Natural Resources Human Capital Challenges in South Africa

Growing tensions about the state of the world's natural resources workforces have surfaced for a few stark reasons. These include the industry's increased appetite for skilled workers, the ongoing challenge of convincing enough university students to pursue energy-related careers and the considerable demographic shift that is beginning to move the global post-war generation into retirement.

Ian Blackie, managing partner of TRANSEARCH Africa and global co-leader of the Resources, Energy and Inftrastructure practice for TRANSEARCH International, says a massive and sustained increase in demand for natural resource commodities has led to unprecedented growth in new projects and revealed a human capital deficit across the African continent. This, despite the South African government's ongoing struggle to contain the effects of rising inflation and the mounting technical challenges with associated safety issues as mining - especially in gold and platinum - reach ever-deeper levels.

The growth in new natural resources projects alone, Blackie contends, would have led to a shortage of skills even 20 or 30 years ago when mining schools, for example were operating at full capacity. Today's workforce challenges, Blackie points out, are exacerbated by the flight of a "lost generation" of university graduates who have chosen to pursue careers outside of natural resources or in other mining countries such as Australia. This resulting labor shift has put a premium on experienced mining managers and pushed the salaries of senior staff to record levels. International resource companies involved in the mining renaissance sweeping Africa have increasingly been looking to South Africa for the technical skills they require.

Further complicating that challenge, at least in South Africa, are new government legislation, labor pressure on wages and bureaucracy that alone present significant obstacles to further expansion for the country's natural resources companies. Leading natural resources companies in the region, Blackie says, are countering that pressure and investing in their operations by building structures to deal positively with government departments.

Perhaps most telling, however, are the investments they're making to build, develop and sustain their workforces for the long-term, in part to extend productivity, mitigate the risk of commodity supply disruption and ensure an effectual transfer of critical skills to a new generation of employees. "They're spending significant time and money on training previously disadvantaged South Africans to address the unfairness of past hiring programs," says Blackie, who adds that regional natural resources employers are also improving their treatment of and communication with existing employees. "More and more effort is being placed on employee relations," Blackie says. "And various new schemes including retention bonuses have been put in place in an attempt to retain key skills."

Beyond these new initiatives to stem the loss of institutional skills and natural resources know-how, Blackie contends, the requirements for executive leadership positions within the corporate structures of most of the region's natural resources employers are changing significantly. A chief example of this shift has been borne out in the appointment of foreign executives who bring truly global experience and credentials to the challenges confronted by Africa's regionfocused natural resource companies. "This appointment of non-South Africans to head major South African mining companies is unprecedented," Blackie contends, adding that the intense pressure to deliver results is also unprecedented in many ways.

These trends are already influencing the search for executive talent in natural resources across the African continent, leading more regional companies to extend the scope of external search assignments to a more global scale in order to fill key positions. Looking ahead, Blackie expects the regional leaders of the natural resources search practice of TRANSEARCH International to work increasingly across national borders in order to bring world-class leadership candidates to regional executive search assignments and management succession plans.

This article is an extract of the White Paper entitled 'Under Pressure: Natural Resources Human Capital - A Prized Resource As Global Consumer Demand Escalates And Natural Resources Companies Confront Significant Talent Gap'. Get your copy of the full White Paper via the Transearch International website at http://www.transearch.com/press_room/display2.asp?nID=204. It may alter your view of the market and competitive forces at work and how to evolve with them.

Note to Editors: About Transearch International
Executive search firm TRANSEARCH International has representation in most of the major economic centres of the world with 59 offices in 37 countries. TRANSEARCH International was founded in 1982 and is a leading international executive search firm. Natural Resources Human Capital Challenges in South Africa