With the shortage of skilled labour arguably the biggest issue facing Western Australian business, WA Business News hosted a forum to seek solutions. Mark Beyer reports.
With the shortage of skilled labour arguably the biggest issue facing Western Australian business, WA Business News hosted a forum to seek solutions. Mark Beyer reports.
Australia’s unemployment rate fell in October to 5.3 per cent, the lowest level since records have been kept, and Western Australia’s unemployment rate was even lower, dropping to just 4.7 per cent.
These are extraordinary times, with investment booming and many businesses enjoying unprecedented demand.
The flipside of this boom is the increasing difficulty in finding skilled labour – engineers, welders, motor mechanics, bricklayers, chefs, hairdressers, doctors, and nurses are just some of the trades and professions officially in short supply.
Australian Industry Group’s latest construction survey found that recruitment of qualified labour “remains the dominant supply constraint impacting on the industry”.
In total, 74 per cent of firms had difficulty recruiting qualified labour.
Similarly, a recent survey by accounting body CPA Australia found that 61 per cent of small businesses had experienced difficulty in recruiting skilled staff.
The main difficulties were the scarcity of skilled people, the lack of trained apprentices, the poor work ethic among employees, and the lack of people with appropriate experience.
Speaking at the WA Business News skills shortage forum, Hospitality Group Training general manager Ian MacDougall said current conditions were unprecedented.
“Every industry in this room is booming so we’re all competing with each other to drag kids out of schools,” he said.
“I don’t think we have ever had a scenario where every industry is really strong. We are all competing and there are just not enough people.”
Dale Alcock, who runs one of the biggest home building companies in WA, said the State was in “big strife”. Demand for new homes was well above the industry capacity of 18,000 homes per year, he said.
“Over a four-year period we are trying to build 10,000 more homes than we have a capacity to build,” Mr Alcock told the forum.
Skilled Engineering State manager Chris Chalwell, whose firm has more than 2,000 employees in WA, does not expect any abatement in the problem.
“Our thinking is that the skills shortages we are experiencing today will increase,” Mr Chalwell said.
Australian Manufacturing Workers’ Union State secretary Jock Ferguson concurs.
“We hear from employers that over the next five years something like 170,000 employees will leave the manufacturing sector across Australia and we’ve only got something like 40,000 trained to replace them. I think that’s an absolute disaster,” he said.
Chamber of Minerals and Energy director Reg Howard-Smith said the problem extended beyond the trades to professional areas including engineering and metallurgy.
St John of God Healthcare national chief executive Dr Michael Stanford, who oversees 10 hospitals across three States, agrees the problem is widespread.
Dr Stanford said WA needed more than 500 extra doctors, with shortages particularly acute in country towns and outer suburban areas. There also was a shortage of nurses, especially in critical care.
Participants in the skills shortage forum mostly agreed that WA had moved beyond the usual ‘boom and bust’ pattern.
Mr Alcock said this would be reflected in industry costs, which had increased by 1 per cent per month for the past 20 months
“We don’t see that coming back, as traditionally would have been the case,” Mr Alcock said.
Education and Training Minister Alan Carpenter said a lack of action by industry and government in the past had contributed to the current situation.
“We are in a position we should never have got ourselves in,” he said.
“I also think there is a long period ahead where the rubber band is going to be stretched pretty tight.”
Mr Ferguson said the problem could be traced back to the demise of government authorities like the Midland railway workshop and the public works department, which historically had been among the biggest trainers of apprentices.
In contrast, he said many of the big mining companies didn’t conduct training, preferring to rely on group training schemes and contractors.
“I think it should be a condition of major resource projects that they give a commitment to training before they get the nod,” Mr Ferguson said.
He also claimed most labour hire companies “put nothing back into the industry”.
“There has to be some regulation for labour hire companies so they put something back into the industry for training and apprenticeships,” Mr Ferguson told the forum.
Mr Alcock, who has led a number of training initiatives in the building industry, was critical of his own industry’s track record.
“One of the things we are very good at in this isolated State in private enterprise is ripping the guts out of the market so that the margin we operate on is so thin and competitive, there is nothing in reserve for training,” he said.
“That is something industry has to recognise for the future; there has got to be reinvestment back in your people and training for the future.”
Automotive Holdings Group operations executive Peter Thompson said many firms found it difficult to focus on training.
“A lot of the businesses are running very lean, manpower wise, and they just don’t have the resources or the vision to embrace these issues,” he said.
Measures to counter the skills shortage range from increased immigration of skilled labour through to increased training and reform of the school and apprenticeship systems (see accompanying articles).
In the short term, most of the industry participants agreed that extra immigration is needed to alleviate some of the current pressures.
However, given the national and international dimensions of the skills shortage, Australian firms are already struggling to recruit appropriate skilled workers from interstate or overseas.
Other short-term measures, which have already been adopted by the State Government, include a commitment to reskilling and upskilling programs for people already in the workforce.
Mr Carpenter said government efforts to boost training had been reflected in a big increase in the number of people in apprenticeships and traineeships, up from about 19,000 in the late 1990s to about 26,000 presently.
The increase has primarily been in traineeships but there has also been some increase in the number of people going into traditional apprenticeships.
Mr Carpenter has also highlighted the increase in the number of applications for places at TAFE colleges.
Just over 15,000 people have applied this year for TAFE courses, up 6.5 per cent on last year and 25 per cent on 2002 figures.
Mr Alcock believes a medium- to long-term solution for WA is the concept of a ‘go west’ or ‘WA shop’ promotion in Melbourne and Sydney or even internationally in places such as England, New Zealand and South Africa.
The ‘WA shop’ would comprise a physical shop front supported by an Internet site, with joint funding by government and industry.
The promotion would be more diverse than simply a tourism shop and would also include promotion of lifestyle, investment, business, employment, exports and imports.
Mr Alcock has suggested a catch-cry of “…come visit and stay a lifetime” under the ‘live, work, play’ line.
“This initiative would need to be supported for at least a 10-year period,” Mr Alcock said. “It’s no quick fix, however I believe we are the best kept secret.”
Skills Shortage Action Plan
- Increase immigration of skilled workers.
- Boost re-skilling and up-skilling programs.
- Reform the apprenticeship system to make it more flexible and responsive.
- Promote trades as a desirable career path.
- Boost maths and science in schools.
- Holistic approach promoting Western Australia as a place to visit and live.
Snapshot
- Education and Training Minister Alan Carpenter: “I also think there is a long period ahead where the rubber band is going to be stretched pretty tight.”
- Dale Alcock Homes principal Dale Alcock: “That is something industry has to recognise for the future; there has got to be reinvestment back in your people and training for the future.”
- Chamber of Minerals & Energy director Reg Howard-Smith: “Kids just don’t study maths and science.”
- Automotive Holdings Group operations executive Peter Thompson: “One of the issues we have in the motor industry is our image and attracting good quality people into the industry who see a career path.”
- St John of God Healthcare national chief executive Dr Michael Stanford: “In the short term we don’t think there is an alternative to some overseas recruitment.”
- Australian Manufacturing Workers’ Union State secretary Jock Ferguson: “I think it should be a condition of major resource projects that they give a commitment to training before they get the nod.”
