Macro environment

The managers may use Political, Economic, Social issues, Technological, Legal and Environmental issues (PESTLE) to analyse and describe the macro-environment that the mine faces. These variables, each on its own, may shape and directly influence the skills shortage (Lussier 2003:47-50, and Johnson & Scholes 2002).

(a) Political variables

Every organisation has both internal and external politics. The internal politics like team jealousies, cohesiveness, and personal interests occur in all departments and must be considered and managed by stakeholders (Sharan 2003:136). The external politics refer to those which the organisational stakeholders do not control. Government-oriented policies and practices tend to focus on formal rules, and therefore, the organisation is not likely to function well in a regulated or non-market-based environment. According to Rasool (2010:43), the major reasons that leads to loss of skilled South Africans include crime, decline in service delivery, poor quality of life, unhappiness with the political situation, declining education standards and inadequate government health care (Bailey 2003:235).

(b) Economic variables

Agriculture and mining, as primary sectors, have traditionally formed the backbone of the South African economy but have been experiencing a rapid decline as important contributors to the national output, lately. They are both particularly sensitive to changes in the value of the domestic currency (Doole & Lowe 2001:15-16). Mining, in particular, has to adapt to the risk of currency appreciation, declining of gold or platinum price, rapid depletion of ore reserves and increase of operational costs, resulting into retrenchments and downscaling. However, the mining industry still occupies the central position of the South African economy, evidenced by its consistent domination of national export earnings, its provision of direct employment to well over 400 000 people and the fact that it accounts for more than 40 per cent of the market capitalisation of the JSE Securities Exchange South Africa (Fauconnier 2004:11).

Rasool et al. (2012:13) believed that the state of the economy may be the reason why many skilled people intend to leave the country. The high rate of inflation and other economic factors such as of appreciation of foreign currency, interest rate and fluctuation of the exchange rate erode savings and create a considerable degree of uncertainty in the future. Rogerson and Rogerson (2000:49) reported that 74% of people who left the country were unhappy with the level of taxation, and 71% were unhappy with living costs.

(c) Social variables

South Africa is a conglomeration of different ethnic groups, each in itself with a distinct culture. Therefore, there is a growing need for the fulfilment of a culture of social responsibility by the organisation towards the community in which it is situated. Throughout its existence, the mining industry has strived for the pursuance of a quality life in the broader community by being one of the main providers of employment to illiterate workers locally and also to immigrant workers from Lesotho, Mozambique and other neighbouring countries. Unfortunately, the mining employees, like the wider South African population, have inevitably been exposed to HIV/AIDS and as a result, the

industry identified the virus as a major threat; considerably more than a decade ago (Fauconnier 2004:9-11).

Mine closures or staff reductions can negatively impact on a community’s and government’s perception of a mining organisation. Therefore, a balance needed to be struck between cost optimisation and environmental responsibility such as building houses, schools, hospitals and sports facilities for its employees as well as social investment programmes, in the form of sponsorships and bursaries for skills development (Robbins & Decenzo 2001:57-58).

A number of social factors such as the potential to increase the standard of living have a tendency to increase the flow of workers into the country of interest. Some social factors include the ageing population of workers, language barriers, access to housing and education, behaviours and cultures of workers. Most of these factors make many migrant workers feel socially excluded.

(d) Technological variables

Global markets, on-going technological change together with other rapid changes in the external business environment make the world more complex, have an impact on organisations’ products or services and require change in traditional management (Platzek, Pretorius & Winzker 2010:477). Technology is continually being developed, with an increasingly important role in the mining sector for productive processes as well as value adding activities, resulting in the need for a high level of technical skill due to increasing sophistication of equipment and machinery, changes to entry barriers in the market, and changes to financial decisions like outsourcing of critical and scarce skills. The varying technological environments of different countries affect the designing of products. In the USA, and many other countries, for example, electrical appliances are designed for 110 volts, but when these are made for India, they have to be 220 volts. In the modern competitive age, the pace of technological changes is very fast (Cronje, Du Toit, Marais & Motlatla 2003:97-99).

The changes in the shortage of skills may be caused by structural changes, new products, technology and workplace arrangements (Rasool & Botha 2011:3). Thus, according to Richardson (2007:9) these skills are specifically for those occupations and usually take years to acquire them. This explains the on-going concern of skills shortage. Sabourin (2001:5) reported that skills shortages for all professionals increase gradually with the expansion of the plant size. It follows then that technological change is positively related to the skills shortage, meaning that an increase in technology results into an increase in skills shortage.

The South African gold mining sector is faced with the cultural trend of increased automation in underground mining, where work is done by robot machines with computer guidance or even operated from the surface, because intensive operations are too costly at ultra-depths.

