Any HR leader knows that recruiting and onboarding can be time-consuming, complicated, and above all, costly. For highly specialized technical hires, or executive positions, recruitment and onboarding costs average about 213% of their annual salary.
But even amongst experienced workforce planners, less is understood about the cost that unfilled positions can impose on organizations. Increased burdens on existing employees, missed production targets, or projects that never come to fruition are real consequences that Canadian miners are dealing with. As labour challenges persist, the costs of positions remaining vacant can add up quick.
As Canada’s mining industry expects that 80,000 jobs will go unfilled by 2030, understanding the hidden costs associated with chronic job vacancies will be important for mining leaders, because they are likely to be substantial.
When positions become vacant, the initial reflex for many managers is to distribute the workload to existing employees. While this may be necessary, the long-term implications can translate to exorbitant costs for the organization.
Direct costs by means of overtime, increased wages or additional training to employees who are not just doing their own jobs, but also covering until a new hire can be found, are typically easy to calculate, but can often amount to more than the cost of simply filling the position.
Indirectly, workload distribution often comes with many harder to measure costs. Employees who are expected to do their own job, and at least a portion of someone else’s, mean that retention becomes more challenging.
In fact, in recent studies, high workload was determined to be the number one factor for employee burnout. As employees begin to leave and workloads remain high, many organizations experience a compounding effect that increases employee turnover. For mining organizations that are not careful, distributing workloads can create a slippery slope of employee dissatisfaction.
Workload distribution also means that specialized workers are forced into unfamiliar roles to cope with vacant positions. As such, mining organizations risk losing productivity associated with specialization. In more extreme cases, work distribution can lead to increased errors and worsened health and safety outcomes as employees struggle to cope with increased overtime and unfamiliar tasks.
Long term, workers being chronically mismatched could prove to be detrimental for organizations looking to develop their next generation of mining leaders. Instead of investing in management training, employees with a high potential to move into leadership roles could see their talent squandered as they work in positions that do not match their skillset.
As labour challenges persist in Canada’s mining sector, miners are increasingly coping by paying a premium for third party contractors. A rise in chronically unfilled roles has also spurred some organizations to invest in new technologies, which come with added costs of technology implementation.
However, perhaps the most disturbing cost to the mining sector as it pertains to positions going unfilled is lost opportunity. As Canada’s miners struggle to fill positions, more mines are reporting that even above-average levels of absenteeism can translate, at least temporarily, into production stoppages.
For others, ambitious growth plans have been put on hold, or cancelled altogether, as a lack of labour has made many projects simply untenable. It is thus no surprise that 72% of mining leaders say that talent shortages have negatively impacted their production and growth plans. If labour challenges continue, Canada could see its reputation in the eyes of mining investors diminished, to the detriment of Canada’s miners, and the country.
So, do high costs associated with vacant position mean that HR leaders in Canada’s mining sector need to compromise to fill roles rapidly? Not necessarily. Though the costs of unfilled positions can be enormous, recruiting professionals into positions to simply “fill the role,” can be detrimental and lead to high first-year attrition rates, which can be costly, demoralizing, and leave mining organizations in the same situation they were in prior to hiring.
Instead, HR leaders must do more to understand the costs associated with unfilled positions. With this data better decisions can be made regarding the urgency to fill a role. If the cost of the position going unfilled drastically outweigh onboarding costs, perhaps it is worth investing in additional onboarding and training to hire a professional that may not have all the skills necessary but could alleviate some of the costs associated with an unfilled position.
As the labour crisis worsens in Canada’s mining sector, an intimate understanding of the costs of unfilled positions will be critical so that Canada’s miners can adjust their workforce strategies. If not, the costs to miners and to Canada, whether they are known are not, will be damaging.
Danny Parys is a senior consultant at Calross Consulting, a recruitment and HR consulting firm that specializes in the Mining and Metals sector.