Consolidation continues among major employers

Big businesses are employing an increasing share of the WA workforce, while the services-oriented economy maintains its growth, the latest BNiQ Biggest Employers survey has uncovered.

Jobs growth at Western Australia’s 10 biggest companies more than doubled the wider employment market over the past 10 years, as the state’s workforce continued to move from being predominantly blue-collar, to having more white-collar workers.

The top 10 companies, led by Wesfarmers, Woolworths and Rio Tinto, employed more than 99,000 people in 2016, according to the latest research for the BNiQ Biggest Employers list.

And while the combined total is down slightly from 102,000 in the previous survey (August 2015), due largely to the economic slowdown and cutbacks, these companies  employ 55.3 per cent more staff than they did a decade ago.

That compares with an increase in total employment of 24.1 per cent over the same time period, with 1.32 million Western Australians in jobs as at August, according to the most recent in-depth data available from the Australian Bureau of Statistics.

In addition, these big operations are now employing a larger proportion of the state’s population, with the top 10 accounting for 7.5 per cent of employed Western Australians, up from 5.9 per cent in 2006.

Growth in second tier of major companies has been more subdued, however, with the top 25 biggest employers having a workforce of 135,000 – about 32 per cent higher than in 2006.

Perth-based and ASX-listed Wesfarmers has again topped the BNiQ list, with staff of nearly 25,000 at its Coles supermarkets and Bunnings hardware business.

Employment growth over the decade has been relatively minor, however. In 2006, Coles Myer employed 17,061 people, while Wesfarmers, prior to its acquisition of Coles, had 5,952 staff in WA.

Myer was later spun-out as a separate business. Accounting for this, Business News’ research indicates Wesfarmers has about 25 per cent more employees than in 2006, on a like-for-like basis.

Coles competitor Woolworths has roughly doubled its employee numbers, with the introduction of the Masters Home Improvement business and acquisition of liquor chain Cellarmasters, both in 2011.

Not surprisingly, employment in the resources sector has grown substantially over the period.  Rio Tinto staff numbers increased from around 5,250 staff in 2006 to an estimated 12,930, while BHP Billiton was up from 7,000 to 10,000 over the same period.

Including BHP spin-off South32, with about 1,900 employees, it means the big miners have more than doubled numbers over the decade, despite the end of the mining construction boom and a move into the less labour-intensive export phase.

In hospitality, the six largest firms employ 28,355 people, almost double the level in 2006 and about a quarter of all Western Australians in the sector.

McDonald’s Australia has been one of the major movers, growing 124 per cent, while catering and cleaning firm, ESS Support Services, has nearly tripled its employee numbers.

One notable detail that emerges from the BNiQ data is that growth in the 10 largest state government departments has closely kept pace with that of the employment market generally.

The top 10 departments employ 96,800 people, 24.3 per cent more than in 2006, while universities grew 22.3 per cent. The University of Western Australia had the highest number of staff of all tertiary institutions, despite having fewer students than some of its counterparts, leading it to embark on an efficiency drive that was the subject of public discussion this year.

Excluding universities, not-for-profit groups employed 9.4 per cent more people than in 2015, led by St John of God Health Care and Silver Chain.

Moving on up

ACIL Allen Consulting executive director WA and NT John Nicolaou said the state’s economy had changed significantly in recent decades.

“When you look at the workforce of WA there has been quite a marked change,” Mr Nicolaou told Business News.

“We’ve essentially moved from a blue collar workforce to a white collar workforce.

“That is reflected in the changing nature of work.

There are far more jobs in professional occupations now, and there are fewer labour-intensive jobs.

“Our economy has evolved, it’s a more sophisticated economy.

“WA is moving up the value chain.”

One example was manufacturing, which employed about 72,000 people in 1984 and now employs around 83,000.

“You only have to look back 25 years ago to the early 1990s or late 1980s – manufacturing was the largest employer in the state,” Mr Nicolaou said.

“It’s not that manufacturing has performed poorly, it’s just a sector that has been going through disruption through globalisation and other factors.

“Other sectors of the economy have grown significantly; health and community services is one, retail continues to grow, professional services.”

Adding BNiQ data to public information provided by the ABS provides further detail of the trends.

The state’s three largest employing industries, for example, are retail trade, healthcare/social assistance, and construction, according to the ABS.

More than 155,000 people work in healthcare and social assistance, which has grown well above the rate of population and employment growth overall in the past decade, and is now about 57.5 per cent larger than in 2006. In the public sector, the Department of Health is about 27.6 per cent larger, according to BNiQ, at 34,150 staff.

That indicates much of the healthcare sector growth has been in private businesses and in NFPs.

St John of God Health Care is one example, with staff numbers more than doubling from 3,613 in 2006 to 7,683 this year.

NFP aged care and disability services provider Brightwater Care Group has grown by around 47 per cent over the decade, while Silver Chain has increased in size by around 74 per cent.

Looking healthy

St John of God chief executive Michael Stanford said the ageing and growing population was driving demand for healthcare.

St John of God employed about 1,300 more staff in the past 18 months due to increased staffing needs, particularly at its Midland Public Hospital, which opened in November 2015.

Opened as a 307-bed facility, Dr Stanford said Midland could potentially grow to 460 beds in five years.

“We normally have felt that we’re a recession-proof industry,” Dr Stanford told Business News.

“We don’t get the boom, we don’t get the bust, we just chug along with population growth.”

Nonetheless, he said the most recent year had been softer.

“If you look at it at the moment around Australia, the private hospitals are doing a little bit less work than they were this time last year and the public hospitals are doing a bit more work,” Dr Stanford said.

Ramsay Health Care WA operations manager Kevin Cass-Ryall said Ramsay’s Joondalup hospital campus had doubled in size to 680 beds a couple of years ago, while the Hollywood hospital had undergone an expansion of about 60 beds late last year.

The company also won an extension of its contract to run the government’s Peel hospital.

“We’re doing fine from a business point of view,” Mr Cass-Ryall said.

“Irrespective of what happens short term, medium-long term there’s the demand there.

“There’s the growing and ageing population, demand for health services in the latter years significantly increases.”

He said there was potential demand for expansions at all three of Ramsay’s major hospitals.

There was also some good news in recent health sector wage agreements made by the state government.

“We haven’t been through an enterprise agreement recently but the fact that government in the area of health have been able to pretty much keep to their wage policy is a plus,” Mr Cass-Ryall said. “With our upcoming enterprise agreements, I would expect them to be similar.”