Accenture Staking a Claim

Staking a claimFour talent management strategies for high performance in the mining industry Accenture offers four distinctive strategies for mining companies to adopt: • Differentiated employee value propositions • Retention through engagement • Collaboration and processes to develop and diversify talent • Automation and technology to optimize available talent 2 . mining companies worldwide are grappling with a significant challenge: How and where can they get the talent they need today to provide the infrastructure-building resources for tomorrow? Developing effective and exciting talent management strategies will help the industry deliver results today. as well as lay a foundation for outperforming the competition in the long run.Summary Faced with unprecedented demographic shifts and booming demand in an increasingly competitive global market. Based on our talent management framework. Figure 1.aspx. 2007. To begin managing the talent crisis. The growing scarcity of talent is easily the most important challenge facing industry leaders trying to making their organizations “change-capable. www. Thomas.Introduction Mining companies around the world see their markets.com/us-en/pages/insight-talent-powered-organization. Accenture’s talent management framework. 3 . “The Talent Powered Organization: Strategies for Globalization. Peter. Craig. ever-increasing operating costs.” The hard question before them: How and where can they get the talent today and tomorrow to meet the ever-growing demand for resources and achieve high performance?1 Talent management capabilities lead the list of factors critical for achieving high performance. right time Develop talent potential Workforce Business performance results results Workforce innovation Source: Cheese. Accenture research has found that six trends will define and characterize the industry in the current decade. Accenture’s talent management framework (see Figure 1) states that companies need to act now to mitigate immediate and longer-term risks by: • Defining their talent needs. attract and retain talent Business strategy Workforce talent strategy Define talent needs Deploy talent at right place. increasing focus on sustainability and environmental concerns. • Building robust capabilities to manage and deploy talent. Talent Management and High Performance. scarce managerial and technical talent. customers and operations poised for a series of remarkable structural changes.. growing competition for mineral resources and risks associated with extraction. Robert J. These trends are: the rise of emerging markets and their ever-growing appetite for resources. • Developing and retaining critical talent.accenture. and increasing market liquidity and price volatility. • Discovering and attracting new talent.” London: Kogan Page. mining companies need to develop talent management strategies governed by a talent management framework aligned to the business strategy and geared to achieving business results. Elizabeth. each more challenging than the other. Business workforce alliance Discover. Resources rush intensifies the talent crunch 4 . mining major Rio Tinto is now flying in people every week from urban locations more than 200 kilometers away and offering lucrative incentives.5 billion) • ArcelorMittal (iron ore.2020).2 Most of the demand is coming from fast-growing emerging markets such as China and India.6 billion and nickel. Mining investment map (current and projected. energy. $3. $1.990. $2.3 Skills shortages have hit businesses around the globe.5 Filling these positions is becoming tougher for various reasons.9 billion) • Anglo American (iron ore.8 billion) • NML (iron ore.9 Such short-term moves. will need to be replaced by innovative strategies if mining companies are to build and maximize their talent power. © Engineering and Mining Journal. $1. especially coal. $3. Survey data source: Raw Materials Group.$10 billion $10 billion . while the net new talent requirement for the Canadian mining industry is 99. $4.5 billion) • Strike Res (iron ore. $2. 2010 . Figure 2. stressful and demanding work atmosphere.5 billion) • BHP Billiton (iron ore.7 billion) • Western Copper (gold.A talent crunch across all categories of the workforce has undermined the vigorous efforts by mining companies worldwide to expand supply to meet booming demand (see Figure 2). $2. $1.5 billion each and one project of $2 billion) • Vale (nickel. $3. 2011. Employment in mining in Australia is expected to decline by 14 percent through the year 2018. mining as a career is rapidly losing its charm among those entering the workforce.4 billion) • Citic Pacific (iron ore.3 billion and $1. $3.8 As the career aspirations of younger generations include a desire for greater work-life balance.6 billion) • Matachewan (iron ore. China. in particular.less than $2 billion $2 billion . transport and construction sectors are booming to meet urbanization and infrastructure needs. Canada. Stockholm. mining jobs frequently do not make the cut.4 Mining employs approximately 200. To keep their talent.8 billion and $2. working with heavy equipment.6 billion) • Nobel Group (iron ore. respectively—a mining career has several drawbacks: remote locations. globe-trotting and more freedom of choice. For generations X and Y—those born between 1961–1981 and after 1982. Newmont Mining (gold. two projects of $2.