top 10 hr issues in australia lng
TRANSCRIPT
A pair of jumper cables walks into a bar to order some drinks.Bartenders says “I’ll serve you, but don’t start anything”.
With that, let’s start.
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Just google me
Canadian.
A Canadian is an American who learned to diet and exercise.
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The price problem.Prices fallen well below costsPrices keep falling, finding new lows
Not many levers to pullLiquefaction – labour cost is low. Biggest cost is power. Hard tomove.Power purchasing, optimisation
Need to get gas production costs down dramaticallyRelieve regulatory burden, cost of complianceUnlock Australia’s shale potential
$2-4/mbtu
After business focus on best prospects what’s left?Every avenue to be explored
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Rationale:
Governments requiring more and more participation.Indigenous people demanding more participation.Desire to stay on the land.7.8% employed in Surat basin (mining)3-5% in oil and gas
Key barrier is high level of technical competence required for jobsSimplify the technologyToyota engineering – send teams to work with suppliersPNG success – more investment in local than typical. Greater numbers of supervisorsCreate supply businesses in tandem with developments
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Why? Expand labour availability, improve diversity of thought in the industry
In oil and gas2013 women = 10.4 per cent of engineering managers and professionals
= 1.7 per cent of engineering technicians and trades workersCompared to = 46.6 per cent all managers
= 14.2 per cent all trades workers and technicians respectively
Small talent pool, few women enrolled in tech fieldsMale dominated in the fieldSmaller suppliers seem to lack gender programsExtend programs beyond oil companies
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Why? Significant downsizing will have eroded institutional knowledge
• Generally low levels of turnover – 2-3%. 7% at risk, 15% unable to operate.• Significant levels of training overlap• 31% of our Australian experienced workforce is working overseas4.
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Why? Layoffs sends price signal to recruiting pipeline.Sector stability
Santos – 865QGC – 1000+Origin – 1000+Arrow – 300+Chevron - ??
Dotcom effect – dried up enrollments.Universities closed computer science departments
Get into the school system. Militant teaching profession in Canada blocking candidateinterest by presenting industry as evil
SPE events to promote the sector.Maintain inflow of candidates. Hire, if only a few.Make some noise about hiring.Encourage young grads via conference passes
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Why? Mental health challenges, suicides, loneliness.
FIFO, remote working, man camps, travel intensity
40% of sustaining workers at one of WA projects live in NSW.Question of sustainability
2014 survey by CFMEU by all commuting workers.58% say FIFO causes stress to them personally, or 54% to their family80% say fatigue a big issue at their workplace, 31% feel employer doesn’t take safetyseriously
Change up selection process to help detect best fit candidates.Improved analyticsMaintain commitment to quality living in camps (food, fitness, activities)Share practices with other remote living basins (Canada oil sands)Learn from other industries – military, research, off shore
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Why? Long life projects, large geography80% of project spend is with a contractorLots of individual contractors
Safety has improved considerably
Safer Together structure a good exampleWhole industry needs to operate at high safety performance
Rationalise safety standards and protocolsFrequent complaints about redundant safety training
Common behaviour trainingCommon minimum on-boarding trainingCertifications and passportsIndustry safety analyticsHotspot analysisPredictive safety
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Why? 30% lower productivity than other basins- CEOs
$250b red tape, $6b attributable to gas industry$2b in Queensland.$750m is government related, balance is self-imposed
Quote example of IVMS, geofencing
Manufacturing behaviour
Strategic use of technology and digitalGreater automationStreamline complianceRationalise regulations, common compliance methodBecome more agile at adopting change
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Why? Wage survey shows 30% higher than other comparable basins
Costs have come down 15% around world (Wood Mac), but they have everywhere
Macquarie bank example – mid level exec move into bank, but paid well beyond bankingnorms.
$200k for staff accountant, with bank $100k
Wage reset.Red circle – no wage increases.Reset happening via layoffs, rising unemployment.Shift to individual contractor model – small layer of permanent staff
Compared to global Oil and Gas organisations, in 2013 Australia had the second highest annual average salary at$163,400 USD2.
2014 saw a 20% correction in average salaries, reducing the Australian annual average salary to $132,000 USD3.A skills shortage is one of the key drivers of wage inflation, which Australia has already seen through the recent
mining boom.
Different wage structure – base plus commodity
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Why? Not good policy perception.
Fraser institute – Canadian think tank.70% are company insiders drawn from management ranks and specialist roles26% are focused on unconventional710 respondents, 156 jurisdictions
Public policy index. Lower is better.Lowest is 7 globallyNew Zealand preferred by executives to anywhere in Australia
Executives tell me they are keen to invest but costs and productivity are a barrier
Considerations:Commercial environmentRegulatory climate (on par with Chad, Vietnam)Geopolitical riskFiscal termsTaxationEnvironmental regulationCost of complianceUncertainty around protected areasTrade barriersLabour regsInfrastructure
Working with government
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Critical Things WrongCritical Changes ImplementedResults Achieved1 Non adherence to project scheduleShort term planning (monthly, weekly, daily)Short term planning structures to drive and achieve operational targets – increasingoperational productivity and adherence to baseline project schedule
2 -Personnel behaviour and operational cultureFront line coaching and behaviour changeSuperintendent and supervisors driving new operational culture including enhancingshift productivity and change out days – enhanced communication and decision makingability
3 Multiple weeks lost in Project ramp upOperational Readiness and ramp up step changeEmbedding operational readiness framework and productivity step change at beginningof project – up to 2 weeks claw back in start of projects
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