Welcome to the New Year with no respite in sight for the mining industry.
2013 saw assets mothballed, reserves revalued, facility sharing and financing restructured. This was endured but with continuing pressure on cash flow and expense what more can be done?
The next wave of savings will not be so obvious or easy to realize or more importantly, captured without leaving the business able to react to an upturn when it finally comes. If the past is any indicator the future comes quickly.
Here are some thoughts on people management:
- The HR Dept – You Still Have One? Everything that you need to do can be outsourced for less. Valuable as they may be in times of rapid expansion HR practitioners are expensive, particularly when they are looking for things to do and in a downturn once you have scaled back there isn’t much. Unless HR is at the strategic table think about paying for help as you need it.
- Compensation – Stay informed. You are not planning for and employees do not expect a compensation increase in 2014. That doesn’t mean that you can forget what’s happening at those companies that covet the key skills in your company. 2014 is forecast to be another year of low inflation across all industries but not across all skills – what’s happening with the ones that you especially need. Hot spots emerge quickly and while the war for mining talent is in a cease fire, that will change quickly.
- Pay at Risk – That Means What it Says. If you still refer to the annual incentive as “a bonus” it’s time to change. You may have suspended the incentive in 2013 but that cannot go on forever. To get a larger return on your investment in pay ask for more in exchange. Introduce precise goals with clear metrics and timelines and minimum thresholds that drive the business where it needs to go.
- Employee Benefits – Manage Risk Prudently – we hear you; this is not a time to take on more risk, but let’s look at what risk you can bear and what you are paying for. Are you using all of the financing facilities available from your insurance company? Can they be a source of financing? By the way, if you use a commission based broker they are not going to be much help here.
- Employee Benefits – Fire Your Broker – we wrote at length on this last year but suffice to say that it is highly unlikely that you are getting truly objective or sophisticated enough advice during these times. Ask your insurer if you can pay a premium with the brokers commission removed and then call us.
- Projects – Now Is The Time – to do that thing you have been putting off. You have fewer employees, the task will be smaller and less complex and the employees you do have will be much more open to change. Whether it is amending employee terms and conditions, introducing a new payroll or developing a grading structure, now is the time. Further, if it will make you more effective in your response when the upturn comes, there will never be a better time, particularly if it is going to require the support or agreement of your employees.
- Recruitment – Ha Ha Ha – Remember 2008? How quickly the market turned. 2014 will probably not see a recovery that fast. Nonetheless it will be important to be prepared. Recruitment has changed forever. The internet and search media are the way in which younger professionals search for their next career move. No you can’t take care of this with the Receptionist working Facebook and Twitter for a few hours a week. You will need a dedicated webpage and targeted social media messages to attract the best.
Humor aside we hope this list helps stimulate thinking around areas where some real savings can still be made while making your organization more effective.