Slowdown fails to dent demand for skilled labour

12/11/2008 - 22:00

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SOME of the Western Australia's top companies have cut or redeployed staff in recent weeks.

Slowdown fails to dent demand for skilled labour

SOME of the Western Australia's top companies have cut or redeployed staff in recent weeks.

To name a few, Henderson-based shipbuilder Austal retrenched 109 staff, Mount Gibson Iron cut 190 employees, and engineering contractor WorleyParsons had 250 workers taken off mining projects.

But has the recent change in mood altered the Chamber of Commerce and Industry WA's forecast that 400,000 additional workers will be needed over the next decade to cope with expected economic growth?

Doom and gloom has been widely predicted by analysts in recent weeks, with JP Morgan Stephen Walters indicating that 1 million people could be out of work nationwide by 2010.

Weak retail sales and building approvals, and the decline in credit growth, consumer confidence and business confidence were also flagged as negatives.

But CCIWA is standing by its forecast for the WA economy, which is still expected to grow by 5.5 per cent this financial year.

"With the global economic turmoil at the moment, if you were going to be in any OECD country...you'd want to be in Australia and if you wanted to be in any jurisdiction in any state right now, you'd want to be in WA," Chamber of Commerce and Industry WA chief executive James Pearson told a WA Business News boardroom forum last month.

"Let's not scare the horses, let's remember that right now we still need workers in WA. We'll get them from the other states if we can, but we need them both permanently and temporary from overseas."

Migration specialists told the forum overseas workers are still needed to fill the skills and labour gap in WA.

"The severity of the skills shortage is so bad that we haven't seen an impact; we had a record month last month, we'll have a record month this month," UltimateSkills Global chief executive officer George Gelavis said.

Mr Gelavis was among a group of business owners, migration and human resources specialists to gather in the WA Business News boardroom to discuss the state of skills and labour shortage in WA and the impact of increasing compliance for employers wanting to bring in overseas workers.

They called for more flexibility in migration policies in the face of the state's ongoing skills shortage.

Mr Gelavis told the forum his clients in WA and Queensland were experiencing high demand for skilled labour, despite the global financial crisis.

"I can absolutely categorically tell you that our customers are ploughing along as if nothing had happened. The shortages they have are so severe that any change at a macro level is not coming into their thinking at a local supply of labour level," he said.

TR7 director Shane Anderson said there were mixed reactions in the market but skills remained in high demand.

"Time is for caution but highly skilled workers are still in demand and you need to bring those people from overseas," he said.

ISA Group director Noelene Merrey believes the recent job cuts will not affect the skills shortage that WA businesses are experiencing, but she said it might absorb some of the labour shortage that they had.

"I still feel that there is a skills shortage but the labour shortage won't be as severe as it was. A lot of the people who were retrenched will support the labour shortage," Ms Merrey said.

Recent figures from the Australian Bureau of Statistics show a significant divide between WA employment trends and those of other states.

The figures show WA's unemployment rate fell from the previous month's 2.9 per cent, seasonally adjusted, to 2.2 per cent in October.

In contrast, New South Wales had an unemployment rate spiking to 5.2 per cent in October from 4.8 per cent in September.

Nationally, the unemployment rate for October was steady at 4.3 per cent.

The number of people employed nationally rose, despite economists expecting total employment to decline and the jobless rate to rise.

The forum participants expressed concerns over possible cuts to Australia's migration intake, which they said would result from the economic situation in the eastern states, and called for a more state-based approach to migration quotas.

The federal opposition recently asked Immigration Minister Chris Evans to cut the number of migrants by 25 per cent, only a few months after the government announced it would lift immigration numbers to a record 190,000 in 2008-09.

Interstaff International chief executive officer Dan Engles said WA might find it more difficult to bring staff from overseas as immigration policies often appeared to be influenced by what is happening on the eastern seaboard.

"I think the problem they've [federal government] got now is pockets of skills shortage and regionalisation issues," he said.

The forum agreed that the 457 visa, which was initially set up to provide temporary solutions to the skills shortage by bringing overseas workers in on a limited time basis, needs to be more flexible.

"Within the framework that they've got, the government did what they could, but the problem has increased dramatically over the past three years," Mr Engles said.

"If anything, the compliance has increased dramatically, and they haven't changed fundamentally the process through which Australian employers access overseas labour."

A review of the 457 visa program is currently being undertaken by federal Industrial Relations Commissioner Barbara Deegan.

Issues papers have already flagged the prospect of enhanced employer obligations, including payment of the costs associated with workers' travel, recruitment, migration agent fees, licensing and professional registration.

Migration specialists and businesses fear that the Deegan review may introduce more hurdles for employers to bring workers on 457 visas.

"I'm concerned that the current Deegan Review...of the temporary immigration visa system, would bend toward putting more constraints rather than liberalising the system," Mr Pearson told the forum

"We should make the temporary immigration system more flexible and responsive.

"At the moment I am worried that the government might be heading in the opposite direction."

The forum agreed that a more risk-based approach should be adopted.

The temporary and permanent skills shortage facing employers in WA should be addressed with more relevant tools, the forum agreed.

"The issue that I see is that 457 are designed for temporary use, but what we have is a permanent problem," Brandrill managing director Ken Perry said.

"[A shortage of] healthcare workers is not a temporary problem it's a permanent problem, we're looking at a temporary solution to a permanent problem."

While the government recently boosted the permanent immigration intake, the forum agreed that increasing the quotas wouldn't change the situation if the current backlog of permanent visa applications remained.

Figures for August show that processing times for 457 visas appear to have reduced over the past financial year, with 1,400 primary visa applications lodged and waiting for approval in WA at June 30, compared with 2,600 at the same time in 2007.

This was despite a 41 per cent increase in the total number of 457 visa applications in WA, which rose from 8,350 to 11,800 during the same period.

However, 596 employer nomination scheme visas, where skilled workers are sponsored by a company, were waiting to be processed in WA, compared with 352 the year before.

Forum participants said the negotiation time for labour agreement had also increased considerably over time, which represented another major hurdle for employers relying on bringing staff over from overseas.

"We're looking at nine, 10, 18 months worth of time to actually get a labour agreement in," Skill Hire recruitment state manager Paul Whittle told the forum.

When it comes down to sourcing workers locally, those at the forum said although the apprenticeship scheme had some downfalls, it had provided positive benefits for employers and employees.

Mr Pearson said 100,000 extra workers could be injected in WA's workforce if female participation equalled the average of the top 10 OECD countries. In addition, he said, about 20,000 working age indigenous Western Australian currently were not employed.

While participants said tapping into the local unemployed working age population could be an option for businesses, they acknowledged there were major hurdles to be dealt with.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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