Random Analytica

Random thoughts, charts, infographics & analysis. Not in that order

Tag: Workforce Planning

Random Analytics: Peak Employment (Part I): Australia

One of the great aspects of research is that it often takes you in unexpected directions.

Over the past two months and previously in 2010 I conducted a series of hands-on research assignments in the area of contingent staffing. Although my current contingent research assignment has not completed (it has at least another two months to go) I started to delve into the macro level data and have made some interesting discoveries.

It has also got me thinking seriously about the following question which was not related to contingent staffing analysis.

When will Australia reach ‘Peak Jobs’?

First of all, let me explain what ‘Peak Jobs’ means.

In simple terms (via the blogosphere) ‘Peak Jobs’ is the idea that technology is replacing jobs faster than it’s creating them. For those more technically inclined it can also be attributed to the finalisation of the increased growth in average output (and income) per labour unit due to technological change since the 1820’s as put forward by Robert Solow. For another take on this subject the ABC’s online business reporter Michael Janda recently did a piece on Australia’s peak participation rate (it’s an excellent piece, however I am not a big fan of participation rate analytics, as it’s a data input which hides many sins but more on that in later articles).

Unless there is a major catastrophe and given that Australia’s population will increase significantly toward 2050 I am not going to go on the record today and say that Australia has reached the upper limit of its ability to employ more people. I will go on the record and say that within the next decade Australia will reach that number.

To commence the first in potentially many blogs about this subject here are some analytics.

1 - FTE & PTE Employment 1978-2013

Figure 1: Australian Full-Time and Part-Time Employment (Feb 1978 – Jan 2013). Source: ABS.

In the first graph I wanted to highlight the almost identical increase in contingent (part-time) employment over the past 25-years. Since February 1978 full-time employment has increased by 59.2% (3.016-million) while part-time employment increased by a massive 276.4% (2.520-million).

2 - FTE & PTE Employment Increases 1978-2013

Figure 2: Increases in Australian Full-Time and Part-Time Employment (Feb 1978 – Jan 2013). Source: ABS.

To emphasise the almost identical nature of full and part-time employment creation here is a look at the increases in both employment types since 1978. Notice the big drops in full-time employment from 1982/1983 and 1990/1991 (the last recessionary periods in Australian history) and the steady, almost linear growth of part-time employment during the past two and a half decades.

3 - Employment vs. Working Age Labour Force 1978-2013

Figure 3: Overall Employment versus Working Age Labour Force (Feb 1978 – Jan 2013). Source: ABS.

Using a similar representation I wanted to finalise the graphs with a look at the differential between total employment creation and the working age labour force. Australia has created an additional 5.536-million new full and part-time jobs, from 6.010-million in February 1978 to a record 11.546.7-million jobs as of January 2013. Contrary to populist belief the working age population of Australia has steadily increased since 1978 (due to a combination of higher than replacement fertility rates plus immigration), effectively outpacing employment creation by 2,400,000.

Two quick points in relation to the above. Firstly, to avoid wonkish angst it should be noted that my Working Age Labour Force number in this graphic has been worked out utilising the ABS participation rate data rather than my preferred method of using actual population statistics (you can see an example of this in my 2012 Abbott’s Promise piece). Secondly, although not included in the above graph from 2018 the Australian labour force grows by approximately 475,000 as the working age officially increases to 67 (as at 2011 there were 507,252 people between the age of 59 and 60 who will be 66 and 67 in 2018 and I’ve factored in a high mortality rate of approx. 6%).

In conclusion the start of my ‘Peak Jobs’ discussion is focussed on the increasing use of contingent labour in the Australian economy and a widening gap between growth in employment and the working age population. As shown in the data there is an undeniable trend over the past two and a half decades in terms to utilise part-time labour solutions rather than traditional full-time employment. In fact in 1978 the ratio of PTE to FTE jobs was 1:5.6 but this has decreased to just 1:2.4. It would only take another recessionary period to decrease this ratio further as demonstrated in the loss of FTE during previous downturns.

With an increasing working age population and a growing gap between jobs available the future is looking anything but certain, especially with the rise of labour augmentation and robotics replacing jobs quicker than they can be created.

In part two of this series I’ll be looking at similar data from comparable countries to see if the shift to part-time employment and potentially peak employment is a global phenomena.

