10
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World Coal
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July 2015
Industry View
Industry View
I
n a previous article for
World Coal
, my
colleague, Will Coetzer, wrote about the
demographic time bomb that is facing
the sector.
1
One of the key findings was
that only 1% of the respondents to our
survey considered the industry was well
prepared to close the leadership gap that
will occur as baby boomers retire.
That finding led us to commission a
short survey into staff turnover in the
industry. We focused on leaders and senior
mining professionals because those are the
levels in which we specialise and because
high turnover at the top tends to create a
ripple effect throughout the whole
organisation. The resulting report is the
report: ‘The Lost Leaders’.
2
A total of 459 senior mining
professionals responded to the survey and,
once again, the responses we received were
eye opening and should ring warning bells
for the sector. In short, staff turnover at the
most senior levels is high and, judging from
our respondents’ intentions, shows little
sign of slowing down.
We found site-based leaders were most
likely to have left their jobs in the previous
12 months. Three quarters of respondents
(76%) said one or more people in the top
five senior site-based roles had left in the
last 12 months; 16% had witnessed five
departures.
Organisations that had seen five leaders
leave had not necessarily experienced a
complete change in their leadership teams.
It is possible that the same role has been
vacated more than once in the same
12 month period. Equally, it is not unheard
of for miners to shed entire leadership
teams for reasons of economic necessity or
performance.
There is more stability among those in
corporate or headquarters-based roles
where 61% of respondents had seen one or
no leaders exit over the preceding
12 months.
Nevertheless, when a quarter of
respondents say they have seen three or
more corporate leaders leave in a 12 month
period, the trend cannot be ignored.
These figures include people who have
left of their own accord and those whose
contracts have been dismissed or made
redundant. Nevertheless, turnover at this
sort of level should cause concern
irrespective of the role. When it reaches
these levels for the top leadership positions,
the implications are significant.
Personal career intentions
More than half of the survey respondents
told us they would consider leaving their
current employer if the right job landed on
their desk today, while a further 13% said
they were already actively looking for a
new role.
That is two-thirds of our respondents
who said they were ready to move on – and
remember we are talking about people in
senior level roles here. In fact, only 10% of
the respondents said they had firm plans to
stay with their employer for another
12 months. Those in mining operations and
project development roles were more likely
than the average to say they wanted to
move on (72% and 70% respectively vs 65%
across the overall sample).
These figures should unsettle the
industry as they suggest depressed levels of
loyalty and engagement and potential for a
dearth of leadership talent in the future.
Lack of job security in the current role
and good old ambition are often the
triggers that make a leader want to move
on. I am convinced that another reason for
the surprisingly high figure is that because
many mining executives lost their roles in
downturn, they now consider the
‘psychological contract’ with their
employer – any employer – to be broken.
Amentality of self-preservation and
always looking out for the next
opportunity can prevail in those
circumstances.
Our report cites research from EY, which
criticised the “hire rapidly in the upswing
and shed excess resources in a downturn”
approach of some miners. Such an
approach not only alienates those directly
affected by that ‘shedding’, but also has an
off-putting effect on emerging talent
considering entering the industry. At the
same time, experienced leaders who have
lost their roles either take early retirement
or move into consultancy or a different
sector.
This double loss of seasoned and
emerging talent, EY argues, will create a
more intense – and consequently more
expensive – war for talent as the market
recovers.
Some firms, facing tremendously
difficult financial and operational
pressures, genuinely had no choice but to
let good people go. One of the key
recommendations from our report,
however, is that those firms that can afford
to do so should retain their top talent
throughout a downturn. This requires a
long-term perspective that takes in the
entire talent management cycle.
These results also emphasise the need
for a clear leadership succession strategy.
With our previous research report
suggesting fewer than one-seventh of
mining firms having one in place, I believe
the remainder need to start developing
such a strategy urgently.
References
1. COETZER, W., ‘ADemographic Time Bomb’,
World Coal
(February 2015), p. 12.
2. The report is available at:
.
stratum-international.com/lost-leaders-staff-
turnover
Author
John Larpent is the co-founder and director of
Stratum International.
LOST LEADERS – LOST POTENTIAL?
John Larpent, Stratum International, UK
