Are you tracking these mining employee productivity metrics? You should be.
Measuring employee productivity is difficult in any sector, but even more so in mining. Data does not go back much further than the 1970s, making trend and cycle predictions hard; so too does the overlapping of various factors that can affect productivity.
Paul Krugman noted that ‘productivity isn’t everything, but in the long run it is almost everything.’ Highlighting the importance of effective production to a company over the long term.
In his paper ‘Mining Productivity and the Fourth Industrial Revolution’ author David Humphreys notes: ‘The notion of productivity, however, has particular significance in mining since mining operates in an industry with depleting assets. Productivity growth has first to overcome the effects of this before it can make any real headway. It all comes down in the end to costs and, to a significant degree, this means productivity.’
Ultimately, mining productivity and profit are heavily reliant on labour. As Mining.com notes it is ‘one of the few industries where financial control means managing high-value capital assets and equipment and a large diverse workforce. Both have a significant impact on productivity and profitability.’
To keep such a large workforce motivated and productive, with a steady rise in output, is no easy feat.
A holistic approach to workforce motivation and evaluation, can build stronger business foundations, staff morale and, ultimately, contribute to growing productivity and contribute to reaching business growth targets.
Below we take a closer look at several worker productivity metrics that can indicate whether you are on track.
In the mining sector, it is most commonly defined as, output per mining company employee over a given time period, where output typically is the content of the main product. In their paper ‘Measuring labor productivity in mining’, authors Patricio Garcia, Peter F Knights and John Tilton assess this definition and note the obvious shortcomings.
‘It fails to account for changes in the average number of hours mining company employees work annually, the growing use of outsourcing and contract employees, fluctuations in the quantities of by-products produced, and changes in the extent to which ore is processed domestically’.
McKinsey & Company concurs, stating: Industry managers have focused on labour productivity, typically measured in terms of the final product output—not the total material moved—per person employed. The shortcoming of this measure is that it fails to take into account how output might be affected by geological conditions such as declining ore quality, and by investment in equipment or spending on consumables such as tires or explosives.
To bridge this gap, McKinsey developed ‘MineLens’ a productivity index tool for companies in the sector. In essence, it, “enables mining managers to measure the aspects of productivity that are within their control. The areas under management’s control are capital and labour invested, the production processes it operates, spending on goods and services, and the way it organises mining operations.”
On a granular level, individual employee performance can be measured and reviewed through the implementation of an effective, unbiased Key Performance Indicator system. It is important to give consideration to how such a system is created and deployed in the workplace to avoid the skewing of results. In general, an unbiased performance measurement system balances the demands of the work environment and machine performance, against employee input into the mining process.
This brings us to a second important metric: management. As Humphreys notes: ‘Perhaps most problematic of all is the contribution of management to productivity.’
He explains: ‘Intuitively, it seems highly probable that a key element in boosting productivity lies in the ability of management to pull all the various factors of production, capital, labour and intermediate products together in an effective and disciplined fashion.’
It is thus important to take the performance of managers (line managers, duty managers, heads of department, etc) into account when trying to ascertain labour productivity.
Some questions you should be asking yourself include:
- Do operating systems free up time for managers to focus on productivity and operational excellence?
- Are managers prevented from engaging and communicating with one another by workplace silos?
- Are managers skilled at change management? Can they motivate staff to embrace new technology, tools and transitions?
Managers play a vital role in ensuring that employees are engaged and motivated. Companies that wish to improve their overall performance will do well to assist their management to unleash the performance of their reporting teams.
When it comes to measuring equipment efficiency, ask the following questions:
- Is the equipment fuel and/or energy efficient? How often must it be refuelled or charged, for instance, causing work interruptions .
- Similarly, how long do systems take to get back online after a power outage?
- What is the geolocation of the equipment? How long does it take for workers to move between various pieces of equipment, and can this be improved in the interests of efficiency?
- How much time is lost due to equipment breakdowns?
- Would it be beneficial to implement a predictive maintenance (PdM) plan?
While the mining industry has enjoyed enormous benefits from increased mechanisation and modernisation, extracting value from these equipment investments requires ongoing monitoring and management.
Safety-related incidents refer to productivity lost due to injuries, health issues or other occupational hazards.
A 2021 report by Frontiers in Public Health identified that injuries were most often associated with:
- A lack of routine stemming from being new at a mine or to a specific task.
- Extended working hours
- Failure in developing and implementing safe operation procedures.
- Incorrectly assessing the work environment and ‘inadequate planning for safety in the design and operation of new facilities and equipment.’
- Failure on workers’ part to follow safety protocols
These factors can be mitigated via better planning, training and enforcement of regulations, as well as by the implementation of automated early-warning systems.
Employee Engagement and Recognition
Employee engagement and recognition affords a company the opportunity to deepen a corporate culture of growth and learning. By encouraging continuous individual development while recognising top-performing employees, a company can signal the value that ongoing development can unlock at personal and work level.
Not only does up-skilling current employees ensure the workforce is more dynamic and up to date with the latest practices, but it also contributes to staff morale. Employees who see companies are invested in their individual development, feel more valued. This is important for staff satisfaction and growth, which ultimately leads to higher staff retention.
Employee-centred thinking of this nature is critical in a world where the attraction of talent and building gender diverse workforces are vital to the ongoing operations of companies. A recent study notes the lack of female employees in mining (women currently make up only 8-17% of the workforce).
In the study McKinsey & Company unpack the importance of gender diversity and observe the following: ‘Beyond the fundamental values of equality and equity, study after study has demonstrated the benefits of diversity on financial and operating performance. In one data set, diverse teams were reported to be more productive (11% higher adherence to production schedule) and to have safer practices (67% lower total recordable injury frequency).’
They continue noting that, ‘diversity promotes creativity and strategic resilience, and mining companies will need both if they are to successfully meet the broadening challenges facing the industry today, from digital and analytics disruption to sustainability and decarbonisation’.
A clear growth trajectory for employees and direct communication regarding a company’s future goals, are thus some of the fundamentals needed in employee engagement.
Well thought out and properly implemented employee engagement and digital communication plans can help businesses with collecting and disseminating information to frontline employees. They can help with employee communication strategies and solutions that foster engagement, increasing operational efficiency and productivity, with smart solutions to upskill staff. Employees also need to understand the role they are expected to play in pursuit of company goals and the benefits they can expect in return. In addition, the implementation of a reward program that can be applied to all departments, and which is equally attractive to all employees, will keep motivation buoyant.
It is clear that tracking worker productivity metrics is invaluable, not only when it comes to output per worker but also to measure overall company performance. These metrics are also a valuable source of data that can be used to further fine tune a company’s performance.
Talk to an expert today to find the right solution for your business.