$20 billion $20 billion . Between now and 2020. $1.2 billion.6 percent of the total workforce—with a median worker age of 40 years. such as week-long breaks and four-and-a-half-month parental leave. has been investing heavily in strategic resource-rich areas—upwards of $50 billion in 2010. $2. $3.7 Worse.3 billion) • Chinalco (copper. among other benefits.000 people in Australia—about 1.7 billion) • Metals X (nickel. according to one estimate—the bulk of it in Australia.8 billion) • NovaGold.1 billion) • Gladstone (nickel. $2. 5 . investments worth close to $278 billion have been lined up in response to the surge in demand for commodities. where the steel. The need for a more fulfilling career is felt by existing mining professionals as well. $2.$50 billion • Vale (iron ore. Mining Media International.000 people. Teck (copper.3 billion) • Rio Tinto plc (copper. found mining the least “familiar” among 12 leading professions despite the huge salaries offered.1 billion) • Buenaventure. $1. and environmental concerns. Teck (gold. A 2010 employers’ survey by the Mining Industry Human Resources Council (MiHR).1 billion) • Copper Fox. $11. iron ore. the Minerals Council of Australia estimates an additional talent need of 86.8 billion) • Glencore (nickel. Retirement is a looming crisis with upward of 53 percent of current workers in Australia older than 40 years of age. $2. Already. around 33 percent of mining workers are ready to retire in the next five years.9 billion) • Cardero (iron ore.5 billion) Source: E&MJ’S Annual Survey of Global Mining Investments (2010). $1. who leave because they do not want to work in remote locations and want to seek better career development and training opportunities. however.7 billion) • Seabridge (gold. long hours away from family. but mining companies are finding the situation particularly challenging. steel and aluminum. $3. Legend (based on investment values in US dollars) Less than $500 million $500 million . $4.6 In Canada.8 billion and $2. Four innovative strategies for talent management 6 . to increase organization appeal to their diverse. To meet the current and future demand for resources and achieve high performance. the core of an employer brand. Generation 1. mining companies must dramatically improve their talent management capabilities. 2. customizing an EVP can be done only after the organization has an accurate and comprehensive understanding of its workforce and decides the values it places on rewards. The customization of the EVP is achieved by workforce segmentation. Strategy No. opportunity. Put simply. work. combining the intangible with the tangible. and the organization itself. shortage of qualified workers and talent-driven competitive advantages. is the set of attributes that prospective employees perceive as the value they gain from employment in an organization. To attract talent. Geography 3. particular local or demographical nuances. The employee value proposition (EVP). graduate pay for technical engineers in the mining. or even by generation and work role—and on the basis of an understanding of their real motivations Figure 3. Mining companies need to define and tailor their EVP. a single EVP will not be enough. Demographic Employee value proposition 7 . An EVP is ideally constructed around five key areas: rewards. 1 Offer a differentiated employee value proposition The worsening talent shortage has meant that over the past two decades. Job vacancies in the mining. from 4. demanding potential workforce.13 Workforce segmentation implies separating employees into meaningful groups based on their cultural and generational values and differences.100 in August 2010. then they will be more satisfied and stay on with the company.100 in November 2009. Pursuing innovative talent management strategies in the following four areas can help them gain a people-competitive advantage. people and organization.10 Mining companies pay 66 percent more than the industry average in Canada as well. oil and gas sector in Australia have risen 73 percent. EVP is the “get” versus the “give”—if the employees feel what they are getting equals or exceeds what they give.12 However. opportunity. mining companies around the world have focused on competitive compensation packages to drive talent and organization performance. Clearly then. Tailoring an employee value proposition in the mining industry. people. oil and gas sectors have similarly climbed 38 percent between 2005 and 2009. to 7. employ workers across different generations and require a local workforce. focusing on remuneration alone will not be enough in an era of growing diversity. work.11 These sharp salary hikes have failed to check attrition or draw in new talent. which span multiple geographic locations.Accenture defines talent management as the ability to create and continuously optimize the talent resources needed to execute business strategies. For mining companies. client relationships and organizational know-how. Companies are