“Instead of complaining and bleating about a skills shortage, or just looking to Government for resolution of a major problem, our industry has to act," Coates said this week according to the Age.

Poaching between mining companies, suppliers and original equipment manufacturers (OEMs) within the coal industry has become a major problem. Hays engineering and technical senior consultant Nicholas Villa recently commented to International Longwall News that one of the major ramifications of this was “artificially high salaries being offered to those who aren't necessarily that experienced. In turn, unrealistic expectations are the result, with some graduates demanding unworkable packages".

Coates said the key to stopping poaching was through education and training of workers, where coal companies hired more apprentices, trained more workers and encouraged more graduates.

Macarthur chief Ken Talbot agreed that young people needed to be encouraged through the industry. He said this month at the Melbourne Mining Club that companies needed to achieve a balance between retaining older experienced people and still providing room to allow young people to come through.

“We need to encourage a culture where people are prepared to be innovative and if they don’t get every new idea right, it’s not career threatening. It’s important that we not only encourage innovation, but provide a safety net for our people,” Talbot said.

The severity of the skills shortage was recently highlighted in a survey of 1300 mining professionals, released at the end of 2005. The survey was conducted by the University of Queensland’s Centre for Social Responsibility in Mining and commissioned by Macquarie Research in partnership with AusIMM. (Click here for the full report)

Topics addressed included the extent and impact of skill shortages, workforce turnover, working lifestyles and job satisfaction, and likely future developments in the industry.

The survey found skills shortages were the single most important factor impacting on current operational profitability, identified as an issue by 68% of respondents. More than half also agreed that companies now have people performing in more senior roles without sufficient professional experience.

“The emerging picture shows a number of critical challenges on the horizon, with 73 percent of respondents agreeing that the skills shortage had left their company short-staffed, resulting in inexperienced or unsuitable candidates being called upon to fill more senior roles,” AusIMM said.

Disturbingly, the survey also found that whilst 9% of respondents intended to move out of the industry in the next two years, only 5% of respondents had moved into the industry during this same period. The rate of replacement is clearly unsustainable in a boom time. Moreover, a number of respondents felt uneasy about the closure of minerals related university courses given the current problem.

Workforce turnover was identified as the second most important issue. Substantial numbers of respondents agreed that, in the next two years, they were likely to move from their current workplace (55%) or change employer (39%). Of those likely to leave the industry in the next two years, about half were aged less than 50, indicating that intention to retire was not a key driver. Notably, 14% of respondents in the 25-29 age bracket said they were intending to leave.

Lifestyle factors play a key role when employees are considering job opportunities. Respondents identified maintaining work/life balance as the most important factor when considering job options, whereas just 5% cited the value of the remuneration package as the most important factor.

In the area of retention of professionals, the survey outcomes offer some guidance to minerals companies. Whilst on the whole, respondents were satisfied with the levels of professional development provided, around half of all respondents felt that their working lifestyle put pressure on forming and maintaining personal relationships.

Moreover, employees working fly-in, fly-out (FIFO) rosters were half as likely as residential employees to feel that their partner had a compatible lifestyle, AusIMM said.

“Given that the balance between work and home life was the highest rated consideration when choosing a job [remuneration came fifth], employers will need to get creative around meeting lifestyle needs. This will be the case for the 25-29 group, which were the most likely to leave industry apart from those past retirement age.”

Almost all (91%) of respondents agreed that insufficient investment in exploration was the biggest obstacle to the long-term future of the industry. The key short-term constraints to future growth identified were shortage of construction workers, shortages of equipment and the cost of construction materials.

“In a global industry there is no room for complacency in setting the incentives for new greenfields exploration,” AusIMM CEO Don Larkin said.

“If we are to hold on to our $120 billion a year export industry we must act to address capacity constraints today.”

Macquarie Research said while the survey supported its bullish view for commodity markets, it was concerned the skills shortage would have a real impact on growth. (Click here for Macquarie’s full report)

“We believe a shortage of skilled workers, input cost increases, equipment shortages and infrastructure constraints will combine to limit the supply response. The survey suggests all of these supply-limiting issues are a factor, and have the real potential to slow capacity growth,” Macquarie said.

“We suggest the large diversified players [ie BHP and RIO] have the advantage given their global procurement systems, influence with suppliers, diversification, long life, high quality assets [ie job security] and the necessary scale to provide the desired professional development to staff.”