THE AUSIMM REMUNERATION SURVEY 2014 AN ANALYSIS OF PROFESSIONAL REMUNERATION IN THE MINERALS SECTOR

Transcription

1 THE AUSIMM REMUNERATION SURVEY 2014 AN ANALYSIS OF PROFESSIONAL REMUNERATION IN THE MINERALS SECTOR NOVEMBER 2014

2 PROVIDING LEADERSHIP AND OPPORTUNITIES TO MINERALS INDUSTRY PROFESSIONALS The Australasian Institute of Mining and Metallurgy (The AusIMM) was founded in 1893 and provides services to professionals engaged in all facets of the global minerals sector. With a focus on providing leadership and opportunities to minerals industry professionals, The AusIMM delivers an ongoing program of professional development services to ensure our members are supported throughout their careers, enabling them to provide high-quality professional input to industry and the community. The AusIMM represents members drawn from all sections of the industry and supported by a network of branches and societies in Australasia and internationally. ABOUT THIS SURVEY The survey was conducted in June 2014 with 22.7 per cent (3334) of AusIMM members participating. This is the single largest response to any AusIMM survey, with the results giving us strong insights into members current remuneration and working hours. MEDIA CONTACT Wayne Robins, Director, Policy & Communications Tel: wrobins@ausimm.com.au FURTHER INFORMATION A more detailed exploration of the survey s results is available at 2

3 Background to AusIMM s Remuneration Survey series by Barney Milles, Manager, Policy and Research, AusIMM As the leading organisation representing all professionals in the minerals sector, AusIMM is committed to furthering our understanding of members experiences in the minerals sector so that we can continuously improve our ability to represent members interests and improve the services and support that members can access. AusIMM has been conducting remuneration surveys of members since This year we conducted the Professional Employment Survey that included a component on remuneration. The 2014 survey had a strong response rate with 3334 members completing the survey. This is the single largest response to any AusIMM survey and provides a good level confidence in the results. The dramatic changes seen in the first part of this survey AusIMM members experiences of the employment market were set out in the Professional Employment feature in the October issue of The AusIMM Bulletin. Those results led to significant media coverage and helped highlight to industry and governments the challenges minerals professionals are currently facing and the sector s risk of losing key skilled professionals. In this feature we explore the remuneration story as revealed through the survey results. The survey generated unique data that reflects the particular experience of minerals professionals in the turbulent minerals sector. This includes data on salaries trends, the nature and scale of the gender pay gap amongst minerals professionals and insights into changing patterns of working hours. Most of the remuneration survey s history reflects boom times in the minerals sector particularly for the Australia-based Institute members. The survey results are set out in two articles in this feature. The first article examines the trends in level of work, salary and working hours for AusIMM members. The second article examines the relative experiences of female and male members and updates our understanding of the gender pay gap amongst minerals professionals. In summary, the results show significant salary reductions at all levels except Level 1 roles (graduates and new professionals). They show professionals working more hours for the same or lower pay and a lower proportion of members being employed in the most senior (Level 5) roles. In addition, even at its lowest level recorded the gender pay gap is still an unacceptable 27 per cent. These remuneration results, including the gender pay gap story, will continue to be shared with our stakeholders and governments in an effort to further influence change. Level 1 Level 2 Level 3 Level 4 Level 5 Graduate commencement level. Professional tasks of limited scope and complexity, such as minor phases of broader assignments, in office, plant, field or laboratory work. Following development through Level 1 is an experienced professional who plans and conducts professional work without detailed supervision, but with guidance on unusual features; and who is usually engaged on more responsible assignments requiring substantial professional experience. A professional performing duties requiring the application of mature professional knowledge. A professional required to perform work involving considerable independence in approach, demanding a considerable degree of originality, ingenuity and judgment and knowledge of more than one field, or expertise (for example, acts as their organisation s technical reference authority) in a particular field. A professional usually responsible for an administrative function, directing several professional and other groups engaged in inter-related responsibilities, or as a consultant. Achieving recognition as an authority in a field of major importance to the organisation. Table 1. Career level definitions used in the 2014 Professional Employment Survey. Notes to interpreting the 2014 remuneration results The survey had a very strong response rate with 3334 (22.7 per cent) of members completing the survey. This is a larger response rate than previous remuneration surveys and therefore the level of confidence that the 2014 results are representative of AusIMM membership as a whole is high. The survey asked members to indicate what career level they are working at. The five-level scale used in the survey extends from graduate and new professional roles at Level 1 through to senior/ executive management at Level 5. The definitions used in the survey are set out in (Table 1). 3

