Australia, like most developed nations, is in the midst of a generational change. The collective retirement of executives and workers creates a knowledge gap as their skills, earned from experience, leave the market. This change is especially prevalent in the mining sector. Integrating innovative technology with expert human knowledge retains the vital skills of the near-retirement employees in the market, whilst, improving not only the knowledge of the unspecialised workforce but also creating a new information platform.
As of 2010, workers aged over fifty-five accounted for approximately 16% of the entire Australian labor force. The participation rate of this group increased from 25% to 34% over 30 years, with the bulk of that growth occurring in the past decade alone (ABS, 2010). These employees have the advantage of experience, working through both economic recessions and expansions. Also, on average, this age group enacts longer job retentions, of about seven years (McCrindle, 2016). This longer working horizon aids in the specialisation of their chosen field. However, as these employees collectively retire, their skills gained through experience threaten to retire with them.
Conversely, the younger generation of workers may lack the expertise of their predecessors. This resulting from the younger generations lower job retention rate. According to the Reserve Bank of Australia, on average 12% of millennial workers voluntarily leave their current job positions in under twelve months. Compared to just 3% of their baby boomer counterparts. For the Australian mining industry, this issue is heightened. This sector experiences the second highest worker turnover rate of approximately 35% per annum (D’Arcy, Gustafsson, Lewis, & Wiltshire, 2012). Meaning, 35% of the mining industry employees change job positions after less then one year of work. Arguably, this lower job retention decreases the specialisation and experience needed to deal with changes in the turbulent economic environment surrounding the mining industry.
This lack of experience translates into higher costs and increased risk. Persistent millennial turnover costs the U.S. economy an estimated USD30 billion per annum (Adkins, 2016). An in-depth study of the oil, gas and mining industry found that 65% of on-site fatalities between 2001-2010 occurred to those with under one-year experience in the industry (Cullen, 2015). As young workers inevitably become a larger proportion of the labor force, estimated over 40% by 2020 in the U.S. (NASDAQ, 2016), the current positive economic profit of companies may be negatively impacted.
Young workers, however, understand the need for technology and innovation. The high job turnover rates for young workers indicate that they are open to, or even seek, a changing work environment. Research by Deloitte indicates that having a strong emphasis on professional development results in an 83% increase in young workers staying in a single position for over five years (Deloitte, 2016). This emphasis on professional development, aided by technology, can also counterbalance the current lack of specialisation prevalent in this employee group.
Navigating issues around generational change may require a different outlook. One where knowledge, gained through experience, becomes a product in itself. Where remote mine sites and excellence centres are connected using the “internet of things”, allowing for near real-time data collection. The experienced workers in the excellence centres are then able to understand the integrated mine and impart their advice to those younger workers on the ground, whilst intelligent technology retains and builds mine-specific knowledge. This enables mining companies to handle, or even predict, future issues arising from changes in production.
About the authors:
George McCullough is Strategy Director and Gina McGagh is Data Visualisation Architect at Interlate
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