There's A Race On To Grab The Best Staff From Collapsed Resources Contractor Forge

Getty/ Ian Waldie

Large mining companies are circling the Forge Group in Western Australia trying to pick up the best staff from the collapsed contractor.

Industry sources say project managers are in high demand because the work Forge had been doing still needed to be completed.

Companies luring key staff from Forge had a better chance of winning the work it left on the table.

With more than 1,700 employees, Forge had contracts worth hundreds of millions of dollars with big name customers including Rio Tinto, BHP Billiton and Gina Rinehart’s Roy Hill Holdings

Peter Dyball, the principal of Pit Crew Management Consulting Services, said the projects Forge had been working on still need delivering, which meant a work force was essential.

“I would anticipate that quite a few former Forge workers will end up back on the same projects working for an alternate contractor,” he said.

“Given the uncertainty of Forge’s position over the past couple of months, my expectation is that a lot of (Forge’s) clients would have had contingency plans well developed. These would include identifying specific individuals as well as alternate contracting companies.”

Mr Dyball said major projects landscape in Australia were undergoing a rebalancing, a change in the focus from capital investment in new projects to operations.

The reduction in investment levels is currently leaving many service providers, contractors and suppliers in a challenging market in the short term.

“Suppliers and contractors will have to tighten their costs, and ultimately, some will not survive,” Mr Dyball said.

“Forge was in a difficult position of being very extended from a range of perspectives: geographically, in terms of human resources and expertise, as well as financially.

“It would seem that quite a number of their lump-sum contracts have had significant budget over-runs, the banks have been unwilling to provide further funding and they’ve gone under.

“The unfortunate flow-on is that there is no money for employees’ entitlements, which also means there will be lots of suppliers and sub-contractors who will also take a financial haircut, maybe even go out of business themselves.

“I don’t think they’ll (Forge) be the last before the market cycles up again.”

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