4 In conducting the 2014 survey we made one important adjustment to the way salaries data are gathered. The 2014 survey asked members to tell us their exact salary, whereas previous editions of the remuneration survey asked members to indicate which of a series of salary bands their income fell within. This change in the survey meant that some data cleansing was undertaken to remove responses that were clearly outside the expected range. (Some 70 responses that indicated employed members had annual salaries of less than $3000 or more than $5 million were removed from the analysis.) With this data cleansing and the shift to using exact salary figures provided by members, the level of confidence in the accuracy of salary data has increased with the 2014 survey compared with previous editions of the survey. All results should nevertheless be interpreted with caution. All salaries data is reported in Australian dollars, with conversions having been made for those members who reported their salary in other currencies. Caution needs to be particularly applied when interpreting results for members working at Level 1 and to a lesser extent, members working at Level 2 because there are relatively few survey responses from members working at those levels. In addition, caution is required when looking at the gender equity results for Levels 4 and 5 roles for which women represent only a small proportion of responses. It is important to note that all salary figures cited relate to base salary only. Many survey respondents would be eligible to receive performance bonuses and special payments (eg remote area work bonus or first aid officer allowances) that are not included in this analysis. The salaries data presented have not been adjusted to take account of the impacts of inflation. All results are reported in nominal dollars (as opposed to real dollars ) which are adjusted for inflation to show trends in the real purchasing power of salaries over time. Analysis was undertaken on an hourly pay rate basis to normalise for the bias of women more often working part-time compared with men. To calculate the results, an hourly rate is generated by dividing the base salary reported by the average hours of work nominated. 4

5 The downturn hits wages by Wayne Robins, Director, Policy and Communications, AusIMM In this article, we look at trends across levels of responsibility, hours worked and salaries. What is clear is that AusIMM members have experienced significant change across all of these areas with downsized salaries, changing responsibilities and longer working hours. Levels of responsibility Figure 1 illustrates the pattern of AusIMM membership over the five career levels (see Table 1 of the previous article). The majority of AusIMM members indicate that they work at Levels 4 and 5 suggesting that they generally work at very senior levels within the minerals industry. The responsibility mix arguably highlights an important opportunity for AusIMM to better engage the professionals of the future. Despite attracting significant numbers of Student Members, those students often do not retain AusIMM membership during their graduate and early career stages. This is certainly a challenge for the Institute and a number of groups across AusIMM, including the New Professionals Committee and the Graduate Readiness Taskforce, are focussing on. Figure 1 shows there has been a slight drop in the proportion of AusIMM members reporting that they are working at Levels 4 and 5, with an increase in the proportion working at Levels 1, 2 and 3. This result may reflect the turbulence within the employment market for minerals professionals per cent more than one in ten survey respondents indicated they had less responsibility at work at the time of the survey than they had a year before. Some of these people may now believe they are working at a level lower than they were a year ago. Working hours The survey shows that the hours worked by the average minerals professional in employment has increased by more than ten per cent in 2014 when compared with In July 2014, on average, minerals professionals reported working 37.7 hours per week an increase from both the July 2013 result of 33.8 hours and July 2012 result of 35.9 hours. The reasons for this change in working hours by the average employed minerals professional are not entirely clear. There has been an increase in average working hours for both fulltime and part-time work. At the same time there has been a shift towards part-time work with the proportion of members working part-time almost tripling in the period 2012 to Table 1 shows patterns in working arrangements. Figure 1. Remuneration surveys percentage of respondents who work at each level. The Professional Employment Survey 2014 finding that 17.5 Average working hours per week Average full-time working hours per week Average part-time working hours per week % of employed members working part-time Table 1. Working hours and full-time and part-time employment rates. 5