Update 1 (25/02/2013): Initially this blog was going to be a series about Australian Peak Employment issues. However, given some excellent feedback and interest I’ve decided to look at other countries to see if this is a global issue (which I believe it is). For consistency, I have amended the original blog name from Australian Peak Employment (Part I) to Peak Employment (Part I): Australia.

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.

1 - Mining_WFPScan_Jan2013 - UPDATED

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.

2 - Mining_PosNegIndex_Jan2013 - UPDATED

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.

3 - Mining_Data_Jan2013 - UPDATED

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.

4 - Mining_WFPScan_Jan2012toJan2013

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.

5 - Mining_PosNegIndex_Jan2012toJan2013

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?

1 - Mining_WFPScan_Jan2013

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.

2 - Mining_PosNegIndex_Jan2013

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.

3 - Mining_Data_Jan2013

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.

4 - Mining_Employment_Jan2013

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: Manufacturing Workforce Planning Scan (Jan 2013)

The start of the New Year has brought fresh lows to the manufacturing sector with the month of January dominated by job losses, business suspensions and a lack of overall confidence.

1 - Manufacturing_WFPScan_Jan2013

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

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Figure 2: Australian Manufacturing Workforce Planning Positive/Negative Index 2012 (Jan 2013). Data sourced from Manufacturing Monthly Newsletter & News Archive. Some stories have been verified against primary resources.

The four most dominant Workforce Planning stories for January were Employ (47.4%), Engagement (13.2%), IR and WH&S (both of which finished on 10.5%). Engagement (+3) and L&D/R&D (+2) were the most positive while Employ (-12) and WH&S (-4) were the most negative.

The Employ category which tracks employment gains, losses and general sentiment overshadowed the news this month. At 47.4% this category made up almost half of the stories and as Table 1 shows there were 13-negative stories with a total loss 1304 jobs for only one gain of 200-jobs. The high negativity this month was also the worst that I have currently recorded although my data only goes back to July 2012. In terms of sentiment there does seem to be linkages to a slowing construction sector, evident by the largest job loss recorded for the month when Boral axed at least 700-employees after a 100-day review. On a positive note the Indigenous Footy Business hopes to train 200 indigenous Australian’s and take back at least half of the football business which has been dominated by cheaper imports.

Engagement, which includes items such as exhibitions and staff awards, came in as the second most discussed workforce planning item for January. Unsurprisingly it was also the most positive recording three stories, two of which originated from Victoria where the economy is heavily reliant on its manufacturing base and suffering as the sector atrophies.

Equal third most reported for January were IR which tracks industrial actions and WH&S (Work Health and Safety). Industrial relations can be a very dominant story and in August of last year recorded a high of one third of all workforce planning stories. In January IR only reached 10.5% mainly around commentary by union officials including the Australian Workers Union Paul Howes criticism of the Boral redundancy decision. WH&S tracks everything from safety innovations to workplace accidents. Although no major injuries were recorded for January there was at least one work related fatality when a 40-year old man was struck by lifting equipment at a Newcastle based manufacturing plant.

Here is a closer look at the January data.

3 - Manufacturing_Data_2012_Updated

Table 1: Data for Australian Manufacturing Workforce Planning Scan 2012 (Jan 2013). Data sourced from Manufacturing Monthly Newsletter & News Archive. Some stories have been verified against primary resources.

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

4 - Manufacturing_Unemployment_Jan2013

Table 2: Employment losses and gains 2013. Data sourced from Manufacturing Monthly Newsletter & News Archive. Some stories have been verified against primary resources.

In summary, the opening month of manufacturing news has been a continuation on last years theme of a sector still in decline, impacted by many factors but also an Australian dollar which remains stubbornly high (averaging around $1.04 – $1.05 for the month). What will be interesting will be how manufacturing positions itself now that an election has just been called (to be held later this year on the 14th September) and what impact further weakening of this sector might do to the unfolding story.

Update 1 (11/02/2013): During a data validation exercise I found that the stories being released via the Manufacturing Monthly eNewsletter, which I utilised as my primary source of data linkage, did not reflect the complete manufacturing coverage, thus Table 1 has been updated with an additional ‘Other’ article that was missed. As the Manufacturing Monthly news archive captures all the stories I will now be using that as my primary data source, although this will mean a 24-hour delay on Workforce Planning scan updates from February onwards.

