Succession Planning for 2020: Do You Really Know the Next Generation?

It is well-known fact that, similar to other industries, the Resource & Energy (R & E) sector is going to face significant labour and expertise shortages due to demographic changes in the next 10 years. Baby Boomers are starting to retire just as the number of big, multi-billion dollar mining projects that require significant and diverse senior management expertise and skills is on the increase.

There are various reasons as to why vacancies in executive management positions are happening and will continue to, but the major ones are due to:

–  Fewer people capable of filling executive roles as compared to the previous generations. This is partially as a result of the elimination of middle management positions in the ‘80s and ‘90s which in its turn limited the pool of knowledgeable specialists. Available internal middle managers and potential candidates for senior positions who are interested in moving up do not have the right skills and experience because they have not been adequately mentored or coached.
–  Current employment realities are global which means that competition for attraction of the brightest talents in the R & E sector has become international in nature. More than ever, senior management and technical staff are expected to be mobile and relocate to other regions and countries.
–  More and more developing nations realize the importance of mining as a significant driver to their economic development and create policies that enable investment in the mining and resource extraction sector as well as exploration and project development activities. As a result, such economies are starting to “afford” and source highly skilled and experienced managers from the developed nations.

 

Additional factors specific to the mining industry, such as a decline in enrolment in industry-related apprenticeship and university programs, negative perception of mining as a promising career path  and traditionally low rates of female participation make this shortage even more challenging. Looking at the latter aspect, technical and professional female participation in the mining industry was discouraged until very recently; in Canada, for example, women were not allowed underground until 1974 and some resource-rich countries, like Mongolia, continue the practice of banning women from mining operations. Data indicates that the percentage of women working in the resource industry ranges from 13 – 20 % with Australia leading the way. Finally, the cyclical nature of the mining industry is not conducive to creating a stable talent pipeline; it creates unique challenges both in education and training as well as employment and career advancement levels. The most recent labour market data indicates that many mining companies are cutting down their operational costs by reducing their staff or hiring fewer new graduates and/or young specialists. As the mining sector  starts approaching the recovery phase, the very same companies will be looking to expand their workforce and fill newly-created management and technical roles; however, they will be challenged to do so as there will not be enough experienced specialists simply because companies chose to skip investing in training and coaching opportunities during preceding slump phase.

While some companies are awakening to this reality and starting to collaborate closely with educational institutions to produce the next generation of specialists and promote mining as a fulfilling career path for men and women alike, another important aspect of the war for talent is being overlooked by the industry executives and senior HR management: significant generational differences and the ways these will impact succession planning which, in its turn, will shape organizations of the future.

Traditionally, one of the most important management issues, especially for large organizations, has been succession planning. According to the Mining HR (MiHR) Innovate, Canada “Strategic Workforce Planning connects HR strategy and practices to business strategy ensuring a company has the right people in the right place at the right time and at the right cost to execute its business plans.” The question is: do these strategies incorporate generational differences? Many Baby Boomers are starting to step down (and will continue to do so in the next decade)  and are gradually being replaced by the Generation X-ers (born in the 1960s and 1970s). While these two generations have some significant differences, they are pretty similar in their professional ethics with slightly divergent views on the importance of work-life balance.

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