For this week's post I thought that I would take a personal journey through the post-boom mining landscape as a new consultant.
I, like many others in the industry over the past two or three years, was made redundant at the end of April this year. It was an event that I had anticipated for at least a year, so to that extent it was not a surprise.
Just before my employment ceased, I read an article by Steve Heather of Mining People International http://steveheather.com.au/why-it-is-essential-that-you-remain-firmly-optimistic it was both thought provoking and humourous, always a good combination I find, and to reference both Andrew Forrest and Bob Brown in the same article and for a shared characteristic, is quite an achievement. The bottom line is actually best summed up by a quote from Bob Brown, “You can be optimistic or you can be pessimistic – take your pick.” I choose to be optimistic and see my redundancy as an opportunity.
I, like many others in the industry over the past two or three years, was made redundant at the end of April this year. It was an event that I had anticipated for at least a year, so to that extent it was not a surprise.
Just before my employment ceased, I read an article by Steve Heather of Mining People International http://steveheather.com.au/why-it-is-essential-that-you-remain-firmly-optimistic it was both thought provoking and humourous, always a good combination I find, and to reference both Andrew Forrest and Bob Brown in the same article and for a shared characteristic, is quite an achievement. The bottom line is actually best summed up by a quote from Bob Brown, “You can be optimistic or you can be pessimistic – take your pick.” I choose to be optimistic and see my redundancy as an opportunity.
I was fortunate in that I was given three months’ notice of my impending redundancy, an opportunity and a privilege that many others who have been made redundant have not had. My wife and I had already planned a trip to the UK to attend the 35 year reunion of my graduate year from the Camborne School of Mines, in Cornwall UK. Yes, Poldark country!
By the time that the March reunion came around, I had already been contemplating my options post-redundancy and was seriously contemplating doing what I had done on the last occasion that I was made redundant in 1999, and set up in business as a consultant. On the positive side I now have another 16 years’ experience, a larger and stronger network and I am now better located, being based in Perth. Back in 1999, I was living in Bendigo, not exactly the center of the mining universe these days, although it does have a glorious past. However, against these positives it must be acknowledged that the environment that I find myself in is very much harsher than it was in 1999. There is a widely reported "capital strike" and those with money are desperately hanging on to it in the hope that they can survive long enough that a more sympathetic environment will allow them to raise additional funds to pursue their projects, whilst those without funds are facing oblivion. The bottom line is that very few companies are spending money on consultants.
One of my close friends from CSM, Nick Tovey, also attended the reunion and it was great to enjoy his company again for a few days. When I spoke to him about considering becoming a consultant he asked me, "are you serious about that?" When I responded that I was, he made arrangements for me to meet with one of his fellow directors in the consultancy for whom he works. Whilst this consultancy has had a strong presence in Africa and Eastern Europe, it has done little work in Australia and has no representation here. Nick thought that perhaps there was a win-win outcome to be had.
I had the meeting with Nick’s colleague and following my return to Australia drafted a proposal which I submitted to him. The proposal was positively received and negotiations have progressed to the point where I am hopeful of a positive outcome in the next couple of months. I will report further on this, as and when it reaches a conclusion.
In the meantime I need to deal with the reality of trying to establish a business in my own right. It is not an insubstantial task and certainly one that I do not underestimate. Establishing a presence on the Internet and on social networks is the easy part. I have always been interested in computers and technology and found it easy to set up this website, although I did take the easy route and used Weebly, even though I am learning web development in my spare time.
The next phase will involve endless phone calls, knocking on doors, doing a lot of talking and drinking a lot of coffee. I anticipate that those that are prepared to take the time to talk will also be telling me that they do not have the funds to employ anyone at this time. However this investment of time and effort is, in my mind worth it, because when those companies eventually do start spending money again they are going to need people like me and it is likely to be more cost-effective; at least initially, to engage me on a part-time basis than to take on a full-time employee with all that that entails until they have certainty that their project has legs.
Whilst my first consulting role has not yet arrived, one of the issues that I am currently grappling with is exactly what to charge?