against bearing the cost of developing talent for the benefit of their competitors but. Mining companies can use the same tactic to address the crucial shortage of managerial and technical talent—by not only enhancing the career experience 8 . found that organizations can strengthen their executives’ intentions to stay by equipping them to leave. winning processes and efficiencies. customizing on the basis of generation will work to attract younger talent into mining.17 In other words. and duplicate. they take with them valuable process and network knowledge. mining EVP customization can also be conducted by gender and educational level for targeting harder-to-reach demographics such as women—who currently make up only 13 percent of the mining workforce in Australia.16 Recruitment and retention strategies that focus only on a competitive compensation and incentive package are outdated. An Accenture global study of managers and executives. three factors are increasingly important in segmenting workforce and customizing EVP: geography. they want to hang on to their best people.14 For mining companies. Since people of the same generation tend to have common work styles and similar expectations of work. Lastly. this transfer of knowledge. According to research by the Corporate Executive Board’s Corporate Leadership Council. more importantly. for instance—students. relationships and know-how can quickly diminish a company’s competitive advantage. 2 Focus on engagement for retention While money may bring in employees. Generational attributes are a close second. retaining them will require much more than monetary incentives. When skilled employees leave. because other companies learn from. the best way to help ensure that critical talent does not leave is by providing career experiences and opportunities that truly enhance their value and employability in the external labor market and keep them engaged in their current company. and the indigenous community. generation and demographics (see Figure 3). But aligning and motivating people will enable organizations to multiply talent and improve their performance. As mining employees frequently migrate from one operation and company to another. geographic differences account for 72 percent of the variation—the greatest component—in EVP preferences across all industries.and needs. Strategy No. operating in a global economy has meant location is increasingly important in tailoring attraction strategies. conducted with the Wharton School of Business.15 For mining companies as well. Up to 60 percent of executives surveyed in the AccentureWharton study said the following practices were the most effective in increasing employee engagement:19 • Working on challenging tasks • Taking on responsibility • Building a professional reputation • Developing diverse competencies • Accumulating marketable skills • Expanding professional network To improve engagement. mining companies should focus largely on two areas: • Design jobs and work processes to provide more meaningful work and challenging assignments. The most important drivers for raising employee engagement are also practices that make core talent stay (Figure 4). enabling potential stepups to gain the skills and experience required to fill such roles.18 Employee engagement is a measure of the emotional and intellectual commitment an employee has to the organization and its success. Rio Tinto. one of the big five companies in mining. A retention-focused employee engagement model. • Provide meaningful career development opportunities through effective workforce planning and honest communication in performance management and feedback systems. engagement is the mystery ingredient that can transform business performance. which in turn is balanced with business needs (see sidebar on page 10). Aligning work demands and performance expectations with employees' personal work preferences is another route to engagement and high performance. Studies show companies with high engagement also manage to achieve greater business performance. focuses on people development shaped by the employees themselves. Thus. Most important drivers Work Opportunities Reward and Benefits Retention Strength of driver Direct Management Organization and Leadership 9 . combined with flexible scheduling of work and work-life balance. Figure 4.and opportunities of those already positioned in these roles but. at the same time. gender or sexual orientation. has the potential to drive up engagement and satisfaction across a wide base of employees. They provide employees with an environment that is dynamic and rich in experiences. 