Labour squeeze drives fresh approaches

PERTH business leaders Chris Ellison and Sue Murphy have given revealing insights into the labour squeeze confronting employers in Western Australia.

As the lead independent director at engineering contractor Monadelphous, Ms Murphy told shareholders this month about plans for an equity incentive scheme for key managers.

The reason, she explained, was simple.

“Retaining our people is difficult when they are offered obscene amounts of money, often by our clients,” Ms Murphy said.

In the dog-eat-dog world of business, just about everyone is trying to poach staff.

Some, like Mr Ellison’s company Mineral Resources, look further than most.

“If your hairdresser goes missing, it’s probably because we have poached them,” Mr Ellison said.

“We can take a young lady out of a beauty salon, which we do regularly, we can put them on the payroll and in eight weeks we take them to a $130,000-a-year job doing seven days on, seven days off.”

It’s not just money that attracts – or retains – good staff.

Accounting firm Deloitte has introduced 18 weeks’ paid parental leave, which is becoming increasingly common across industry.

The parental leave can be taken at any time over a three-year period, full time or part time, and it’s open to women and men.

Where both parents work at Deloitte, they can each take the full 18 weeks’ leave.

Perth managing partner Michael McNulty explained that Deloitte had gone all out to provide a more flexible workplace.

“We no longer have a fixed working day, there is no fixed place of employment,” Mr McNulty told Business News.

“You can flex your hours, where you work and how you want to work.”

It has gone beyond the usual work-from-home arrangement; Deloitte staff can spend up to six weeks working from another city or town.

For instance, they might travel overseas to visit family, or book a holiday house for a few weeks, and continue their normal work while they are away.

“A lot of people have taken advantage of that,” Mr McNulty said.

“The idea is maximum flexibility, and with all the remote working tools, it’s pretty easy.”

These and other examples discussed below show how WA employers are adapting to a very tight labour market.

WA’s unemployment rate is currently at just 3.6 per cent and has been around that number for the past year, indicating the state is close to full employment.

Recent business surveys confirm the tightness in the labour market.

Chamber of Commerce and Industry of WA chief economist Aaron Morey said skills shortages were the biggest drag on confidence, with 83 per cent of businesses citing this as an issue.

This is most acute among businesses in the transport, agriculture and resources sectors.

National Australia Bank’s latest small business survey also highlighted labour shortages as a major issue.

Almost four in 10 (38 per cent) think labour shortages will have a very significant impact on their business in the next year.

Big players

The labour shortage does not discriminate by size.

Business News’ latest survey of WA’s biggest employers has found very little growth over the past year, indicating once again the economy is close to full employment.

The largest private sector employers are retailers Woolworths and Wesfarmers, with 15,500 people each.

A third retailer, Coles, is close behind with 14,000 people.

Mining giants BHP, Rio Tinto and Fortescue Metals Group are also among the state’s largest employers.

The list also features facilities management companies such as Sodexo and Compass Group, which manage most of the big mining camps in WA.

Mineral Resources, which owns a diverse mix of mining and contracting operations, has grown to have about 5,000 people.

Mr Ellison said there was extreme competition for people.

“The cost environment out there is tough. I wouldn’t want to be outside of the mining industry at the moment,” he said.

“The reason you don’t have many manufacturers out there is that they have been driven out of business.

“All our people have moved into the 75 per cent [income] quartile, they are on a whole range of allowances and bonuses and if you don’t pay that, you will lose them overnight.”

Resort facilities

Mineral Resources has been making a big investment in its premises, including a new head office in Osborne Park, to boost its appeal.

Features include an in-house chef and restaurant, a gym, a healthcare clinic with four doctors, a creche and 700 car bays.

The company is also developing what it calls resort-style accommodation at its mines, to try and get ahead of its competitors.

“We’re going from 12-square-metre rooms to 30-square-metre rooms, with queen-size bed, big screen TV and lounge,” Mr Ellison said.

“It will probably be about four times the cost of a standard donga, which is a little bit like a prison.

“That’s the standard in the mining industry and we are changing that.”

Mr Ellison said he planned to upgrade all MinRes camps to that standard within five years.

Increased flexibility was another key focus.

“We want couples to work on our sites and do seven on and seven off,” he said.

Mr Ellison admits a workplace fatality in 2013 changed his outlook.

“That had a profound effect on me. I started thinking a lot differently about the safety of our people,” he said.

“Now I think a lot differently about how we look after them, how we look after their health and wellness, the food they eat, the environment we put them in; it all makes a difference.”

