by the Bureau of Labor Statistics.

1 - 051113_Infographic_SKnafo

Excerpt: If sitting in a prison cell was a job, it would be one of the most common jobs in the United States. In 2012, there were some 1,570,000 inmates in state and federal prisons in the U.S., according to data from the Justice Department. By contrast, there were about 1,530,000 engineers in America last year, 815,000 construction workers, and 1 million high school teachers, according to the Bureau of Labor Statistics.

For the full article and Saki’s observations click here.

I thought it would be interesting to do a comparison infographic using Australian data.

2 - 131109_AusPrisonvsEmployees_v1.0

The key finding of my comparison infographic is that this highlights the extraordinarily high incarceration rate for the United States where around 716 per 100,000 people are in prison. In Australia the figure is 130.

For context some believe that North Korea has an incarceration rate of between 600-800!

So, then when you compare it against job types the differences really stand out. Australia has 200,615 working engineers (there are actually 245,631 qualified engineers) and according to the most recent census 125,028 school teachers. My secondary school teacher data is based on a tweet by the ABS which is 1,000-higher than the current public estimation from the 2006 census.

Although I was happy with most of my data comparisons not everything quite translates from the United States to Australia. Detailed numbers by the Australian and New Zealand Standard Classification of Occupations (ANZSCO) is difficult to come by whereas the Occupational Employment Statistics detail provided by the Bureau of Labor Statistics was very detailed.

Thus engineers, social workers, secondary school teachers, childcare workers and enrolled nurses (the US equivalent being nursing assistants) are very like-for-like occupation types.

Where I did take some license in my comparison was with the following:

  • US construction labourer vs. Australian trade assistants. Could only find data in relation to the electrical and telecommunications sector;
  • US lawyers vs. Australian barristers. I believe the qualifications and skillset are the same but wouldn’t bet my house on it; and
  • US physicians & surgeons vs. Australian surgeons. Again, I believe the numbers to be comparable but with the caveat that I took my numbers from the Royal College of Australian Surgeons only.

More detail on Australian sources:

Prisoners: http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/24B61FAA213E5470CA257B3C000DCF8A/$File/45170_2012reissue.pdf

Engineers: https://www.engineersaustralia.org.au/sites/default/files/shado/Representation/Stats/statistical_overview_2012_1.pdf

Secondary School Teachers (including alternate): http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/90051CE31F11385ECA2579F30011EF35/$File/42210_2011.pdf

3 - 121127_Tweet_2011Census_SecondarySchoolTeachers

Enrolled Nurses: http://joboutlook.gov.au/occupation.aspx?code=4114&search=keyword&Tab=stats&graph=EL

Social Workers: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003Aug%202013?OpenDocument

Electrical & Telecom Trade Assistants: http://www.open.edu.au/careers/construction/trades-assistants-electrical-or-telecommunications

Childcare Workers: http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/7CD60F39593FBCEACA2579120016E0DA/$File/41020_community_sep2011.pdf

Surgeons: http://www.surgeons.org/media/437871/rpt_racs_workforce_projection_to_2025.pdf

Barristers: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/8667.0Main%20Features32007-08?opendocument&tabname=Summary&prodno=8667.0&issue=2007-08&num=&view=#AnchorEmp

Random Analytics: Mining Workforce Planning Scan (Sep 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 data items (expressed as categories) the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how Australian MINING is positioned from a workforce planning perspective.

Two Solid Months

With the Australian election now over there has been a return to confidence in the mining sector not seen since June 2012 when more than eight months of positive, or at least neutral employment sentiment were recorded (my analysis currently only goes back to November 2011). In terms of the mining workforce planning scan the trend is confirmed when the employment sentiment is consistently zero or above (see Chart 2) AND the employment category number is below Work Health & Safety (WH&S) or as the market tightens Industrial Relations (IR) (see Chart 1). We are not quite there as there is still some delayed cost cutting going on along with new ventures being announced.

Learning & Development & Research & Development (L&D/R&D) recently spiked during the August month on the back of a lot of election chatter around mining skills as an answer to other slowing sectors (see Chart 1 & 2). This has returned to a more normalised value during September but was an interesting outcome from the 7 September Commonwealth election.

Employment numbers were strong but it should be noted that many of the announcements made were actually on the infrastructure side making up 6,270 (or 87%) of the total monthly employee gains reported and most of those were actually detailing the tier 1 or tier 2 arrangements for iron projects in Western Australia or LNG projects in the Surat Basin, Queensland (see Chart 3).

