Labour Market Trends

The Canadian mining industry faces several labour market challenges and a pending labour shortage. The main challenges for the sector are the aging workforce and poor representation of various demographic groups (i.e., lack of diversity).

In general, solutions for the pending labour shortages will depend on combining two goals:

1. Make the most of available sources of labour
2. Improving productivity.

Key labour market trends that relate to the challenges and solutions are employment, labour productivity, educational attainment, employment relationships, age of the workforce and diversity.

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Employment

Employment in Canadian mining is more volatile than in most other industries, making long-term workforce planning a particular challenge in the sector.

• Employment in the industry has been on a slight downward trend for the past few decades. Employment was just over 200,000 workers in both 2007 and 2008, slightly lower than the peak of 210,000 workers in 1984.
• MiHR's recent research has demonstrated a strong positive correlation between employment and movements in commodity prices, as measured by the Metals and Minerals Price Index. This relationship is a fundamental assumption in MiHR's employment forecasts.

Labour Productivity

MiHR's employment forecasts are based on the combined influences of commodity prices, previous year's employment and labour productivity.

• Labour productivity in the Canadian mining industry (measured as real GDP per hour worked) steadily increased between 1984 and 2006 at a rate of 2.9 per cent per year and has decreased by about 4 per cent a year since 2006.
  Decreases in productivity are not necessarily linked to changes in worker skills or technology and innovation, but may be a result of higher commodity prices enabling the extraction of increasingly marginal resource deposits.

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Educational Attainment

The demand for more and better skills in the mining industry has arisen, in part, in response to technological advances. However, the mining workforce has mixed levels of educational attainment, overall, when compared with the Canadian labour force.

• Fewer mining workers have a university level education (11 per cent) than the average for the Canadian labour force (22 per cent).
• However, in mining occupations that require a university education (e.g., engineering, geosciences and management positions), a substantially higher proportion of people in those roles hold degrees compared to those in other industries.
• The proportion of workers with an apprenticeship or trades qualification is higher in the mining industry (21 per cent) than it is in the Canadian labour force as a whole (12 per cent).
• Apprenticeship and trades-training are key elements of workforce development in the sector, but barriers to inclusion of key talent groups still exist. Specific programs that address barriers to training for key groups (e.g., women, Aboriginal peoples, new Canadians) are a priority for many employers

Employment Relations

The relationship between employers and the workforce is an important element in attracting and retaining talent. Four factors affecting these relationships in mining, include turnover; wages and hours; unionization; and use of contractors.

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Turnover

Tight labour market conditions and widespread labour shortages have historically been associated with higher employee turnover rates. As talent becomes scarce, competing employers or industries make more attractive offers and the best and brightest tend to become more mobile.

• According to MiHR's 2010 National Employer Survey , the average overall turnover rate for employers is approximately 5.6 per cent.
• Trades and undesignated occupations had higher overall turnover rates than other occupations, with an average of 8.3 per cent, and in some cases, as high as 25 per cent.
• Most of the employers responding to MiHR's survey reported that voluntary turnover in this occupational group has impeded productivity to a great extent over the past 2 years.

Compensation, Wages and Hours Worked

Compensation, wages and hours worked are indicators of labour force strength and labour-supply preferences. Sectors offering higher wages for fewer hours-worked tend to be attractive employment options.

• Total compensation in mining averaged $40.42 per hour with the highest compensation in the Territories and the lowest in the Atlantic provinces.
• Over the past 25 years in Canada, nominal wage increases have averaged 3.5 per cent annually, while real wages increased an average of 0.9 per cent. In contrast, over this period, workers in the mining industry have seen their real wages rise by approximately 20 per cent.
• Wages for surface and underground miners are highest in fossil fuel extraction companies (by approximately $4 per hour).
• Wages for hourly workers in diamond and industrial minerals companies tended to be higher than in metal mining companies—perhaps in part due to regional influences (i.e., diamond mines are typically located in northern regions where wages in all sectors tend to be higher).
• Weekly hours worked have increased 8 per cent over the past 20 years, with the largest increases in the Territories (at 11.5 per cent).

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Unionization

Unionization rates among labour force participants are a factor in wage and pension coverage and partly responsible for wage gaps in the labour force.

• Unionization rates in Canada have declined over the past 25 years from 38 per cent to 31 per cent
• In mining, unionization rates have dropped substantively over the past 25 years from 48 per cent to 24 per cent
• One third of respondents to MiHR's survey indicated that they do not have any unionized employees

Use of Contractors

As unionization rates fall in the mining industry, the use of contractors is on the rise.

• MiHR's employer survey showed that, on average, 13 per cent of respondents' workforces are comprised of independent contractors.
• Respondents also reported contracting out some activities more than others. For example, the majority of respondents contract out drilling and blasting, boring, and tunnelling activities.
• Education and training activities were also commonly contracted out, as were transportation, material-moving, and operations involving heavy equipment operators and mechanics.

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