Like many in the industry, across all work categories I have been extremely well-paid in recent years, a good example of the law of supply and demand. Now the pendulum has swung and supply well outstrips demand and it is difficult to establish what the new "norm” is for my type of work. I know that I cannot expect the same level of remuneration that I have enjoyed in recent years but how much less is a big unknown. This is further complicated for me as a consultant because; as yet, I have no guide as to how much of my time I will be working. For a given level of desired income, it makes a significant difference whether you work 25%, 50% or 75% of the available time. If one assumes that in the current environment I will work for only 25% of the time, this results in a rate that many clients may consider to be excessive in the new mining world and choose not employ me. On the other hand, if I assume 75% utilisation, which results in a lower daily rate and then only achieve 25% utilisation, my earnings are going to significantly undershoot my target. I will of course figure it out and I think the key to opportunity is to be flexible.
Notwithstanding the somewhat dismal state of mining at present, I am optimistic about the future, both mine and the industry’s.
By the time that the March reunion came around, I had already been contemplating my options post-redundancy and was seriously contemplating doing what I had done on the last occasion that I was made redundant in 1999, and set up in business as a consultant. On the positive side I now have another 16 years’ experience, a larger and stronger network and I am now better located, being based in Perth. Back in 1999, I was living in Bendigo, not exactly the center of the mining universe these days, although it does have a glorious past. However, against these positives it must be acknowledged that the environment that I find myself in is very much harsher than it was in 1999. There is a widely reported "capital strike" and those with money are desperately hanging on to it in the hope that they can survive long enough that a more sympathetic environment will allow them to raise additional funds to pursue their projects, whilst those without funds are facing oblivion. The bottom line is that very few companies are spending money on consultants.
One of my close friends from CSM, Nick Tovey, also attended the reunion and it was great to enjoy his company again for a few days. When I spoke to him about considering becoming a consultant he asked me, "are you serious about that?" When I responded that I was, he made arrangements for me to meet with one of his fellow directors in the consultancy for whom he works. Whilst this consultancy has had a strong presence in Africa and Eastern Europe, it has done little work in Australia and has no representation here. Nick thought that perhaps there was a win-win outcome to be had.
I had the meeting with Nick’s colleague and following my return to Australia drafted a proposal which I submitted to him. The proposal was positively received and negotiations have progressed to the point where I am hopeful of a positive outcome in the next couple of months. I will report further on this, as and when it reaches a conclusion.
In the meantime I need to deal with the reality of trying to establish a business in my own right. It is not an insubstantial task and certainly one that I do not underestimate. Establishing a presence on the Internet and on social networks is the easy part. I have always been interested in computers and technology and found it easy to set up this website, although I did take the easy route and used Weebly, even though I am learning web development in my spare time.
The next phase will involve endless phone calls, knocking on doors, doing a lot of talking and drinking a lot of coffee. I anticipate that those that are prepared to take the time to talk will also be telling me that they do not have the funds to employ anyone at this time. However this investment of time and effort is, in my mind worth it, because when those companies eventually do start spending money again they are going to need people like me and it is likely to be more cost-effective; at least initially, to engage me on a part-time basis than to take on a full-time employee with all that that entails until they have certainty that their project has legs.
Whilst my first consulting role has not yet arrived, one of the issues that I am currently grappling with is exactly what to charge?
Like many in the industry, across all work categories I have been extremely well-paid in recent years, a good example of the law of supply and demand. Now the pendulum has swung and supply well outstrips demand and it is difficult to establish what the new "norm” is for my type of work. I know that I cannot expect the same level of remuneration that I have enjoyed in recent years but how much less is a big unknown. This is further complicated for me as a consultant because; as yet, I have no guide as to how much of my time I will be working. For a given level of desired income, it makes a significant difference whether you work 25%, 50% or 75% of the available time. If one assumes that in the current environment I will work for only 25% of the time, this results in a rate that many clients may consider to be excessive in the new mining world and choose not employ me. On the other hand, if I assume 75% utilisation, which results in a lower daily rate and then only achieve 25% utilisation, my earnings are going to significantly undershoot my target. I will of course figure it out and I think the key to opportunity is to be flexible.
Notwithstanding the somewhat dismal state of mining at present, I am optimistic about the future, both mine and the industry’s.
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