Chart 1: Workforce Planning Categories

 2 - Mining_Categories_Sep2013_131014                      

The following chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and the frequency of stories.

Chart 2: Positive/Negative Index

3 - Mining_PosNegIndex_Sep2013_131014

The next chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and their positive or negative weighting.

Chart 3: Mining Employment Gains & Losses

4 - Mining_Employment_Sep2013_131014

The following table looks at the reported employment gains and losses. Job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit information relating to redundancies. Employment gains are forecast and include infrastructure phases. Often employment gains are overstated as they link to public relations exercises.

Final Thought or Prediction

I see another month of transition data coming in as some companies continue to tidy up their less difficult workforce development areas (contractors, costs and corporate), some companies move beyond the low hanging fruit to address more difficult components of their strategic workforce planning and a number of companies launch greenfields proposals.

Interestingly, I also see the commencement of a new phase of Industrial Relations activity as commodity prices solidify and productivity ramps up.

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (August 2013). If you are interested in “How does the global economy work in a world of reducing ‘work’” then please check out my other blog PeakJobs.

Random Analytics: Mining Workforce Planning Scan (Aug 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 data items (expressed as categories) the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how Australian MINING is positioned from a workforce planning perspective.

Election Bounce

If there was one key theme of the August it was that sentiment shifted from extremely negative to very positive. In fact, the sentiment reading of +14 was the highest I’ve recorded in 22-months of confirmed data.

With most commodity prices stabilised or increasing, the Australian dollar reducing into a more competitive range and miners now fully focussed on increasing productivity have we reached the point where the sector is on the rebound?

At this stage I’m going to say, maybe.

The mining industry has made no secret of its distrust and dislike of the current Labor government (no matter who leads it) and its desire to see a new Coalition team in place. No matter whom leads the next government the following is still true:

  • Commodity prices will still be dictated by China for the foreseeable future;
  • The Australian dollar will continue to rise or fall on the whim of US Federal Reserve decisions;
  • Mining took its eye of the productivity ball during the boom. Future productivity gains will come from the sectors ability to contain its structural costs by not re-inflating all of its input costs (again).

The data does look good for August. It’s certainly the best that I’ve seen in a long time.

It could just all be election bounce though.

Workforce Planning Categories

  2 - Mining_Categories_Aug2013_130902                     

The following chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and the frequency of stories.

WH&S (Work Health & Safety) was the leading category with 20-stories (24.7%). Generally WH&S is one of the leading categories when mining is tracking well or during BAU (Business-As-Usual) as safety programs and incidents reporting is reasonably consistent (averaging 18.25-stories per month in 2013).

Employment was the second leading category with 19-stories (23.5%) as the mining sector paused its cost cutting activities after the election was called and recommenced discussing future prospects. L&D/R&D (Learning & Development/Research & Development) was the third category with 11-stories (13.6%) without any election related announcements.

Subjects that were not discussed in August were SkillsShort (Skills Shortages) and Work/Life (Working Life Fit often referred to as Work Life Balance). The last Skills Shortage story was in March, the only one of the year (or just 0.0006% of all stories). That’s not to say there are no operationally critical, critical or hard-to-fill roles in mining, just the sector has gone through two heavy phases of cost cutting and job shedding thus few employees are moving and turnover rates would be low.

Positive/Negative Index

3 - Mining_PosNegIndex_Aug2013_130902

The next chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and their positive or negative weighting.

The most negative indicator for the month was IR (Industrial Relations) with a -4 sentiment. As the only negative reading greater than -1 and the most positive month in 22-months of data I wouldn’t read too much into this, especially during an election month. That said, with the Coalition almost certainly forming government next week IR could become a more interesting space.

L&D/R&D was the leading positive category with a +7 for August, the highest positive monthly indicator for 2013. There were a lot of announcements, like the Tasmanian University Research Lab co-funded with Newcrest or the University of Wollongong’s opening of the Joy Global Remote Access Facility as examples.

Given the recent $5.77-billion dollar write-off and job slashing I wonder where Newcrest found $2.5-million to open anything non-core business? Very curious.

Mining Employment Gains & Losses

4 - Mining_Employment_Aug2013_130902

The following table looks at the reported employment gains and losses. Job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit information relating to redundancies. Employment gains are forecast and include infrastructure phases. Often employment gains are overstated as they link to public relations exercises.

With just 22-jobs confirmed lost and 6,885 jobs projected the employment numbers in August were very impressive.