6 per cent of members reported experiencing pressure or expectation to work unpaid extra hours or overtime in the past year seems to lend weight to this possible explanation. This increase in the average working week s length has occurred even though the proportion of AusIMM members who are working parttime has almost tripled in the period 2012 to The average working week of 37.7 hours for employed minerals professionals working breaks down to: 35.8 hours per week in Australia 33.8 hours per week in New Zealand 38.3 hours per week in the rest of the world. seek to retain staff in a period of reduced business opportunity. 8.4 per cent of members report that they have had forced reductions in working hours during the year. Annual salary trends base salaries The most striking survey result is the significant drop in average salary for AusIMM members. The average salary for employed minerals professionals at July 2014 was $ , comprising an average of $ for those working full-time and $ for those working part-time. The average salary for survey respondents of $ represents a significant 19 per cent reduction from the 2012 survey average of Figure 2 illustrates working week patterns by discipline. Full-time management professionals report working the longest weekly hours with an average working week of 52.6 hours. Geoscientists and management specialists lead the overall average working week across all part-time and full-time professionals with each discipline working an average of just under 40 hours a week. In addition, the survey shows that AusIMM members are increasingly unhappy with the number of hours they are working. Twenty per cent of employed minerals professionals would prefer to be working fewer hours. There has been a large increase in the number who would like to work more hours, growing from just 2.9 per cent in 2012 to 9.7 in Figure 3 shows the pattern of increasing dissatisfaction with working hours. This seems to reflect an unsettled employment market where some people are feeling the pressure of continuing to do business in an environment of fewer staff following down-sizing. Another key factor is mandatory part-time arrangements as businesses Figure 2. Average working week for survey respondents by discipline. Figure 3. Desire to work fewer or more hours. 6

7 $ which was the peak of the salaries growth trend. Figure 4 illustrates average salary trends by level and for the average survey respondent. It is important to note that the average is skewed towards the more senior levels of employment, reflecting the pattern of AusIMM membership. $300,000 $250,000 $250,000 $200,000 $200,000 $150,000 $150,000 $100,000 $100,000 $50,000 $50,000 $- $- Figure 4. Average base salary trends by level and for the average AusIMM member nominal dollars (not adjusted for inflation). $74,310 $74 $90,577 $81,180 $91 $81 Average base salary all survey respondents, $112,075 $104,672 $134,568 Gender, Full/Part time Regions Disciplines Commodities Figure 5. Average salaries broken down by various measures. $105 $112 The rapid reduction in average salaries between 2012 and 2014 reverses a trend of salaries growth trend that has been documented by the AusIMM remuneration survey series since If the data is adjusted for inflation, the average AusIMM member is now earning a salary which is lower than she or $135 $148,174 $148 $167,423 $209,883 $204,301 $159,000 $164,000 Level 1 Level 2 Level 3 Level 4 Level 5 Average member salary Level 1 Level 2 Level 3 Level 4 Level 5 Average member salary $167 $210 $204 $159 $164 Full-time management professionals report working the longest weekly hours with an average working week of 52.6 hours. he was earning in For those working at the most senior level of the minerals professional employment market, the 2014 average salary is lower than that in 2008 even at nominal dollars (not adjusted for inflation), representing a substantial reduction in real wages over the period. Graduate and early career professionals at Level 1 are the only cohort to have seen an increase in average salaries between 2012 and This result should be interpreted cautiously given the small number of survey respondents reporting that they work at Level 1 (8.8 per cent of the 1334 survey respondents). Figure 5 shows average salary levels per person as at July The table breaks down these data by region, professional discipline and commodity. The average salary for a professional working in Australia remains significantly higher than for those working in New Zealand and somewhat higher than for those working in the rest of the world. Average salaries in Papua New Guinea are more than double that of the average members salary. The very small cohort of survey respondents (less than one per cent) who work predominantly in oil and gas earn the highest average annual base salary at $