3 Use collaboration and new processes to attract and source diverse talent For mining companies. This can reduce the costs of fly in/fly out models as well as achieve economies of specialist skills. knowledge management and learning. integrated information management systems is an effective method to simplify and standardize business processes and allow for common reporting across processes and geographies. Top mining companies are currently using leading practices for sales and distribution. to recruit from local and indigenous communities. Deploying these systems has shown to lead to an increased degree of cohesion and creates a common language which “glues” disparate mine sites into a whole. expertise and skills. Companies can tap alternative talent sources by designing and targeting attraction strategies at women. Other information technologies provide an opportunity for miners to improve employee engagement: functionality. Rio Tinto has also been rated as an employer of choice for women in Australia. all supported by enterprise resource planning (ERP) Case study Rio Tinto 20 Aggressively pursuing a global growth agenda. while exploring their own career opportunities at the same time. global rotation of top talent is a win-win 10 for an employee and for Rio Tinto.” This focus is not only about enhancing retention. diversity means much more than ethnicity.” At Rio Tinto.” recognizing that “our people want more than money. creativity and innovation. students who have completed school and are looking for work. with an employee developing and shaping his/her career through a new and challenging work experience while Rio Tinto improves its bottom line. such portals promote efficiency. In today’s multi-polar world. Oz Minerals (Prominent Hill) collaborated with New South Wales Technical and Further Education Commission (TAFE NSW). the company focuses on providing their employees with “challenging work and development. Information integration The use of common. Rio Tinto is moving toward a revised “Employee Value Commitment. Flexible working arrangements and childcare access at remote sites are strategies that Rio Tinto is using to tap into a larger talent pool. as well as lowering costs of computing power and bandwidth. provide miners with an opportunity to organize employees in remote operating centers or competence centers where employees physically working in the same location are responsible for activities in multiple sites. but also seeks to heighten employee commitment. teaming. and the indigenous community. and collaborate to create a talent pipeline. Remote operations Maturing technologies. For instance. Next-generation workplace portals designed explicitly around a worker’s role are ideal for collaboration.” Instead. . providing training in forklift and truck driving and permanent employment following training. maintenance and group functions such as finance and human resources. By connecting. global lead of Organizational Development. This helps ensure that women are included in a nondiscriminating work environment that allows them to balance their multiple roles. Rio Tinto has been focusing on talent management as a key driver of sustainable growth. production planning.Strategy No. in Australia. According to Mike Ryan. if accompanied by a delegation of decision making (within the common framework). Deploying these common platforms. sharing knowledge and learning. while sharing knowledge. acquiring a diverse talent base can be their biggest asset and a critical competitive advantage. For example. paying people to keep them is becoming “outdated. a scarce talent. Strategy No. such as use of autonomous equipment and three-dimensional (3-D) modeling applications. has already brought about more streamlined operations and reduced talent needs in the areas of ore extraction and safety. Automated mining equipment operates via a programmed routine or is centrally controlled. • Improves operational safety. Miners can: • Liaise with schools and develop campaigns to encourage school students to embark on trade apprenticeships. 4 Optimize talent needs through innovative technology Recent advances have made it possible for mining companies to harness technology to alleviate the burden of “skill crunch. Catching workers early Partnering with educational institutions is an ideal way to use collaboration to mine and develop talent as well as to build a talent pipeline. • Deploy new learning technologies and collaboration tools for wider access and faster up-skilling. • Create learning curricula with continuous review of qualifications and proficiency. Application of technologies. will have a competitive advantage. • Launch accelerated apprenticeships for experienced workers without a trade or for employees from other industries with transferrable skills. • Partner with universities to create more education. through remote operation. • Use competency frameworks for hard skills (process/technology) and soft skills (business acumen). 