Delivering Strong Financial Results Through Low Turnover

As a follow up to my post in January, “How We Staffed a New Uranium Mine”, I want to share the financial results delivered  by my HR Department and the 24% employee turnover (TO) rate from the recent hiring campaign in 2013.
It is  commonly accepted that each job separation costs a company between 16% and 20% of the employee’s annual salary (16% for <$50,000 and 20% for >$50,000).  Some studies have even shown that TO cost can run as high as 50% to 200% of an employee’s annual salary.  I chose to go with the more conservative 16-20%.
I analyzed our  hourly employee population of 42 and calculated our average TO cost per employee to be $7,194 and rounded it down to an even $7,000.  Our  average TO cost per employee with the salaried population included is $9,440.  I again chose to be conservative and use the lower hourly number of $7,000 in the table below.

Total Population
Seps %
Seps #
TO Cost/per
Total
Svgs from Act
Actual
24%
13
$  7,000.00
 $   91,000.00
   $                   –
Projected
80%
48
$   7,000.00
 $  336,000.00
 $  245,000.00
Projected
90%
54
$   7,000.00
 $  378,000.00
 $  287,000.00
Projected
100%
60
$   7,000.00
 $  420,000.00
 $  329,000.00
The 13 separations we had in 2013 cost  a total of $91,000.  As can be seen in the last column, Svgs from Act, we saved between $245,000 and $329,000 by having a significantly lower TO rate than expected.  Along with support from the management staff at the mine, I attribute the much of the low TO rate and resulting cost savings to the successful design and execution of the HR Department’s recruiting and hiring strategy!  

How We Staffed a New Uranium Mine

Last year I started a series of posts describing how I went about developing and executing the strategy to staff the new uranium mine my company recently built.  I decided that I don’t like the series and decided to just write up a new single post instead.

Here it is…

I was given the task to hire 50 employees in south central Wyoming to staff and operate our in-situ uranium mine, the newest – and one of only six – in the US. Because of the permitting process and the uncertainty of timing, I was given only two months to fill 50 jobs. In addition to the short time frame, the local job market was very tight and the skill-sets needed to staff the mine were very specialized and rare.

So I developed a three part strategy.

First, I identified and developed relationships with the key people in the communities – these included city and county politicians, the heads of the workforce centers and business councils, media/journalists, education leaders, chamber leaders, etc. I made a lot of phone calls, knocked on a lot of doors, and visited the communities telling people the Ur-Energy story. I gave formal presentations in front of council meetings and met with people in their offices and in a coffee shops. I continued to keep them in the loop sharing new news by emailing, calling or visiting with them when I was in town. This helped the folks in the communities put a face to the company and engendered their strong support.

Next, I had to determine the local skill-set inventory, which I was able to accomplish, in large part, through my relationships with the key community members. I discovered that the current major employers in the area had jobs with skill-sets that could transfer to our operation. I also was able to determine the best way to advertise the job through some trial and error along with local input and advice. Radio was by far the most effective means and generated nearly 90% of our candidate flow.

Finally, I designed an efficient in house hiring system that enabled us to process the nearly 300 candidates and 50 new hires. I started by running radio ads designed to reach currently employed candidates. I backed that up with newspaper ads and Workforce Services opened up their offices for s series of job fairs throughout the month and a half. I trained our supervisors how to conduct effective interviews and made them practice by role-playing. I also set up a candidate tracking system, local drug screening process, background screening, and established an on-boarding procedure.

The end result was completing the hiring campaign ahead of schedule and right on budget. Hiring 50 candidates who had the skills or transferable skills to do the specialized jobs needed at the mine. In addition, the turnover rate was 24% compared to the 90-100% expected by management from their previous start up experience.

Developing the Strategy for Staffing a New Mine – Establish Contact With Employment Agencies

The second thing I did, while continuing developing relationships in the communities, was to focus in on connecting with the employment agencies in the communities from which we were going to hire.

