For decades the Australian mining industry has moved away from a residential workforce towards FIFO. But in the wake of the global pandemic, the sustainability of this model has been called into question. Mining companies also face mounting pressure to review their workforce plans when operating close to significant regional population centres.
“The mining sector is now highly reliant on moving people around the country, but businesses and Governments are rethinking this strategy, and considering whether this model remains the best way to support remote mining operations,” explains Paul Howard, a Partner for Gerard Daniels. “There is also a lot of discussion on the responsibility mining companies have to support remote communities, and to build stronger mining workforces, and sustainable local businesses in these locations.”
What triggered a re-think on FIFO
Long before the pandemic, flying people to and from mine sites had become an accepted way of doing business in Australia’s mining industry. But when state and territory borders closed, this model very quickly changed.
“COVID emphasised the business risk of FIFO, and overnight it became very difficult to operate with limited access to a workforce that was reliant on travel,” says Paul. “To continue operating, many mining companies had to move employees and their families inside state borders. And while the borders have since reopened, this risk remains.”
With an increased focus on ESG, mining companies are also mindful of the need to leave positive lasting and legacies in the communities impacted by their activity, but this is a goal that a FIFO-based workforce does not always support.
The true cost of FIFO workforces
While there are many commercial benefits to a FIFO workforce, there will always be an underlying cost when any workforce swings too far in one direction. “Some mining operations are so remote they can only be serviced by a FIFO workforce. But focusing too heavily on this model when there are townships nearby, only serves to weaken ties with these communities,” says Paul.
“Long-distance commuting and working away from home can also be detrimental to the psychological health and wellbeing of FIFO workers and their families,” Paul continues. “We know that the isolation and separation put pressure on families and other important relationships, and that sadly Australian FIFO workers experience disproportionately high rates of suicide and depression.”
These challenges have led many mining organisations to revisit their workforce plans, in search of better sustainability and outcomes.
Building stronger communities through residential workforces
Former National Leader and Karratha MP Brendon Grylls called for far higher levels of mining workforces to be based in the regions – and while Paul believes that there does need to be a balance, he also agrees that the mining sector should be more active in encouraging local employment and investment into regional towns.
“A lot more can be done to breathe vibrancy into the communities that support remote mining operations in Australia,” says Paul. “And when you consider that the population of these towns largely determines the funding for healthcare and education services, transport infrastructure, sporting and other community facilities, the argument for sourcing and placing talent locally becomes much stronger.”
Investing in developing and upskilling residential workforces is another important part of strengthening remote mining communities. “Developing the local workforce is part of the social licence to operate when Australian mining organisations work overseas, but back at home this requirement is much easier to overlook,” says Paul. “Having better strategies for investing in training and growing talent locally will reduce the reliance on FIFO workforces, and bolster the long term resilience and sustainability of remote and regional communities.”
Why is the FIFO / residential balance difficult to achieve?
Several factors make reducing the reliance on FIFO particularly challenging:
- 71 percent of mining leaders say talent shortages are holding them back. With labour shortages like these, finding local talent with the right skills and experience can be difficult.
- Expecting existing FIFO workers to transition to residential roles can result in high turnover and poor employee sentiment. The quality of essentials like schooling and infrastructure in regional towns is another deterrent for employees facing this transition.
- Given many people can’t or don’t want to relocate, the recruitment prospect for filling new regional residential roles is equally challenging. This issue is amplified by the generally recognised reluctance of Gen Z workers to live in remote communities.
- Although there are significant community benefits, the cost of building residential workforces is another consideration. One iron ore operating company in WA recently estimated businesses will spend an additional $100,000 for each employee placed in a regional town.
What will it take to make this shift?
Creating vibrant, safe, and economically sound regional communities is a great outcome for everyone – so what will this take to achieve?
Legislating change: Legislation was successfully passed in Queensland to prohibit 100 percent FIFO workforces on large resources projects near regional communities. Although Queensland is currently the only state to pass this legislation, it demonstrates an appetite for change and showcases the role of government in backing regional and remote communities.
Embracing local: Mining companies may need to look elsewhere for specialist skills and experience, but there will always be strong case for training apprentices, upskilling workers and making good use of local talent for the general workforce (and supporting businesses).
Importing talent to grow remote towns: When remote towns lack the size or vibrancy to appeal to Australian workers, overseas workers may value the opportunity to help grow these communities.
Earning your stripes: Spending time working remotely was once an accepted step in breaking into the mining industry. Times have changed, but remote internships may still help to lure graduates into taking on residential roles.
Hybrid workforces: When Paul first started working in the mining industry, for many of the larger mining organisations, all semi-professional roles had to live in the local township. “While this model might not work as well today, having a clearly defined hybrid strategy reduced the reliance on FIFO, fostered a great sense of community and made towns where people loved to live.”
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