The prospect of labour shortages will force a major rethink on training and migration.
DURING the sustained economic boom that came to a screeching halt one year ago, business leaders were unanimous in advocating a long-term approach to dealing with the big strategic issues.
No issue was bigger than the shortage of skilled labour, which ended up becoming an absolute shortage of labour of almost any kind.
There was general agreement that industry had failed to invest sufficiently in training in previous years, and earnest calls to ensure the problem never recurred.
Yet a federal government report released last week found there had been a sharp fall in the number of new apprentices.
By the March quarter of 2009, 15 to 24 year old apprenticeship commencements in trade occupations had fallen by 23.2 per cent compared to the previous March quarter, and by 7.5 per cent for non-trade apprenticeships.
The decline has mostly affected teenagers (15 to 19 year olds) who comprise 68 per cent of commencements in trade occupations and 33 per cent in non-trade occupations.
To some degree this may be a result of complacency.
A recent survey by Sydney recruitment firm Aequalis Consulting found that 50 per cent of employers do not believe there will be a skills shortage once the economy recovers.
That is at odds with the views of most economists, as reported in this week's State Economic Review.
Chamber of Commerce and Industry WA chief economist John Nicolaou told WA Business News: "There is growing concern in the WA business community that the severe labour shortages that plagued the state in recent years are likely to return".
Similarly ACIL Tasman director Ian Satchwell said: "Developing a workforce to resource the boom is the key issue for WA".
To its credit, the federal government has acknowledged that the decline in apprentice commencements is a major concern and, in its usual manner, has thrown money at the problem.
Last week, Deputy Prime Minister Julia Gillard announced a tripling of the first-year bonus paid to employers who take on apprentices in traditional trades this summer.
The total payment will be up to $4,850 in the first year of an apprenticeship, at an estimated cost of $100 million.
The government is hoping to get 21,000 people into apprenticeships in the areas most affected by skills shortages, including butchers, bricklayers, carpenters, electricians and hairdressers.
The government is also offering extra funding for pre-apprenticeship programs put together by the states with industry and training organisations.
These are useful steps that should help to improve training outcomes. They follow a range of incremental reforms, at a national and state level, implemented in recent years to improve the apprentice training system.
These changes included shorter apprenticeships and a move towards competency based rather than time-based apprenticeships.
The process of implementing these changes was excruciatingly slow, but that has not deterred the Master Builders' Association of WA, which believes more fundamental change is needed.
It has called for a system of school-based trades training to complement the apprentice system.
MBA director Michael McLean said not enough employers were putting their hand up to take on apprentices.
This is disappointing but not surprising given the acute financial pressures facing many businesses.
Mr McLean said the added problem was that not enough individuals were choosing an apprenticeship.
The current system is producing just enough trades people in the building industry to replace retiring workers, but there is no growth.
Mr McLean acknowledges there is a lot of work to be done if this idea is to be implemented, and he conceded it would not be appropriate for all trades.
The concept has already met with opposition from various unions, training providers and even some employers who prefer the traditional approach.
Critics of change should reflect on what is likely to happen if trades training does not become more efficient and more popular.
It will become even more difficult for local industry to take advantage of the opportunities that emerge in coming years.
There is already mounting pressure to ease migration rules so that it is easier for employers to bring temporary staff into Australia.
It is inevitable that migration will rise as labour shortages emerge; the extent will depend on the capacity of the local labour force to meet the needs of industry, and that is where an improved, more efficient training system has a role to pay.
