WHILE many businesses in the west are bracing for the economically stifling impact of impending skills shortages, Skill Hire chief executive Stephen Edgar sees opportunity.
WHILE many businesses in the west are bracing for the economically stifling impact of impending skills shortages, Skill Hire chief executive Stephen Edgar sees opportunity.
Recent forecasts from the Chamber of Commerce and Industry WA showed Western Australia would need almost 500,000 extra workers over the next decade, and based on current trends the state will fall more than 210,000 workers short.
Mr Edgar said that was actually a good thing for Skill Hire, the largest employer of building and construction apprentices in WA.
“It’s great for us because we’re a training organisation,” Mr Edgar said.
“If we go into recession, government tends to stimulate training, which is our business, and in boom times there are skills shortages, and that’s our business.
“The only real effect the skills shortage has on us is trying to bring in people ourselves, like trying to bring in lecturers or field officers.”
Skill Hire was established in 1995 by founding directors Robert Stockdale, Gregory Stocks and Tony Fitzpatrick in the south coastal town of Albany as a training and employment provider.
Over the years its core business has diversified to include indigenous employment, nationally accredited training and apprenticeships, and international recruitment.
The varied base of employment services has become one of Skill Hire’s largest market advantages, according to Mr Edgar.
“Structurally, we’ve got a very integrated business model; we are a registered training organisation, a group training organisation, we do labour hire, and we do indigenous employment,” he said.
“Very few companies have that breadth. They may do a little bit of training but they don’t do apprentices and they don’t do indigenous employment.”
Mr Edgar said Skill Hire’s other big advantage was its corporate culture and ‘can-do’ approach to business.
“It may sound glib but it’s actually a very powerful and real thing,” he said.
“People are passionate about their jobs. They are determined to get the outcome for both the client and the candidate.”
Skill Hire’s financial results speak for themselves.
The company has opened five new offices across WA during the past 18 months, taking its total to 16, from its headquarters in Albany to outposts in Kununurra, Kalgoorlie, Carnarvon and Geraldton, and a lot of places in between.
It will turn over around $48 million this financial year, and has doubled its profits over the same period to $4.8 million.
There are about 600 apprentices on Skill Hire’s books, representing a quarter of all apprenticeships in the building and construction sector.
It has also doubled its full-time employee base since 2007-08.
Skill Hire has also invested significantly in its executive and management teams during the past 12 months to deliver new opportunities.
The company’s rapid growth, Mr Edgar said, had been largely organic.
He said winning a lucrative contract with Job Services Australia to provide employment services in the Goldfields-Esperance, Mid West and Gascoyne and Southern WA regions had been the main driver behind the fast-growing profits and revenue results.
“That’s been one of the big changes, we’ve just seen steady growth and our labour hire business has grown quite dramatically,” Mr Edgar said.
“With a shortage of skilled people we’re finding our labour hire business grows, so we’re just focusing on our margins and improving them, and becoming a bit more commercial with some of our contracts.
“It’s been good management, plus a very strong market.”
Mr Edgar also said Skill Hire’s business had diversified naturally as the market presented opportunities.
With residential building and construction struggling in WA, those opportunities were now in mining, and oil and gas.
Latest predictions from the state government’s Housing Industry Forecasting Group have tipped dwelling starts to drop from 25,000 last financial year to around 20,000 this year.
“Our apprenticeships are pretty flat just now, and we don’t see it kicking up in the short-term,” Mr Edgar said.
“So what we’ve been doing is trying to diversify, we’re getting more into metal trades.
“We’re putting more of an emphasis on building up in those areas of the business.
“When you look at us, we’ve got a fantastic market, but we don’t really have a big presence in mining and oil and gas. And in WA, it’s a fairly big opportunity.”
To take advantage of that opportunity, Mr Edgar said Skill Hire had grown its indigenous employment services team to the point where it was now a leader in the industry.
“The indigenous employment is certainly one angle in, because all the contractors have 10 per cent indigenous employment targets, and they all struggle with it,” he said.
“We know how to do it, but there isn’t an easy fix. But we’re now beginning to see the miners take notice, because we can deliver.”
Mr Edgar said negotiations were also almost concluded with one of the world’s largest mining companies to handle their international recruitment, and the company was also talking with Woodside Petroleum, among other major resources-focused firms, to provide employment services.
But that’s not the only frontier of growth for the ambitious Skill Hire management team.
After building a presence in the resources sector, Skill Hire will look to build its base nationally.
Mr Edgar said one of the drivers behind his appointment in January as chief executive was his previous experience not only in mining and oil and gas, but mergers and acquisitions.
“I bring the M&A and the mining and oil and gas expertise, and the bigger company feel, because as we grow, we’ve got to grow up and become a corporate,” he said.
“Our business model is very scalable and very mobile, so going national is something that we just need to do. We can grow a lot organically, but going national we’re probably more likely to make an acquisition to gain a foothold.
“The logical market at the moment appears to be Queensland because it is so similar to WA.
‘‘There is a big building and construction industry, there’s mining so Queensland is probably our front of mind target right now, but to be honest we’re looking at just about every state.
“The key for us is our business model is integrated, scalable and mobile, so we can apply it anywhere.”
