The shortage of skilled labour is the biggest issue facing many Western Australian businesses. WA Business News reports on some of the innovative responses to the skills crisis.
Clough managing director David Singleton sums up the staffing challenge facing many businesses in Western Australia when he says: “recruiting good people is always a challenge but recruiting anybody in this market is very difficult”.
With Perth in the middle of a resources boom, engineering companies such as Clough are feeling the squeeze more than most, and Mr Singleton has responded with changes that break new ground.
“We set up an internal recruitment team, and that’s the first time I’ve ever done that in a business,” he said.
“The reason for that is that it’s the first time I’ve been exposed to a problem of this magnitude.”
Clough now has 12 people working full-time on recruitment; and the team has travelled far and wide to find new staff.
Their top targets are Aberdeen and London, which have plenty of experienced oil and gas engineers, but they have also gone to Canada, Norway, Germany and South Africa and are planning trips to Chile, Venezuela, Croatia and Malaysia.
The skills crisis has hit most industries, including the accounting profession.
Ernst & Young managing partner Jeff Dowling said the supply-demand equation had changed so much that employers were now forced to chase graduates.
“The market has turned completely on its head; we are selling to the students,” Mr Dowling told WA Business News.
Until a couple of years ago, the onus was on commerce graduates to approach employers after they had completed their studies.
Now the employers are approaching the students, offering them work experience, giving them a chance to know the firm, and in some cases offering sign-on bonuses.
“Many graduates will receive multiple offers, and we are working really hard to make sure we are the first option,” Ernst & Young recruitment manager Michael Shortill said.
While employers are keen to avoid a wages break-out, the reality is that extra dollars speak very loudly when they are trying to recruit or retain staff.
For instance, law graduates joining the big firms such as Freehills, Mallesons, and Allens are being offered first-year salaries of about $50,000; yet one West Perth firm is reputed to have offered $75,000 to secure a law graduate this year.
Armadale builder Robert Shaw, of Daly & Shaw Building, said workers were aware of the offers being made by competitors, leaving him with little option but to respond in kind.
“A couple of months ago, we gave each of our staff members a $5,000 increase in salary just to be ahead of the game and show them in good faith where we were at and where the industry was at,” Mr Shaw said.
Ship building company Austal has adopted multiple strategies in response to the skills crisis, and one of the most notable has been a big increase in skilled migration.
Austal has brought 144 Filipino workers into Australia on four-year working visas and aims to have 200 by the end of the year, all working on the same terms and conditions as local staff.
The 1,200 workers at its Henderson shipyard also include recruits from Croatia, South Africa, the UK and Ireland.
Big resource and infrastructure construction projects have fuelled the skills crisis, which also reflects long-term trends like the fall in apprentice training during the 1980s and 1990s.
The shortages are not confined to Australia – the boom in the global oil and gas industry has created challenges for employers in all countries.
One of the big selling points on the recruitment drives of companies such as Clough – especially in places like Aberdeen – is Perth’s lifestyle.
“We’ve got a wonderful DVD with pictures of people running along beaches and sailing on the Swan River; it’s got nothing to do with oil and gas,” Mr Singleton said.
Employers also highlight the quality of work available in Perth and the city’s growing maturity as an international business centre.
With companies including BHP Billiton, Rio Tinto, Chevron, and Newmont posting more of their senior executives to Perth, the city has become much more than a branch office.
Ernst & Young’s Jeff Dowling believes this trend is starting to reverse the brain drain from Perth.
While many young accountants still move to London and other cities, he believes it is getting easier to attract them back to their home town.
“I would argue they are coming back in larger proportions now because the commercial opportunities are much greater,” Mr Dowling said.
“Quality global companies are establishing their corporate offices in Perth.
“That is a huge change in the last three or four years and that is helping to stem this brain drain concept.”
Perth’s emergence as a major international centre for the oil and gas and mining industries is also attracting new people to Perth, and not just engineers.
A prime example is Deloitte’s newly appointed head of corporate finance, Hugh Thomas, who has extensive international experience.
Mr Thomas was previously based in Sydney, where he was KPMG’s Australian head of energy and natural resources and global head of mining.
About two years ago he concluded Perth was where he should be working.
“I saw what was happening over here and decided that if I wanted to work in the resources sector, then Perth was the logical place to be,” Mr Thomas said.
The skills shortage isn’t just an issue at the big end of town.
The strategies employed by Accor Hotel Group to deal with the skills shortage include working with national employment and training group Plus40, which specialises in finding mature-age workers.
Plus40 director Paul Dickinson said employers would increasingly need to use mature age workers, since 85 per cent of employment growth over the next decade was projected to come from people aged over 40 years.
Accor Hotels WA recruitment manager Fran Kirby said mature age workers were able to relate to the group’s customers and added value to the business.
Mr Dickinson said research by economic consultancy BIS Shrapnel found most mature-age workers were willing to participate in training programs to improve their skills.
“This sends a clear message to employers that there are potential staff out there worth considering if they would only widen their recruitment search methods to include this mature-aged demographic,” Mr Dickinson told WA Business News.
Austal’s human resources manager, Linda Devereux, said the recruitment of Filipino workers was just one aspect of the company’s staffing strategy.
Austal was constantly advertising in WA and interstate so that it could recruit between 40 and 50 workers each month.
She said recruiting workers from overseas was an expensive option, since Austal had to fly senior managers overseas to conduct interviews and select applicants.
“Many people think it’s a cheaper option to go overseas, but its not,” Ms Devereux said.
The company had recruited some workers from office or retail jobs, but in most cases these recruits did not last very long.
Most of the successful recruits were from related trades, and had undertaken additional training at Austal.
Ms Devereux said the company’s main focus was on retaining its existing staff.
“We’ve done some significant work to reduce turnover,” she said. “We’ve ramped up our whole staff training.”
This includes upskilling mature-age trade assistants through fast-track apprenticeships.
The company has also highlighted the career path opportunities within Austal, where most of the managers started as tradesmen on the shop floor.
“People accept that shipbuilding is a long-term career; that has been a big change,” Ms Devereux said.
Like most employers, Austal has tried to avoid bidding up wages, preferring to upgrade its benefits and conditions.
These include its share ownership plan and its profit sharing scheme, which is based on years of service and therefore provides an incentive for workers to stay.
Ms Devereux said the company had halved staff turnover over the past couple of years and had also started to see workers who were lured to other jobs returning to Austal.
“They’ve done their time on the projects or on fly-in fly-out and now they are knocking on our door,” she said.
The focus on staff development and career opportunities extends across all industries.
Programs to retain staff extend beyond the workplace. Clough, for example, runs a program to help the families of its international recruits, which includes airport pick-ups, finding houses, stocking fridges with culturally appropriate food, finding schools and doctors, even organising social gatherings for wives and partners.
In the current market, nothing can be taken for granted.