Although it still has to complete the Commonwealth Department of Sustainability, Environment, Water, Population and Communities EIS the Waratah Coal project received Queensland State approval. Officially this project will generate 3,500 infrastructure jobs from 2014 and 2,300 operational jobs from 2016 onwards. As a rule of thumb I think of the coal industry as turning every four infrastructure jobs into one FTE when they commence operations. So 2,300 in 2016 is probably closer to around 900 operational roles.

The Shell Prelude floating LNG were a little more honest when they forecast their job numbers suggesting that 1,000 jobs would be created by 2017 including 350 on the platform and 650-indirectly. LNG is a worse converter of infrastructure to operations phase employment and this is a project where most of the construction is modulised offshore then shipped in. I’ll be following this one closely just to reset my modelling.

Internationally, job shedding is ongoing with 1,700 cut from Oyu Tolgoi (Mongolia) and 920 gone from Tampakan (Philippines).

Here’s a look at the Aug data.

5 - Mining_Data_Aug2013_130902

Story of the Month

The story of the month is the Workplace battle which looms over Collinsville and the increasing use of transit workforces as industrial relations instrument rather than a response to skills shortages or for economic considerations.

Final Thought or Prediction

With the two party preferred split currently sitting at 54-46 (2/09) in the Coalition’s favour it is highly probably there will be a change of government on Sunday.

I’ll enjoy reading this blog in three years but my prediction will be that a Coalition government will not necessarily mean a radical overhaul of Industrial Relations during their first term, even  with a strong push from the business community (*unless there is a massive downturn which impacts Australia).

Happy Election and don’t forget to vote.

Random Analytics: Manufacturing Workforce Planning Scan (FY 2012-2013)

The Manufacturing Workforce Planning Scan is a quasi-quantitative report card built from relevant online industry magazines and media sources. Utilising 15 category metrics the scan collates relevant stories over a period of time (in this case a Financial Year) to give a picture of how the industry is positioned from a workforce planning perspective.

The Slow Atrophy

Before we look at the last 12-months of Workforce Planning data I thought it might be useful to look at the previous two decades of manufacturing employment and three possible future scenarios over the coming decade.

1 - Manufacturing_1994~2023

In 1976 Australia had approximately 1.7-million manufacturing workers, by 1994 this had reduced to 1.12-million and in February of 2013 this had reduced further to just 954,200. In the graph above the 1994-2013 data is represented by a black line (corresponding with ABS yearly averaging through to 2012 then SkillsInfo data as at Feb 2013. The SkillsInfo data parallels with the very early election timeframe as put forward by Julia Gillard, the previous Prime Minister).

Scenario One: The blue line shows an increase in manufacturing employment of 95,420 over a period of 10-years is a highly optimistic variant and goes against a four decade trend. Some of the reasons why this scenario is unlikely include continued off-shoring of Australian manufacturing, increased productivity without increased employment through Automation/Augmentation take-up and a continued slow decline in family business manufacturing.

Scenario Two: The green line shows a continued decrease of manufacturing employment by 8,375 per annum which is the 20-year average of atrophy in the manufacturing sector.

Scenario Three: The maroon line shows a hastened decrease of manufacturing employment by 35,420 per annum to just 600,000 in line with recent comments by Bernard Salt who stated:

“If you go back to 1976, that figure was around about 1.7 million so over a quarter of a century we have gone from 1.7 to under a million and in 10, 15 or even 20 years’ time, we’ll still be making stuff but we might not need 980,000 workers,” Salt says.

“We might only have 600,000 workers and we might be making bricks and beer, stuff that’s too hard to bring in from overseas at an effective rate, or it might be high tech products that only the Australian market can make.

“But in either case, the continued diminution of the manufacturing I would see – not elimination but continued erosion.”

In all fairness to Bernard he didn’t put a timeline on the reduction to 600,000 but it would be my guess that by 2023 the number of Australian’s employed in manufacturing will be somewhere between the green and red lines with a weighting toward the red line.

Here are the manufacturing analytics from financial year 2012 – 2013.

Workforce Planning Categories

2 - Manufacturing_Categories_2012~2013

The following chart is 12-month look at 15 manufacturing related workforce planning categories and the amount of times it features as a story.

Employment was the leading category for eleven months of FY 2012-2013 with 203-stories and a monthly average of 33.6%, slightly more than 1/3rd of all stories with relevance to workforce planning. With the constant atrophy of employment in the sector the weighting should have been greater (and more negative) but I believe there is an element of job-loss fatigue in terms of a sector theme.

