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Recruitment trends across the Chilean and South African mining markets

John Byrne, Managing Partner of Odgers Berndtson Chile, discusses the major recruitment trends playing out in the Chilean and South Africa mining markets

When it comes to attracting great leaders, the Chilean and South African mining industries face a unique set of challenges and opportunities. Both countries have been subject to socio-political and economic disruption, including regulatory hurdles, social unrest, pricing volatility, and of course, the pandemic. The mining markets in Chile and South Africa have weathered these storms in distinct ways, yet both share the same difficulties presented by broader cultural trends. Sustainability and the environment, inclusion and diversity, and gender pay and workforce parity have disrupted the global mining labour markets, effecting the recruitment of new leaders. Yet opportunities exist. Technology investment, the digitisation of operations, and the significance of both industries to their country’s economies are huge draws.

Chile remains the world’s copper powerhouse. Despite political disturbances in 2019, the effects of the pandemic, and volatile commodities prices, Chile has maintained solid output levels and mining investment. Government intervention, particularly the declaration that mines should remain open during the pandemic (due to mining forming 15 per cent of the nation’s GDP), has only added to the Chilean mining industry’s resilience to disruption. On top of this, the industry has been swift in adapting to Covid-19. Physical presence at mining sites was reduced and operations quickly transitioned to remote controls and autonomous mining. This was made possible by the technology investments in Chilean mines over the past five years and meant production levels remained stable, even with half the staff off most sites. All of this contributes to a healthy recruitment landscape within the Chilean mining industry, and it remains an attractive location for senior executives to work at.

Despite these merits, the industry is not immune to the effects of global cultural forces. Inclusion and diversity is a major issue for most mining companies and Chile’s are no exception. While ethnic diversity is respectable, gender diversity is poor and addressing this imbalance is a critical objective for Chilean mining companies. Talent at all levels is now looking for workplaces with strong diversity and factors this into their decision in choosing a company to work for. I&D will therefore be a decisive element in the Chilean mining market’s war for talent in the near and far future. The industry is competing for the best leaders on a global stage, against industries like financial services and technology. In order to compete effectively, it will need to take serious measures to improve its diversity metrics.  

Sustainability is a similar challenge. In Chile, environmental and sustainability issues tend to arise from conflicts with local communities, in addition to the carbon output and use of water that all mining faces. To overcome these problems, many companies are altering their community engagement approach from transactional handouts to more proactive and long-term strategies that are inclusive of the communities involved. And Chilean law means that in order to obtain a social licence to operate, companies must invest in the use of renewable energy sources and decrease their use of freshwater. Chilean mining companies are taking this seriously and data from copper commission Cochilo, indicates that renewable energy use in the country’s copper industry will grow to 49% of the power used by 2023. Efforts such as these will be central in attracting talent to the industry, particularly the next generation of leaders. Like I&D, sustainability credentials are a factor in a candidate’s choice of role and industry and Chilean mining companies will need to showcase their commitments to ESG, if they are to compete for leaders in the global arena.

Mining is of similar importance to the South African economy – contributing 8-10 per cent of its national GDP. It is a major industry for the nation and rising commodity prices combined with a weaker rand has led to higher export prices and stronger revenues. Yet poorly maintained infrastructure makes drawing minerals out of the ground a difficult process. Power outages across the country and the need for load shedding (scheduled blackouts one or more times a day for periods of two hours at a time) affect the production of large mining operations. What’s more, the majority of mines use diesel generators and diesel run equipment in a country which often suffers diesel supply shortages. This impacts mining output, and as a result, it also effects a company’s ability to attract leaders to its operations in the country. Executives can be put off by an environment in which being able to perform the job and deliver returns begins as an uphill battle. Especially when pay is linked to output, it can be challenging to recruit foreign executives to South African mines.

Other factors further complicate the recruitment of senior leaders from outside the country. Corruption within South Africa and a lack of government investment has had a knock-on effect on the planning of brownfield, mid-stream, and downstream mineral value chain projects. What’s more, the unpredictable regulatory environment can be a headache to navigate and can often become an obstacle to new mining operations. Compounding the issue for foreign executives is the focus on safety and security. The majority of companies are headquartered in Johannesburg and executives need to consider security around where they live and when commuting. The overall environment is therefore less attractive in comparison to other major mining countries such as the U.S., Australia, or Canada.

Herein lies the opportunity, however. Tier one mining companies in South Africa generally look for executive leaders outside of the country – typically they will want someone with global experience under their belt. Given the challenges of the South African industry, it means there is high demand for international mining leadership. What’s more, for those executives who can run operations and achieve growth in such an environment it is a strong proof-point for their leadership skills and is likely to open doors for them in the future. On the other hand, smaller mining companies tend to use home-grown talent. Again, herein lies an opportunity. Mining executives who do well locally, are able to use their experiences of overcoming the hurdles of the South African market as proof of expertise, which can lead to roles overseas. Indeed, many South African mining executives go on to be very successful elsewhere in the world.  

Other talent opportunities exist across both the Chilean and South African mining markets. Technology is a huge draw and many mining sites are swiftly becoming fully mechanized so that operations are done remotely and incorporate the latest digital technologies. Investment in construction technology and mining processes technology has been exceptional over the past decade. Accelerated by the needs of the pandemic, driverless transportation machinery and remote exploration devices are commonplace, while the use of drones to analyse land and pipeline health, and conduct rock prospecting is increasing rapidly. 3D modelling is also a huge part of pre-project planning, while AI-driven financial modelling and analytics are being used to present economic case studies for clients. These investments are significant for the attraction talent. The next generation of leaders expect technology solutions to simply be a part of their day-to-day – staying at the cutting edge of innovation should therefore be built into any mining company’s talent strategy. What’s more, it broadens the pool of potential candidates so that executives can be considered from outside of the mining industry – for example, from within technology and its related sectors.

The international mining market as a whole is grappling with disruption and volatility. Global and local forces are influencing the labour market at every level and attracting great talent, particularly great leaders, now requires a robust and forward-thinking talent strategy. However, the future is most certainly bright. Investment in innovation, technology, and R&D is not only helping mining to overcome many of its challenges, but it is making it an industry that future generations can be excited to be a part of.

At Odgers Berndtson, we understand the challenges and opportunities facing the global mining sector. We provide our clients with solutions that combine our in-depth industry knowledge and functional expertise from offices in mining hubs such as Bogota, Santiago, Johannesburg, London, Lima, Melbourne, and Toronto. We work with major mining houses, mid-tier firms, and junior mining companies to provide them with the talent they need to secure investment, develop major projects, and maintain their top position on the world stage.

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