24/08/2015 - 14:21

Big trends among biggest employers

24/08/2015 - 14:21

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SPECIAL REPORT: It has been a tough year for job seekers in WA, but some new sectors have emerged to keep the state’s employment levels at record highs.

Big trends among biggest employers
LEADERS: Richard Goyder (centre) and finance director Terry Bowen (second right) with Wesfarmers board members at last year’s AGM. Photo: Attila Csaszar

It has been a tough year for job seekers in WA, but some new sectors have emerged to keep the state’s employment levels at record highs.

The July labour market statistics for Western Australia may show total employment at its highest ever level in trend terms, but that ranking belies the dramatic changes going on within the state’s economy.

Population growth and a higher participation rate mean the state’s unemployment numbers are rising, too, with 87,400 people out of work, according to the Australian Bureau of Statistics.

There are very large movements between industries (see table), with healthcare and social assistance now the biggest sector when measured by employees, according to the latest quarterly breakdown.

Mining is softer, while property market activity has bolstered the construction sector.

Almost 1.8 per cent of people employed in the state work for Wesfarmers, which retains its position at the top of the BNiQ Biggest Employers list, having added a few hundred staff since last year.

This month, the company announced a restructure of its operations, amalgamating its three industrial divisions into one.

That would give Wesfarmers’ leadership more room to search for growth opportunities, according to managing director Richard Goyder.

He said the resources slowdown had had minimal impact on the company in WA.

“We’ve got resource businesses, but they’re in NSW and Queensland, so we’re not directly in the resources sector in WA – although we supply chemicals,” Mr Goyder told Business News.

“And our retail businesses are growing, so we’ve expanded Bunnings, Coles, Officeworks, Target and Kmart in WA.

“As a consequence, pleasingly, we’re employing more people.”

The company’s earnings report, released last week, showed retail had been a stronger performer for the company, with food and liquor sales up 3.9 per cent.

Mr Goyder said the national economy had performed remarkably well by achieving 25 years of economic growth.

“The underlying national economy is still in reasonably good shape … the overall economy is pretty resilient,” he said.

But governments would need to let business get on with job creation. “(We need) to deregulate and reform so we’ve got the confidence to invest and employ people,” he said.

“It’s the private sector that’s the real wealth creator.”

Coles’ competitor, Woolworths, too, has put on staff, up by about 750 people.

Digging deep

The big miners, Rio Tinto and BHP Billiton, have come off slightly in overall numbers as tumbling commodity prices forced belt tightening in the mining industry.

Part of that reduction, in BHP’s case, is the spin-off of South32, a major new WA employer.

Contractors to the mining services sector have shed their workforces, most notably Macmahon Holdings and NRW Holdings, as projects dry up, although industry analysts suggest the bulk of the cuts resulting from the falling iron ore price are now done.

Chris Kent, the state director of global recruitment business Hays, said there was good news for gold and nickel producers, which had some vacancies in their Goldfields operations.

Jobs would go to more experienced staff, he said, with recent graduates needing to do something to differentiate themselves.

Alcoa’s workforce was marginally smaller as aluminium prices were softer in US dollar terms.

A spokesperson for Alcoa said the key factors affecting the state’s labour market were the end of the resources construction boom, and slowing growth in China.

Energy, raw materials and labour are the key costs in aluminium refining, with Alcoa drawing a sizeable chunk of the state’s energy supply.

“Compared to the rest of the world, Australian labour costs are high,” the spokesperson said.

“When competing in global markets, high labour costs do impact competitiveness.

“Moving down the cost curve through technology innovation and driving productivity improvements (will) alleviate cost pressures.”

There is some relief, however, with Harrier Human Capital managing director Kelly Quirk telling Business News there was downward pressure on wages.

“(For) any new roles created in the marketplace, salary bandings have now come down about 20 per cent,” Ms Quirk said.

“If you’d advertised that same job two years ago, you’d be (paying) 20 per cent more.

“If you’re currently in a role, it’s not uncommon at the moment for organisations to reband (it).”

That meant people reapplying for roles at reduced compensation levels, a trend particularly visible in iron ore.

Energy has been similarly bleak.

In March, it was reported that staff numbers at the state’s largest LNG players, Chevron and Woodside, would be reduced by almost 2,000 during the next two years as they tighten their belts due to low prices and as projects enter production.

Globally, Chevron is tightening its belt, and consequently has very carefully reviewed its staffing expenses.

Emerging

Locally, Uber has been one of the biggest contributors to jobs growth in the past year, with around 1,500 drivers serving the Perth market.

The US ride-sharing giant doesn’t feature on the BNiQ list, however, as those drivers are engaged as contractors.

However, Business News is aware of a number of former resources industry workers who are now driving for Uber after losing their jobs in the sector.

Hays’ Mr Kent said information technology, construction and healthcare all had high levels of labour demand, a position reflected by the most recent ABS breakdown.

“We’re seeing some structural changes (in healthcare) with the NDIS,” he said.

Structural changes have also taken place in the home care and not-for-profit sectors, Mr Kent said, with increased competition between providers.

Those factors have contributed to the large increase in the number of workers in healthcare.

Employee numbers in the public sector are little changed from last year, with notable reductions at the Department of Finance and Department of Agriculture and Food, according to the Public Sector Commission’s March update.

In fact, the public sector’s total headcount is merely 303 positions lower than 12 months previously, at 138,307.

The Department of Health and Department of Education remain the top two state government employers (and overall), although they have changed order since last year.

WA Police comes a distant third.


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