Nifty WA firms find skills crisis workarounds

Western Australian businesses are finding ways around the crippling skills shortage, with a new report showing concerns about the crisis cooling.

Chamber of Commerce and Industry WA’s September business confidence report found 71 per cent of survey respondents pinned the skills shortage as a barrier to growth.

While still high, it is a 13 per cent decrease from the previous quarter’s report.

The CCIWA found while workers remained in short supply, WA businesses were adapting by upskilling existing staff, boosting incentives and taking on less work.

Half of survey respondents had effectively upskilled staff and nearly 40 per cent were boosting wages or offering bonuses.

About 35 per cent declined new work, 25 per cent invested in automation, and 20 per cent lured interstate workers.

The report found 31 per cent of businesses surveyed felt conditions would improve by the end of the year, up 1 per cent from the previous quarter.

WA’s construction industry led the way with a 10 per cent business confidence boost to 44 per cent, followed closely by the resources sector.

“This likely reflects the huge pipeline of residential construction set to be completed, along with the slight easing of labour market conditions,” chief economist Aaron Morey said.

But four in five respondents said rising costs would hamper growth over the coming year, led by wages, insurance and tax burdens.

Those concerns, particularly in the resources sector, were exacerbated by the federal government’s move to make employers pay labour hire staff the same wages as those under enterprise agreements.

“It remains to be seen what impact the federal government’s proposed workplace reforms will have on business confidence in the resources industry,” Mr Morey said.

“The attack on labour hire firms is likely to have a significant impact on the mining sector, which relies on labour hire for legitimate operational reasons.

“It’s likely those concerns will weigh on businesses when they plan for future growth.”

The federal government has argued the move would prevent about 67,000 staff from being ripped off and would have little economic impact.

Under the proposed change, due to come into effect in November next year, the Fair Work Commission would be able to force businesses to match labour hire and direct employment wages.

“These changes will affect a small number of workers. But for the workers this affects, closing this loophole will be life-changing,” Workplace Relations Minister Tony Burke said.

Two-thirds of businesses surveyed wanted to see payroll tax reductions in the next state budget, and half called for more measures to attract workers to WA.