According to a report in Mining Weekly, South Africa’s Mineral Resources Minister, Susan Shabangu, who was recently speaking at the Chamber of Mines annual general meeting, said that South Africa loses more than half of its technical graduates to other sectors of the economy, in their first 5 years of employment. She also added that this figure increased to around 70% within 10 years of employment.
She said “I think we need introspection, as industry, we need to look at ourselves and determine why we are unable to retain these very skills that will enable growth in the industry”.
Susan Shabangu also stated that the industry needs to evaluate its skills development initiative to ensure that it meets the needs of the workforce. She said “a yearly progress report indicated that the accumulative yearly investments in skills development in the sector so far has reached 4.6% of total payroll, excluding the statutory skills development levy. Given the size of payroll in this industry, this is not insignificant, however a significant number of mineworkers remain unskilled and the industry is reeling from the severe shortage of skills that it requires to grow”.
She added “that we need to move towards the modernisation of the mining industry and one of the aspects of that is skilling our people. This will ensure that our industry is globally competitive and successful”.
From what I can see, these comments should be worrying for the mining industry in South Africa, and I am sure adding to this problem, is the “brain drain” that has been going on in South Africa for some time now. The “brain drain” that South Africa has been experiencing, is not a new phenomenon and could possibly worsen with the recent unrest and wildcat strikes in the South African mining industry. It is possible that more South African skilled workers in the mining industry will flee to what is regarded as safer shores, which is going to create even more of a skills shortage in the mining industry.
According to the Human Sciences Research Council (HSRC), South Africa‘s growth is still hampered by a severe skills shortage. South Africa’s skills gap currently mainly concerns science, technology, engineering, accounting and maths. It appears that people with unique skills, such as specialised medical personnel, are migrating to other countries. According to reports South African mines also depend mainly on foreign labour for their engineers and, in the financial realm, SAICA recently had to recall retired accountants. There are also reports of retired engineers being recalled, due to the lack of skills.
In order to alleviate the shortage, the South African government has been issuing work permits to qualified professionals from other African countries and abroad.
Although this brain drain is concerning, it is not all doom and gloom, as South Africa is not the only country facing a skills shortages. There are reports that some European countries, Canada, Australia and New Zealand also appear to be facing a skills shortage. However, the main difference is that these countries are better positioned to attract labour than South Africa is able to, which is resulting in skilled South Africans leaving in search of “greener pastures” in these countries.
How does this affect the salaries of those South African skilled workers left in the mining industry?
According to the results of our recent salary survey, skilled South African mine workers are not fairing too badly salary wise. Actually professional South African mine workers are earning competitive salaries even to countries such as Canada and the USA. Salaries are generally lower than in Australia, although so are Canada and the USA, as according to recent reports it appears that salaries in Australia can be as much as 60% higher than other regions. Although I was interested to see that the 75%ile of Mining Engineers in South Africa with 6 – 10 years’ experience appear to be earning even more than their counterparts in Australia.
Have a look at the graph below which compares the salaries of Mining Engineer in South Africa with 6 – 10 years’ experience, according to our salary survey, to those in other regions:
From what I can see, if trends continue and the skills shortage does not ease, in the mining industry in South Africa, it could push the salaries of mining professionals higher, as mining companies scramble and compete with each other to attract the few mining professionals available.