I simply contacted the Rawlins and Riverton Wyoming Department of Workforce Service offices and set up face to face meetings with the respective directors.  I also met with the regional director so that she understood our employment needs and could help.  I met up with these good folks many times throughout the process either by dropping in on them when I was in town or when I was attending the same community meetings they were also attending.  I also kept them in the loop by sending them copies of our news releases so they could more easily monitor our progress as we went through the permitting process.

This effort established trust and credibility in me with the folks at the employment agencies which was very valuable when we officially launched our hiring efforts. As an extra bonus, I can call these people friends!

Developing the Strategy for Staffing a New Mine – Connect with the Communities

In the fall of 2012, I was ‘officially’ tasked with developing a strategy for recruiting and staffing our newly licensed uranium mine located in south central Wyoming.  When I say ‘officially’ I mean it was time to launch the strategy I had been developing and working on for several years.

I actually started developing the recruiting and hiring strategy a few years prior to my having to launch it.  We had been working on the permitting and licensing of the mine for several years but did not know exactly when we were going to receive the final set of permits that would allow us to start the construction and operation activities.  So with the luxury of time, I set out.

The first thing I did was make connections with people in the communities where our employee base would be located.  In this case, Rawlins, Bairoil, Wamsutter, Riverton, and Lander.  I focused most of my attention on Rawlins, Bairoil and Wamsutter because those communities are 45 to 15 minutes away from the mine site while Riverton and Lander are a little over an hour away.

I started the process of connecting with the economic development organizations in Rawlins by learning when they held their meetings and attended them.  I made sure I looked the part by arriving in Rawlins in the white company Ford F-150 with Wyoming plates (bad form showing up in Wyoming as a “greenie” with green Colorado plates!)  and wearing a company shirt and my Wranglers and roper boots.   The Rawlins community is a small Wyoming town with the majority of the population employed in the extractive industries and are predominately hard working blue collar.  It’s important to be deferential and try to fit in and not come off as a big shot big city type coming in to save them.

When attending these meetings, I simply introduced myself to everybody I could and explained who I was and what my company’s future hiring plans were.  This, of course, generated a very positive reaction leading the people I met to introduce me to other local influential officials.  I soon built up a solid network of influential people in Rawlins, Bairoil, and Wamsutter and kept in touch with them by sending them press releases of our progress, emailing them with company updates, and making presentations at city council and annual local “roundtable” meetings.

In addition to attending these meetings, I made a lot of phone calls and knocked on a lot of office doors.  This effort introduced me to a lot of people who would later help with my recruiting efforts and with gathering public support for the company.  I also made a lot of new friends.

I was able to build a level trust with the influencers in the communities.  This was important because they have lived through many “boom and bust” periods where companies swept in with big promises and swept out when things got tough, leaving the communities holding the bag for the infrastructure costs they incurred to accommodate the influx of employees.

Initially connecting with the communities established the critical foundation for the next steps in the strategy for staffing the mine.  Steps I will cover in a series of future posts.

Staffing a New Mine From Scratch – Introduction

I think I’m safe claiming that not a lot of HR professionals have been responsible for staffing a new mine from scratch – much less a new uranium mine.  There are currently eight (including ours) uranium mines operating in the United States with the most recent one, before ours, coming on line two years ago in Texas.  When we were finally given the green light to start construction of the mine in October of 2012, I had to start the implementation of the plan I had been working on for four years.  I want to share the steps I took in a multi-part series of posts, starting with this introduction.

It took a lot of work laying important foundations during the four years because there was no HR department when I started.  Everything basically was built from scratch along the way.  There are also not a lot of experienced uranium miners to recruit and hire.  It was a challenging undertaking but that’s what made it rewarding and interesting!

I’m very proud of what we accomplished and want to share it here on Hard Hat HR.  Hopefully you will find it interesting and helpful if and when you need to staff a new and remote start-up operation.  A lot of what we did can be applied to other industries but you will discover much of what we were able to successfully implement will only work in smaller rural communities – “Hard Hat” communities if you will.