8 The gender pay gap continues by Juleen Brown MAusIMM(CP), Mining Sector Lead Environment, AMEC Mining and Metals Australia Introduction Gender equality in the minerals sector will have been achieved when people can access and benefit from the same rewards, resources and opportunities regardless of gender. Success in reaching equality will require the achievement of particular goals including: paying the same to women and men for equal or comparable work improving access to leadership roles eliminating gender discrimination relating to family and caring responsibilities. Achieving equality is important not only because it is fair and right but it also bears significant influence on a company s productivity and profitability. To maximise success, all businesses should be seeking to engage the most talented candidate regardless of gender or any other factors that are irrelevant to on-thejob performance. While there has undoubtedly been progress towards gender equality in recent decades, there is still a long way to go. One key issue is the gender pay gap, a topic that is well researched and documented in Australia. This article looks at the trend in the gender pay gap over time. While it is only one indicator of a move towards real gender equality in the workplace, it is an important one that we must address. Movement of the pay gap in the past seven years Figure 1 shows the movement of the pay gap during the past seven years. It shows the pay gap expressed in terms of the percentage difference between average hourly base pay rates for male and female survey respondents. A positive percentage result is a pay gap in favour of men, while a negative result is a pay gap in favour of women. For the first time, this analysis of the gender pay gap includes a total pay gap result for AusIMM members, in addition to reporting the pay gap at each of the five levels of career stages. The total pay gap result compares the hourly base pay rate for an average male survey respondent compared with an average female survey respondent. Introducing this new measure improves the ability to compare AusIMM s gender pay gap data with other published pay gap analyses. The lines in Figure 1 illustrate the gender pay gap that exists at each of the five career levels. These results indicate that men generally receive higher pay than their female counterparts for work at the same career level. The bar in Figure 1 illustrates a more complex story for the total gender pay gap for minerals professionals. The total pay gap results reflect the fact that men are generally paid more than women for work of the same level. In addition, the total pay gap results also reflect the fact that men are generally more successful in achieving career progression (as illustrated in Figure 2). The largest cohort of male respondents to this survey work at Level 5 and nearly three-quarters of men who completed the survey work at either Level 4 or 5. By contrast, the largest cohort of female respondents works at Level 3, with fewer than half of women who completed the survey working at either Level 4 or 5. The combination of women generally being paid less for work at the same level, and women being less likely to hold jobs at more senior levels within the minerals industry combine to create a total gender pay gap that is larger than the pay gap at any of the five levels of work. Figure 1. Gender pay gap by hourly salary. Figure 2. Career level by gender. 8

9 The total pay gap is represented by the columns in Figure 1 which shows that there has been a persistent gender pay gap across the history of AusIMM surveys on remuneration. In 2007, the overall pay gap for minerals professionals was 33 per cent, peaking at 35 per cent in 2009 and This year the total pay gap has fallen back to its lowest ever result at 27 per cent. The total gender pay gap data shows a somewhat volatile, but very persistent and significant gap between the salaries paid to men and women in the minerals professions. These results illustrate that there is still much work to be done to implement change that will consistently reduce the pay gap year on year. As Figure 1 shows, since 2007 Levels 1 and 2 have consistently shown little or no gender pay gap and at times has shown a pay gap in favour of women (the 2012 survey results indicated that women working at Level 2 were earning almost ten per cent more per hour than their male counterparts). A clear gender pay gap emerges during the transition from Level 2 to Level 3 and is never recovered. In terms of Levels 3 and 4, the gender pay gap has increased since 2007 and held steady at about 16 per cent and 23 per cent respectively since There has been a reduction in the gender pay gap at Level 5 (senior leadership and executive roles) since These results are promising but the reasons for this are unclear and cannot be attributed to a specific cause. One potential reason for the fall in the gap may be that male salaries at the peak of the mining boom (2009) were sufficiently inflated that they normalised as the industry began the bust cycle. There were other positive findings in the survey results. Women appear to have outperformed men in terms of promotion during the downturn as illustrated in Figure 3. As Figure 2 shows, however, men are still twice as likely to hold the most senior jobs with 38.2 per cent of male members reporting they work at Level 5 compared with only 16.4 per cent of female members. There has been a small growth in the proportion of women working at Level 5 compared to the 14.8 per cent result in 2010 and this figure is consistent with the survey finding illustrated in Figure 3 that 35.8 per cent of women report they have more responsibility in their jobs this year than they did in 2013, compared with only 25.2 per cent of men. Another interesting outcome from the survey is that the proportion of men working part-time is now approaching that of women (Table 1). The reasons for this growth in male part-time work are not fully understood. It may be that more men were asked or forced to take reduced working hours during the downturn. As the previous article noted, the Professional Employment and Remuneration Survey 2014 asked respondents if they were happy with their hours of work with the results showing that in 2013 and 2014 there was a significant jump in members reporting that they wanted to work more hours, increasing from less than three per cent of members in 2012 to almost ten per cent of members wanting to work more hours in The pattern of part-time work by gender may also be partly explained by a positive trend with men now more likely to be seeking part-time and/or flexible work arrangements for personal reasons. In this light, advocating for part-time and flexible arrangements is no longer a genderbased issue, but rather a work-life balance and equal opportunity issue affecting male and female minerals professionals alike. Although the survey results show a very positive reduction in the gender pay gap at the executive management level (Level 5), it also illustrates that there is still a long way to go to increase the number of women in Level 5 roles (Figure 2). Figure 4 illustrates the relative proportion of men and women who identify that they are working at each career level. This clearly shows that women are in a minority right across the minerals professions and that female representation progressively falls with each level, dropping from 37.3 per cent at Level 1 to only 8.1 per cent at Level 5. This presents a strong case for saying there is still a significant amount of work to be done in retaining females in the industry and minerals professions to make the minerals industry one in which women can maintain satisfying careers. That case is also backed up by external analysis, as discussed below. Comparison with other data The Workplace Gender Equality Agency (WGEA) regularly publishes data on the state of the gender pay gap in Australia (based on average weekly full-time equivalent earnings from ABS data). In their most recent release, the WGEA reports that the gender pay gap across all sectors nationally is currently 18.2 per cent, compared with the mining industry at Male (%) Female (%) Avg all respondents (%) Full-time Part-time Table 1. Part-time workers by gender,