IR (Industrial Relations) was the only other category to be a leading indicator, with 14-stories (31.1%) in August 2012. This corresponded with commentary on the Fair Work Australia and manufacturing reviews and strikes at BlueScope Steel, Volgren, Forgacs and ongoing tension with the Grocon development in Melbourne.

WH&S (Work Health & Safety) was another leading indicator, finishing as the second leading indicator six-times and in the top-3 on eight occasions. With all the emphasis on safety within Australia it’s often forgotten how dangerous a lot of manual, repetitive manufacturing work is. During the FY 2012-2013 period there were 1,302 deaths and 954 injuries reported including seven deaths in Australia. The most notable (and horrific) was the collapse of the Bangladeshi factory which killed at least 1,129.

Positive/Negative Index

3 - Manufacturing_PosNegIndex_2012~2013

The next chart is a 12-month look at 15 manufacturing related workforce planning categories and their positive or negative weighting.

Employment was the most negative sentiment for FY 2012-2013. Officially the decrease in manufacturing employment was just negative 0.3% for the period Feb 2012 – Feb 2013 and negative 1.6% over the past two years. The sentiment of stories that I’ve reviewed and the recorded job losses against job gains both paint a slightly darker picture.

On a more positive note L&D/R&D, which measures both Learning & Development and Research & Development indicators was the most consistently positive with 59-stories and a monthly content average of 10% it had the highest sentiment on seven occasions. One of the positive themes behind Australian manufacturing is that although it is under immense pressure there is a lot of good news in terms of adjusting the workforce for its new challenges and in developing new solutions for modern manufacturing. It probably should also be noted that I state ‘good news’ in terms of L&D/R&D outcomes rather than ‘effective news’, a much more difficult proposition.

Engagement, which looks at everything from engagement at the worksite through to industry engagement to promote employment had the highest sentiment reading for FY 2012/2013 with a +9 recorded in May 2013. This corresponded with the National Manufacturers Week and the Endeavour Awards and is a good indicator that these two events raise awareness of manufacturing.

Manufacturing Employment Gains & Losses

4 - Manufacturing_Employment_2012~2013_130830

The following table looks at the reported employment gains and losses. Reported job losses are actuals as reported by manufacturing industry sources but often do not reflect the total loss of employment as some companies choose to limit the amount of information in relation to redundancies. Employment gains are forecast only. . Often employment gains are overstated as they link to public relations exercises.

For every forecast job announced in manufacturing for the period July 2012 through to June 2013 there were approximately 9-times the amount reported lost.

A bellwether story for manufacturing over the past year is the Gladstone’s Boulder Steel project. Announced with great fanfare in November 2012 forecasting 3,800 jobs (2,000 construction plus 1,800 operational FTE’s) it was quietly shelved when the company went into administration just eight months later.

Final Thoughts

The overall theme behind FY 2012-2013 has been one of continued slow atrophy.

The biggest development of the year, that of Boulder Steel was announced and shelved within a couple of quarters even as the Australian dollar came down of a very long high. This was a big story and a ‘nothing ventured, nothing gained’ outcome.

Outside of Boral which cut more than 1,000 during the FY and Ford which will close down in 2016 with the loss of 1,200 FTE positions most companies reported losses in the scores and hundreds. All of this added up to a number greater than 11,600 and that’s just the reported count, not all the SME’s who are quietly cutting in the background out of the public eye.

I’ve talked and written often on peak employment but when it comes to manufacturing in Australia that is a moot argument (especially given the peak period of Australian manufacturing was four decades past us).

As Q1 FY 2013-2014 starts off with an election and an ideological battle between political parties over the fate of automotive manufacturing in Australia the real question will be where will be floor level of manufacturing employment be in Australia?

 

Acknowledgements: Although not the only sources utilised the Manufacturing Workforce Planning Scan’s primary data sources include Manufacturing Monthly and Business Spectator. If you are interested in other sector analysis my recent Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (July 2013).

Random Analytics: Egypt – A Workforce Planning View

Back in February 2011, at the height of the Arab Spring, I wrote a blog about Egypt which received a lot of criticism at the time.

With the passage of time however it seems that my worst fears are now becoming reality.

Here is the original piece (20 Feb 2011) titled Egypt: It’s about the Economy and Work, not Democracy via HR.com.

I have a vivid memory of my final year at university.