Random Analytics: Wide Bay Burnett Regional Research

I’m very excited to announce two research studies for which I completed the analytics between June and December of last year on behalf of Regional Development Australia Wide Bay Burnett (RDA WBB) in my role as chair of the Workforce Planning Sub-Committee which provides supplementary advice, training, support and assistance in the areas of Workforce Planning, Workforce Development and Workforce Analytics.

JSMSFrontCover

The Workforce Development Jobs and Skills Matching Study 2013 was developed after nearly 1000 registered job seekers were surveyed in partnership with Wide Bay Burnett Job Services Australia (providers). The study utilised the data to identify key barriers and opportunities for the Region’s unemployed labour force.

WMSFrontCover

The Resource Sector Workforce Mobility Study 2013 is a look at the first 700 Resource Sector workers who undertook the IM4FIFO survey between August and December 2012. The study utilised the data to identify the key barriers and opportunities for the regions mobile workforce. Furthermore this research will establish effective long-term solutions for the Wide Bay Burnett’s existing workforce providing them with better work/life balance solutions while still addressing key industry issues of safety, fatigue management and staff turnover.

Analytics are only a small component of these projects and I have benefited from having worked very closely with two very outstanding individuals.

Grant Maclean, the RDA WBB Chairman has always had a vision for creating a step change for the Wide Bay Burnett region. His guidance and strategic vision has, in my view, made our region standout in terms of focussed outcomes. He has also been a fantastic guide as I had to carefully balance both operational and Board responsibilities for the latter half of 2012.

Although you won’t see his name on the reports, Paul Massingham, the Executive Officer of the RDA WBB has done an amazing job in the creation of these two documents and for my thinking deserves the bulk of the credit for these fantastic publications. In just six months, while managing a small but very capable team he was able to access an enormous amount of data, brief key stakeholders and build strong relationships with three levels of government, the community and industry. It was certainly a bonus for our recently appointed FIFO coordinator, Danielle Andreuzzi to have the data immediately available for the write up of the Resource Sector Workforce Mobility Study. Having worked on analytics (in one form or the other) for over a decade I must say my six months collaborating with Paul in an operational capacity were not only the most productive (I was able to produce more than 80 baseline info-graphics from which our staff can now build and scale) but one of the most enjoyable. Paul’s professionalism, subject matter knowledge, drive and pure energy allowed for quick turnarounds on my input with minimum repeats.

As stated above I think both these studies are fine pieces of Regional Workforce Planning research and if I would commend them to you.

 

 

If you need more information about either of these studies or about the IM4FIFO campaign then please contact Paul Massingham at:

Regional Development Australia Wide Bay Burnett

PO Box 1045, Hervey Bay, QLD, 4655 – Phone: 07 4125 9272 – Email: info@rdawidebayburnett.org.au – www.rdawidebayburnett.org.au

As an aside you can also view the IM4FIFO advertising campaign which was broadcast across the Wide Bay Burnett region after the Queensland Minister for Education, Training and Employment, the Hon. Mr John-Paul Langbroek launched the project officially on the 14th August 2012.

Random Analytics: Manufacturing Workforce Planning Scan (Jul – Dec 2012)

The two sectors of the Australian economy that will shape the nation in 2013 are mining and manufacturing. Although mining has come under intense pressure in the latter half of 2012 it still has an enormous foreign direct investment (FDI) pipeline and is the envy of the world, especially the US and the European countries that have been battered by the Global Financial Crisis (or the North Atlantic Financial Crisis as I prefer to call it). On the other side of the coin is manufacturing which according to the ABS employed 935,897 people (correct as at end June 2011), although that number has been in decline for some years and it would be lower today and if you believe the data I’m about to present. The US Bureau of Labour Statistics (BLS) recently reported we have the worst manufacturing productivity amongst the most developed nations.

Australia has significant challenges ahead of it this year and these two sectors, so crucial to the economy but at opposite ends of the spectrum are worth close attention and scrutiny.

Since September 2012 I have been publishing Workforce Planning scans of the Mining industry which has assisted me in thinking ‘Big Picture’ about that sector, with all of its opportunities and liabilities. Over the Christmas break I have been busy looking at Manufacturing Monthly stories between July and December 2012 to get a sense about that sector and its Workforce Planning issues. Given more time I would like to add a second source of qualitative data to create more robust quantitative information but time doesn’t permit at this stage.