10 23.8 per cent (WGEA, 2014). These results are certainly comparable to the AusIMM survey finding of a 27 per cent total pay gap in The WGEA states that the gender pay gap is influenced by a number of interrelated work, family and societal factors, including stereotypes about the work women and men should do, a lack of women in senior positions, and discrimination (both direct and indirect). Although the influences are broadly applied by the WGEA across all industries, these issues are all ones that can be said to specifically affect women working in the minerals industry. Why push for more female participation and equitable pay? A PwC report commissioned by Women in Mining UK and published this year, Mining for talent 2014 A review of women on boards in the mining industry (PwC and Women in Mining Figure 3. Change in responsibility levels by gender. UK, 2014) collected detailed data on the number of women involved in senior levels of the mining industry globally and critically analysed the impact of these women on their company s performance. The research showed three clear themes when it comes to women on boards: 1. more women on boards in the minerals industry made good business sense (return on assets ranges from -2.9 for all male boards to +6.4 for boards with two or more women) 2. it preserves the social licence (women have made a measurable impact on the level of disclosure as well as the management of the environmental, social and governance issues addressed by those companies) 3. the industry is slow to change (an increase of just two per cent year on year of female board appointments to the Top 100 global listed mining companies). Figure 4. Survey respondents by gender and career level. The two key indicators that were analysed to assess if women have a positive influence in the upper management of mining companies were based around financial performance (both return on assets and enterprise value) and an assessment of environmental, social and governance (ESG) performance. To assess ESG, the study examined the following metrics: water use Bloomberg ESG score community spend UN Global Compact signatories corporate governance. A clear trend throughout this data is that boards which contain women have better disclosure and transparency around these areas. It is clear that improving the statistics of women in upper management and board positions in mining companies will have a positive influence on financial and ESG performance. This can only be done by encouraging the highly skilled and technically capable women that enter minerals professions as graduates to stay in the industry. The reasons that women tend to leave the industry are unsubstantiated, but anecdotally are a result of a number of inter-related work, family, corporate culture and societal factors, including lack of flexible working arrangements, inadequate promotional opportunities, limited or no practical day care providers in remote mining communities and the gender pay gap. References PwC and Women in Mining UK, Mining for talent 2014 A review of women on boards in the mining industry, Workplace Gender Equality Agency, Gender pay gap statistics fact sheet, Workplace Gender Equality Agency, National gender pay gap rises to 18.2 per cent, news article published 14 August wp-content/uploads/2013/02/mining-for- Talent-2014-research-report2.pdf. 10

11 PROFESSIONAL EMPLOYMENT ANALYSIS 2014 SNAPSHOT UNEMPLOYMENT RATE OF 11.2 PER CENT IN THE PAST 12 MONTHS have experienced pressure/ have experienced UNEMPLOYMENT RATE BY GENDER & DISCIPLINE UNEMPLOYMENT RATE BY COMMODITY 11

12 PROVIDING LEADERSHIP AND OPPORTUNITIES FOR MINERALS INDUSTRY PROFESSIONALS The Australasian Institute of Mining and Metallurgy Incorporated by Royal Charter 1955 ABN Ground Floor, 204 Lygon Street Carlton Victoria Australia 3053 Tel: Fax: NOTE ON INTERPRETING THE RESULTS: It is important to note that the results generated by the survey should be interpreted with some caution. It is possible that those AusIMM members who have experienced employment difficulties will have been more strongly motivated to fill out this survey than those who have experienced no change in their employment status. There may therefore be some bias towards adverse employment outcomes. Analysis of the survey results suggests that any such bias is fairly small. Unfortunately, the potential for such bias could only be removed by requiring 100 per cent of AusIMM members to complete the survey or through a survey conducted by random sample.