I was giving a review on Dr Michel Aung-Thwin’s work “Parochial universalism, democracy Jihad and the orientalist image of Burma: The new evangelism” and was rounding up the argument that without security first democracy cannot work, especially in the Asian context. At the end of my presentation one of my fellow students jumped up from his seat and said forcefully that I had ‘crapped on the ideals of democracy and I was a disgrace to the university’. He subsequently stormed out of the lecture room without giving me a right of reply and I went on to get a high distinction in the subject.

Dr Michel Aung-Thwin argued that without economic and physical security you cannot have democracy, or at least a democracy that will last over the longer term.  His work in relation to Burma in the early part of the previous decade is relevant to the issues facing the Middle East and Northern Africa today.

The crisis gripping that region, commencing in Tunisia and Egypt but now impacting other states such as Libya, Yemen and Bahrain is more about the economy than it is about democracy.

Let’s consider the short-term economic implications for Egypt (and they are bleak):

In Egypt the population wants a rapid normalisation but after a month of protests, a significant loss of foreign income (reportedly $300M USD per day) and a military Junta in place, at least until September this is unlikely. A week after the democracy protests ended there are now protests in relation to pay and conditions and many of the key elements of the economy are closed, including financial institutions and many businesses. The Global Financial Crisis has hit Egypt hard and rising inflation, especially rising food prices are hurting the poorest first.

However, the long-term Workforce Planning implications for Egypt and the region are bleaker:

The median age (that is the age at which half the population is older and half is younger) for the West is approximately 40 (Australia has a median age of 36.9 while in Japan that rises to 44.6). Due to a 3 – 4% population growth in the Middle East and North Africa the median age is much lower. In Tunisia that corresponds to 29, Egypt 24, the West Bank and Gaza 20 and in Yemen just 17.  In Saudi Arabia, a rich country that imports most of its working population from the poorest regions of the world around 70% of the population is sub-30.

In Egypt 80% of the population with an age of 29 or less are unemployed. Gender disparity, an issue common to the region is also worrying with only 18% of women out of university finding employment, while for men the rate is 50%.

Recently the International Labour Organisations estimated that the Middle East and North Africa region alone would require 100,000,000 million new jobs to fulfil the requirements of the new entries coming into the system by 2020!

Workforce Development is also an issue. Egypt has an education system which is poorly staffed (teachers in the Middle East are poorly remunerated and trained), poorly maintained with aging infrastructure and legacy curricula but heavily attended. For those who can afford to get a university education in Egypt they then have issues finding employment. Dr Hassan Hakimian, the Director of the London Middle East Institute recently discussed the fact that is takes a university graduate up to 15-years on average to enter the state or public sector.

If you consider this from a Workforce Planning perspective then someone who has worked in a sector or industry for 15 to 20-years in the West would be considered mid-career and perhaps looking to move on to something else or moving up into a higher level of management. In the Middle East and North Africa it may just take this long to get into the system and this will have ‘lag-effect’ issues. One obvious ‘lag-effect’ will be the best and brightest in Egypt and other parts of the region will look to the West for employment opportunities. Why wait until 2026 for a job?

Egypt has a long history of expelling Pharaoh’s from power that couldn’t provide sustainable conditions for the population. Mubarak and his aging cohorts in Egypt are just another dictatorial link in that chain.  The challenge, initially for the Junta but over the longer term for any democratically elected government in Egypt will be to normalise the economy and to get people working again.

If they don’t then the issues facing the region will be far graver than what we are currently witnessing.

As confronting as these statistics are the data has not improved over the past 30-months.

There is no doubt that the Egyptian military (a significant business entity in its own right), followed by the  democratically elected government of Mohamed Morsi and in recent months the interim government post overthrow have not been up to the challenge of improving the economy and getting Egyptians working again.

To emphasise this point here is a look at the official Egyptian unemployment data since 2007.

1 - EgyptianUnemployment_130815

It should be noted that the Central Agency for Public Mobilization & Statistics only counts those ‘individuals who are actively looking for a job but cannot find work’. Given the facts that I presented in early 2011 I would guess that the participation rate in Egypt is staggeringly high, yet official movements in unemployment are still very good indicators of the health on any economy.

I’m not a country specific specialist (outside of Australia of course) but I am a Workforce Planning specialist and the facts that I stated in 2011 have not changed. In fact I would suggest with the continued political instability the situation that I described back then with a further 1.5-million Egyptians looking for work and unable to find it is now worse.

With the very real possibility of Egypt on the brink of large scale violence, even civil war the situation is no longer just grave.

It’s a disaster.