Building on my 2012 Mining scans I’ve created two new graphs and added a positive/negative column in the raw data. The first additional graph is a simple Positive/Negative index to show the relevant subject by its ratio of good and bad news stories. The second is a table which outlines job losses and job gains. Unlike most work in this area I’ve detailed the jobs gained by the year they are expected to occur. For manufacturing I’ve added two sector specific categories, that of ImportSub (Import Substitution) to capture employment gained or lost through CAPEX, factors of production and dumping then included AusMade where the Australian brand helps or hinders Workforce Planning issues.

So, here is the first Australian Manufacturing Workforce Planning Scan looking at the period July to December 2012.

1 - Manufacturing_WFPScan_2012

Figure 1: Australian Manufacturing Workforce Planning Scan 2012 (Jul-Dec). Data sourced from Manufacturing Monthly Newsletter & News Archive. Some stories have been verified against primary resources.

Like Mining the weight of stories was predominately employment (and most of it negative but more on that later). Unlike Mining there was one month where Industrial Relations dominated the discussion, although you get a sense looking at the stories that the union movement is limited in their capacity to take more direct action, thus they make up the numbers by increased debate.

The other really interesting data that came out of this research is the lack of softer HR stories which permeate through the last half of 2012. In fact there were NO STORIES on Work-Life Fit (aka Work Life Balance) and Skills Shortages and only one story on Diversity! You just know a sector is in trouble when there is little or no talk around the ‘touchy-feely’ HR subjects.

2 - Manufacturing_PosNegIndex_2012

Figure 2: Australian Manufacturing Workforce Planning Positive/Negative Index 2012 (Jul-Dec). Data sourced from Manufacturing Monthly Newsletter & News Archive. Some stories have been verified against primary resources.

For every month the weight of negative employment stories was depressingly high. July was the only month where it seemed that factories closing down or going into administration might not feature but the loss of 440-jobs at Ford after the Australian government gave the company $103M AUD in an attempt to keep people employed.

On a more positive note Learning & Development/Research & Development stories averaged 10.3% for the six months and were generally positive or at worst (October) at least neutral. Although the sector might be in decline both the Australian and Victorian governments (where a lot of Australia’s manufacturing base is located) are not about to give up on it. Of the two negative L&D/R&D stories one was linked to MYEFO budget cuts to funding and the other, ominously was RMIT pulling out of its manufacturing program, when it seems all universities want to add mining related courses (traditionally a very low employer).

Here is a look at the data breakdowns.

3 - Manufacturing_Data_2012

Table 1: Data for Australian Manufacturing Workforce Planning Scan 2012 (Jul-Dec). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources.

As noted previously the lack of softer HR data stories was very interesting and something to keep following through 2013. Also of interest was the decrease in overall Workforce Planning stories as compared to mining which averaged 55.3% for 2012.

Last graph, looking at the employment losses and gains through to 2016 and beyond (although this will be more relevant to analysis of the Mining sector).

4 - Manufacturing_Unemployment_2012

Table 2: Employment losses and gains 2012 (Jul – Dec). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources.

Although on the face of it the jobs lost to those gained is 2.2:1 if you take out the projected gain of 1800 jobs in Gladstone Boulder Steel from 2014 the ratio increases to 7.1:1. Even worse, if you consider the jobs lost in the last half of 2012 to the jobs gained the ratio is an appalling 64.6:1! Obviously the data used here is not comprehensive but it does act as a good guide to how the industry is faring.

I’ll leave on a depressing note. As I finalise this piece Stephen Koukoulas, an Australian economist and former advisor to Prime Minister Julia Gillard just tweeted:

“I have changed my view on AUD. 1.20 or even 1.25 possible based on improving global news. Likely to be my Business Spectator column tomorrow”

He is not the first to mention an increased Australian dollar but he is now at least 5-cents higher than others discussing the subject. If manufacturing was suffering with the AUD at $1.05 then an even stronger dollar will mean very interesting times ahead.

Update 1 (10/01/2013): Stephen Koukoulas full 8th January 2013 Business Spectator article on the rise and rise of the Australian dollar (linked with his kind permission).

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.

2 - MiningWFPScanFinal12Data

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.

3 - MiningWFPScan2012Data

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.

4 - MiningWFPScanQ1_2009

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.

1 - QLDMiningEmploymentTotals

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.

2 - QLDMiningEmploymentPercentile

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.

1 - AusEmploy_Nov12

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!

2 - AusWorkingPop_2007~2011

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.

3 - Employ2PopRatio_Nov12

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.

MiningEnviroScanNov12

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%.