(e) Legal variables

Organisations must deal with unfamiliar political systems when they go international, as well as with more government laws, policies and regulations. The changes to legislation may have impact on mining costs, general employment, access to materials, quotas, resources, imports/ exports, taxation etc. The recent introduction and amendment of various legislation and regulation acts (such as the Mining Charter, the Basic Conditions of Employment Act, the Relations Act no. 66 of 1995 and the Employment Equity Act no. 55 of 1998 and others) have placed an enormous pressure on the South African mining organisations. This meant they had to conform and move towards fully representative organisational structures, in order to be granted their periodical mining licence. In an attempt to accelerate this process, for example, various organisations in South Africa are embarking on action and black empowerment programmes to develop historically disadvantaged groups and to integrate them into the existing organisational culture (Daft 2010:104-105, and Nieman & Bennett 2006: 246).

According to Hartman and Mutmansky (2002:26), the laws applicable to the mining industry may be categorised into:

• Consumer laws: These laws are designed to protect customers against unfair practise such as deceptive advertising of the product and distort the demand side in order to increase the share value (Leary 2005:1149).

• Competition laws: These laws are aimed at ensuring fair competition and the free flow of truthful information in the marketplace such as protecting small firms against bullied by larger firms and ensuring customers are not exploited by firms with monopoly power (Leary 2005:1147-1149).

• Employment laws: These laws are the set of rules and regulations that regulate the dismissal of workers, working hours and minimum wages. Their main aim is to protect employees against the abuse of power by managers (Kugler & Pica 2003: 3-4).

• Health and safety legislation: These laws are aimed at ensuring the workplace is as safe as is reasonably practical. They cover issues such as training, reporting accidents and the appropriate provision of safety equipment (Mine Health and Safety Act of 1996).

The government intervention to address inequality and skills shortage in the workplace was seen as the reason why people took early retirement and intended to leave the country. Rasool and Botha (2011:2) felt that apart from the shortage of skills, factors like affirmative action and employment equity also contributed to unemployment. With regard to Affirmative action, many skilled people were affected in particular Whites, who felt that the government did not appreciate their talents or skills. The results of a survey of the Southern Africa Migration Project reported that approximately 83% of White people and 20% of Black people opposed the government’s affirmative action policy (Rasool et al. 2012:13, and McDonald & Crush 2002:40). They turned to emigration.

(f) Environmental variables

A social phenomenon of the industry sometimes causes disturbances in the socio- economic prosperity levels in the community, thus creating a gap between the expectations of the masses and the economic reality of the industry. Mining by its very nature requires that land, air and water systems be disturbed, and end up becoming pollutants (Hoskin, Bird & Stanley 2000). This entails accusations of environmental damage and risk of working in a mine. The risks of working in a mine are of more concern to the workers in the industry than to the public at large. Dusts and noise for example, which are most of the time hazardous hygienically, are produced by a lot of mining activities. The challenge for the mining industry is to find, extract and process mineral resources with the least possible environmental disruption. This impact has led to most of the world's nations adopting regulations to moderate the negative effects of mining operations. For instance, certification of mines with good practices occurs through the International Organisation for Standardisation (ISO) such as ISO 9000 and ISO 14001, which certifies an auditable environmental management system.

Van Der Veen and Strongman (2003:18) said that sustainable development in the mining sector requires projects that are financially viable, environmentally sound, and socially responsible, implemented with sound governance (not only organisations but also communities and Governments) and have lasting developmental value, especially at the community level. The mining industry thus endeavours to align its operational culture with the World Bank Draft Environmental, and Health and Safety Guidelines for Precious Metals and continual impact assessment, as required by the certification process. One of the certification requirements is to adopt an expanded range of protective measures (MacLeod 2004:3) that include:

• sensitive treatment of the land during exploration;

• environmental and aesthetic management of land under development;

• environmentally sustainable production procedures during the mining and metallurgical processes; and

• decommissioning and reclamation practices aimed at restoring the land.

The greatest environmental issue associated with gold mining is the disposal of a significant amount of waste removed from the mines which end up as dust and water pollutants (Robbins & Coulter 2002:98). Therefore, organisations are social phenomena which exist within a wider social context. Treuren (2009) reported that evidence of the damage resulting from climate change was accumulating and businesses were feeling pressure to adopt environmentally friendly workplace practices. These environmental pressures created four distinct types of skills shortage challenges.

• There would be an enormous demand for research and development of environmentally friendly technologies. The world will need a generation of scientists, engineers, policy makers and managers trained to find better ways of doing things.

• Organisations would start the process of dismantling old, inefficient technologies and replacing them with new, environmentally-friendly approaches. Business will need people with the right knowledge to implement and maintain new environmentally-efficient business practices.

• Organisations’ expertise in some areas of climate-change management, such as renewable energy research, engineering and environmental management would be in great demand globally. This would increase competition for these workers, regionally and globally; a workforce already too few in number to meet local needs.

• There would be a shortage of Human Resource expertise in the management of organisational change and workforce retention.

Treuren (2009) further argued that these four shortages were workforce planning problems which needed to be faced by the business, government and education sectors working together to develop knowledge and skills needed for the future. Lastly, as a result there will be a shortage of human resource expertise in the management of organisational change and retaining of skilled workforce.