At the height of the resources boom in early 2008 the industry experienced a skills shortage across all categories of employees and came under pressure to increase remuneration to meet rising salary demands to attract and retain employees.

With commodity prices falling sharply in the second half of the year, the reverse in fact occurred, with the industry scaling back projects and development leading to large scale redundancy programs. OZ Minerals was not immune to this, as detailed above, and by January had removed 1,212 employee and contractor positions from the business.

However, OZ Minerals still believes that good people are critical to its business and continues to be committed to the attraction and retention of employees with key professional skills.

While remuneration is not currently available as a method of reward with the OZ Minerals Board ratifying a salary freeze and no bonus payments in 2009, it is more important than ever to focus on non-cash recognition and ongoing performance management.

As the company aligned performance review periods at the end of 2008, it began implementing a new performance review system. The system aims to link employees’ key performance indicators back to the business strategy. It also ensures that expectations of employees are clearly outlined and understood by both managers and employees, encouraging managers to act as role models and support their teams. A key part of this is ensuring that employees learn and grow in their roles and receive ongoing coaching and feedback. OZ Minerals will continue to roll this program out through 2009.

Through the integration in the second half of 2008 of the two former business, the Human Resources team developed common people-related policies, for example recruitment, relocation and employee insurances. While there will be some variation between policies at operations taken into account local situations and legacy benefits, the intent is to have consistent minimum standards across the business. Significant work in this area was achieved during 2008, however this is ongoing and will continue during 2009.

The turnover rate for OZ Minerals for the 12 months to 31 December 2008 was 15.38 per cent. The turnover for operations varied from 30 per cent at Group Office to 9.4 per cent at Rosebery. Redundancy and resignation accounted for the majority of employees leaving the business. A breakdown of turnover by age and gender is as follows (Figures 1 and 2).

There were numerous other initiatives to improve attraction and retention rates and minimise turnover across the company. Our Century operation made a commercial decision to end the contract mining arrangement with Downer EDI in March and instead employ the same workforce directly through OZ Minerals. One of the goals in taking this action was to reduce the level of turnover in the previously contracted workforce from 40 percent to the direct employee turnover rate of approximately 20 percent. Having a direct relationship between the mining operators and site management has improved communication processes across the operation. Transfer of the workforce was completed in October 2008.

Several of our operations, including Century and Prominent Hill, offer employees’ families the opportunity to visit the employees’ operation and gain a better understanding of their family members’ work environment. Ensuring that amenities at our fly in/fly out operations are comfortable and clean is important, and this year we upgraded facilities at both Golden Grove and Prominent Hill to this end.

At our Group Office in Melbourne a number of Career Development Planning Workshops were offered to employees to help them recognise their personal capabilities and identify potential career paths within the organisation. Participants were provided with feedback during the workshop and received coaching and guidance from the workshop leader and their manager after the conclusion of the workshop to set a career plan within the business.

A pilot program at our Sepon operation is the Home Loan Assistance Scheme introduced to support local employees to purchase, build or renovate their own home.

The Scheme is open to all permanent employees with more than two years continuous service and who meet a number of other selection criteria. In the long term it is expected that a number of home loans will be offered for use in Vientiane, Savannkhet and Vilabouly however the initial pilot is restricted to houses in the capital of Vientiane where land titles exist. In the first year a maximum of 50 home loans were offered and it is expected that this number will increase to 200 per annum by 2013.

The Scheme operates with the ANZ Bank in Vientiane with the amount of capital subsidy offered by the company based on the grade of the employee at the time of their application. Although the loan is an employee benefit, it is essentially an arrangement between the bank and the employee and OZ Minerals has no influence in any employee securing a loan from the bank. The company makes the capital subsidy assistance payment to the bank, once an approved loan is advised to the Human Resources department.

Employees are selected to participate in the scheme through a ballot which is conducted twice per year. Specific housing covenants are applied by the bank relating to basic amenities which must be included in the house. The company expects that any employee who has received a loan subsidy will continue to work with the company for at least one additional year.

The OZ Minerals’ core values – respect, integrity, action, results - are designed to underpin and guide our employees’ behaviours in the workplace. Several operations used the values roll-out last year as an engagement activity holding operation-wide workshops to articulate the behaviours for their operation that bring the values to life. Our goal is that all employees can recognise the behaviours and actions that reflect the values, from strategy development and decision making to their approach to day-to-day operations.

In November 2008, the company rolled out its inaugural Employee Perception Survey. The survey, initiated by CEO Andrew Michelmore, was designed for employees to direct their opinions on a range of issues including safety, health, environmental, facilities and services, management and decision-making, directly to the CEO and senior management in a confidential and open manner. The company plans for the perception survey to be repeated in the future, the results of which can be built on and compared, ultimately allowing us to benchmark changes and improvements in our organisation.

Good response rates were obtained with the results showing that OZ Minerals has a healthy organisational culture characterised by a strong sense of commitment to the company on the four engagement indicators of job satisfaction, motivation, commitment and advocacy.

Results and issues were targeted for each business area and management have commenced the process of delivering the findings back to their teams, prioritising issues for response and developing action plans to address them.

Anecdotal evidence suggests that the difficult operating environment and pressures on the business anecdotally had a galvanising effect on the organisational culture by early 2009 as employees were engaged in the efforts to ensure the ongoing viability of the business.