11 . Autonomous equipment This equipment does not require a person to be physically present to control its operation. Mining companies that are able to leverage existing skills and focus on emerging technology skills within the enterprise. • Announce “bonded scholarships” to attract apprentices and university students—financial incentives during study or training in return for working in the industry for some time after graduating. Some proven practices include: • Focus on both function and business process. as common errors due to operator fatigue or incorrect judgments that lead to accidents are minimized. Similar improvements can transform operations in other areas as well. professional development and research opportunities. with only a few people overseeing the operation. which in turn promotes excellence in overall mine operations.” at least in the short term. Three clear benefits emerge from increasing the use of such equipment: • Minimizes the need for heavy equipment operators. by continuously developing their employees.Sustainable development of skills Developing the required technology skills and capabilities of the workforce will be a key differentiator. the requirement for personnel to spend extended periods of time in remote and high-risk work areas. • Minimizes. and reduces wage bills. are among the top factors affecting industry growth. as they adapt to a changing business environment. new cultures and multiple locations. This will help them become talent multipliers. in combination with high turnover rates. new risks. mining companies will require the best and brightest talent as never before.Conclusion Mining companies acknowledge that the shortage of skilled workers. increase the pace and flexibility of operations and. new processes. ultimately. either by stopping or delaying projects. embracing new players. Yet. 12 . or by significantly adding to the cost of new projects. achieve high performance. Mining companies should adopt these four distinctive talent strategies and align them with overall goals and strategic direction. analah. Hodnebo is a consultant with Accenture Management Consulting and specializes in human resources and talent management in the resources industries. Simon works in human resources and talent management projects specializing in the metals and mining [email protected]@accenture.com Analah Fawcett is a consultant with Accenture Management Consulting.About the authors James Arnott is an executive director in the Accenture Resources operating group and is aligned to Talent & Organization Performance. chemicals and energy industries and has a deep understanding of the strategic issues pertaining to transformation and restructuring of these industries.com Stian H. james.h.wienke@accenture. simon. aligned to Talent & Organization Performance. aligned with Talent & Organization Performance.com Helga Aranda is a consultant with Accenture Management Consulting. helga. [email protected] Ross Harrison is a consultant within Accenture’s systems integration group. He is also the lead for the Accenture Resources Talent & Organization Performance team.aranda@accenture. James has extensive experience in the electricity.com Simon Wienke is a consultant with Accenture Management Consulting.com 13 .arnott@accenture. aligned to Systems IntegrationSAP. stian. Ross has spent three years working in the plant maintenance and material management fields for clients operating in the steel and oil industries. Analah has worked on change management assignments related to SAP implementations for large global mining companies. Helga has more than five years of experience in a number of roles for resources and government clients and specializes in change management. specifically in business readiness and change enablement activities. aligned with Talent & Organization Performance. accenture. Accenture analysis. Department of Education. Ibid. Australian Government. Thomas. Talent Management and High Performance." Engineering & Mining Journal. © 2011 Australian Broadcasting Corporation.aspx..aspx. Elizabeth. gov. 2008.accenture. 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Chi T. “The New Organizational Career: Too Important to Be Left to HR?” Accenture Institute of High Performance Business.” Accenture Institute of High Performance Business. and Bobulsky. Equip Them to Leave. ACC11-0476 / 11-3406 . its logo. Accenture.6 billion for the fiscal year ended Aug. 31. certainty and strategic agility. Process & Innovation Performance. The company generated net revenues of US$21. and extensive research on the world’s most successful companies. Accenture collaborates with clients to help them become high-performance businesses and governments. leadership. technology services and outsourcing company. comprehensive capabilities across all industries and business functions.com. Accenture Talent & Organization Performance consulting services help clients increase their HR. 2010. Accenture Management Consulting helps clients move from issue to outcome. with pace.000 people serving clients in more than 120 countries.accenture. Risk Management. About Accenture Accenture is a global management consulting. We enable companies and governments to achieve high performance by combining broad and deep industry and functional offerings and capabilities across seven service lines: Customer Relationship Management. talent.About Accenture Management Consulting Accenture is a leading provider of management consulting services worldwide. Copyright © 2011 Accenture All rights reserved. Talent & Organization Performance. with more than 223. Combining unparalleled experience. and High Performance Delivered are trademarks of Accenture. Drawing on the extensive experience of its 13. culture and organizational capabilities to manage change and improve performance. Its home page is www. Strategy. Finance & Performance Management.000 management consultants globally. and Supply Chain Management.