Mr Ellison made clear there was a hard-nosed rationale behind the spending on staff.

“I want to have better performance and better productivity and to get it I need to attract really good quality people and then retain them,” he said.

White collar

Deloitte has been one of the fastest growing employers on St Georges Terrace.

Its WA staff numbers have grown by about 30 per cent over the past year to 990 and will expand further in the New Year once its latest intake of 120 graduates begins.

Despite this rapid growth, the firm still has about 100 vacant positions.

While recruitment was very important, Mr McNulty said the emphasis was on keeping good staff.

“Retaining people is clearly our number one priority,” he said.

Mr McNulty believes company culture is the number one factor in staff retention, along with interesting and challenging work.

Like many employers, Deloitte has found that younger people want to work for a ‘clean and green’ business.

“Absolutely, we get that a lot,” Mr McNulty said.

To meet that expectation, Deloitte Australia aims to be net zero by 2025.

In support of that goal, it has even launched a carbon farming forestry initiative, with the firm buying two properties on the east coast and planning a third in WA.

Mr McNulty said flexible work arrangements was another big factor.

“Telling everyone they need to come in five days a week is just not a winning proposition, but I don’t think everyone staying home for five days is going to work either,” he said.

“There are not many gifts we got from COVID but this ability to flex the workday is one of them.”

Contractors

Engineering and construction group Georgiou has a very different business, but it shares some of the strategies Deloitte has used.

For instance, it has increased paid parental leave and other benefits to ensure it remains competitive with other employers.

Georgiou notes that 100 per cent of employees on paid parental leave have returned to work.

The group employs about 860 people across Australia, with the business enjoying strong growth in revenue to $926 million for the year to June 2022.

Chief executive Gary Georgiou said a key factor for its staff was the ability to work on long-running, complex projects.

Examples in WA include the $150 million Leach Highway and Welshpool Road interchange project, the $585 million Tonkin Gap project, and a $220 million Mitchell Freeway extension.

“As these projects extend over a number of years, we’ve been fortunate to not experience heavy attrition and the complexities of the projects themselves present an attractive option for employees,” Mr Georgiou said.

He said the company had been strategic in the work it pursued, ensuring it had the resources or partnerships to deliver the work.

“Teaming up with like-minded companies is a key to our strategy and ensures our continued growth in our key markets,” Mr Georgiou told Business News.

Health care

St John of God Health Care is one of WA’s largest private sector employers, with more than 9,500 staff. It has a big focus on recruitment, within Australia and internationally.

A spokesperson said it was focused on offering competitive pay rates and a range of extra benefits and salary packaging options.

St John of God has implemented a global mobility plan offering a pathway to permanent residency and introduced relocation assistance for certain international recruits and incentives for midwives, who are in very short supply.

To boost retention, it has scholarships to support clinical staff in their professional development.

Training schemes

The shortage of trained workers in WA has brought a greater focus on training and upskilling programs.

The supporters have included Georgiou Group.

“One of our success stories is our work with Main Roads WA on the Infrastructure Ready Program,” Mr Georgiou said.

This program provides jobs and development opportunities for the long-term unemployed while also boosting the supply of skilled workers for the sector.

In partnership with Training Alliance Group, Georgiou took on 20 participants in the first program.

Of those, 17 completed their training certificate and 10 are now employed full-time while undertaking an apprenticeship.

“The program is not only about upskilling people new to construction to ensure the delivery of our projects but the sustainability of the construction industry,” Mr Georgiou said.

Another program gaining traction is run by the Department of Justice and Carey Training at Karnet Prison Farm.

Since 2019, 90 minimum security prisoners have completed the program, with more than two-thirds of those released finding employment in mining or construction.

The 14-week course is run at a simulated mine site at Karnet and allows participants to meet with potential employers, including WesTrac, Altrad Services, Carey Group, Alcoa and Monadelphous.

In the trucking sector, the state government has implemented a $6 million training scheme after being approached by the Western Roads Federation and the Transport Workers’ Union.

The Heavy Vehicle Driving Operations Skill Set is an Australia-first.

Since the program began in April last year, 232 people have graduated and gained employment as truck drivers.

Notably, around 30 per cent of participants in the course have been women, when compared to female representation among truck drivers in WA being of less than 4 per cent.

CCIWA’s Mr Morey said more policy action was needed, particularly on migration.

He praised the recent raising of the skilled migration cap and the scrapping of the Priority Migration Skilled Occupation List.

“WA businesses still need easier and simpler ways to access overseas skills to meet critical gaps in our skills base,” he said.