Special Report - Skill shortage fears rising

Concern about Western Australia’s skills shortage is growing as industry finds it increasingly difficult to recruit the people it needs. Mark Beyer reports.

Dale Alcock, John Hughes and John Rothwell are three of Western Australia’s best known and most influential business people.

All three of them came together last month for the industry launch of School Apprenticeship Link, a Western Australian Government program designed to boost the apprenticeship system and lift the supply of skilled trades people.

Their attendance at the launch speaks volumes about the significance of this issue.

Talk of a skills shortage has been getting louder over the past year as new resource and infrastructure projects get underway and the State economy enjoys continued rapid growth.

Many people now describe it as a crisis, though it is a term they are loathe to use in public.

For people such as United Group managing director Richard Leupen, it is a problem that goes hand-in-hand with record turnover for his engineering business.

“It’s a real serious issue, particularly in north Queensland and Western Australia,” he said.

“It’s the resource sector particularly that is driving it.”

Ian Satchwell, executive director of economic consultancy ACIL Tasman, said the skills shortage was repeatedly raised as the number one issue facing many businesses.

“Western Australia is facing shortages of all categories of design and construction workers,” he said.

Mr Satchwell said it was possible WA could miss out on future development opportunities if the problem was not tackled.

“It is going to get worse and the opportunity costs for WA will be substantial unless there is some rapid and concerted action to fill at least some of the shortfall,” he said.

Chamber of Commerce and Industry of WA training services director Gary Collins was in the Goldfields this week, getting first hand reports on the skills crisis.

“All day long, everywhere we’ve been, we’ve heard about businesses not being able to get enough people, or even any people,” Mr Collins said.

“There seems to be a very widespread and deeply entrenched problem in terms of where the next generation of skilled labour is going to come from.”

A recent report by Argus Research, commissioned by the WA Department of Education and Training, revealed the magnitude of the issue.

Argus said there were 35 committed resource and infrastructure projects in WA collectively worth $17.4 billion.

The number of workers needed during the design and construction phase of these projects was estimated to peak at 8,600 during 2004 and 2005.

ACIL Tasman forecasts new projects in WA will need up to 10,000 people and it expects this level of demand to be sustained through to the end of 2007.

“There is a high potential for strong employment demand to continue over the next five

years,” Mr Satchwell said.

The issue is not unique to WA.

In the past month, the Australian Industry Group and the Australian Council of Trade Unions have called for action to deal with the growing skills crisis.

Peel MLA Norm Marlborough, who has been closely involved in helping the State Government develop new training initiatives, said the problem extended internationally.

On a recent trip to Europe, Mr Marlborough said he discovered a highly mobile engineering and construction workforce moving around the continent to work on major projects.

WA has traditionally relied on attracting workers from interstate during the boom years but a buoyant national economy has made this option increasingly difficult.

Similarly, recruiting workers from overseas is not an easy option, though that has not stopped many organisations from trying.

The response of many businesses is to offer higher wages to attract the extra staff they need.

“It brings out the ruthless side,” one business executive said.

“People are prepared to pay whatever it takes to get people.”

The finger of blame is usually pointed at contractors working on big projects, which have greater incentive and more capacity to pay higher wages.

The losers out of this process are often local engineering and fabrication workshops, which struggle to offer competitive wages.

While the booming resource sector is the single major reason for the current skills shortage, the reality is that shortages apply across a wide range of industries. The latest report on skills shortages by the Federal Department of Employment and Workplace Relations lists more than 40 professions and trades in WA experiencing shortages.

These include engineering trades such as metal fabrication and welding, automotive trades such as motor mechanics and auto electricians, and building trades such as bricklaying.

The boom in resource and infrastructure projects has placed acute pressure on the supply of engineers.

The strong WA economy has also lifted demand for lawyers, which are officially in short supply, and accountants. The latest accounting and finance survey by recruitment firm Hays found the largest overall increase in recruitment levels in the June quarter was in WA.

The State Government has adopted a range of initiatives to deal with the issue of skills shortages, including the Skill up for the Burrup, Skilling WA and Fast Track apprentice programs, all of which are refresher courses designed to reskill and upskill existing workers.

This is on top of its $60 million annual funding of training programs.

Its latest initiative is the School Apprenticeship Link, under which students will gain practical exposure to a range of trades during year 11 and then study full-time at TAFE for up to three months.

“It is envisaged that this intensive training may lead to a reduction in the length of an apprenticeship,” Education and Training Minister Alan Carpenter said. “A shorter apprenticeship is also very attractive to industry because it produces more skilled workers in a shorter time.”

The Government is hoping up to 500 school students will participate in the pilot program next year, in the metals, building and construction, automotive and food industries.

Mr Collins said the Government initiatives were worthwhile but a lot more needed to be done, including lifting skilled migration.

Mr Alcock agrees the School Apprenticeship Link is a useful step but he wants more fundamental reforms to the training system.

“The apprenticeship model is old and it needs updating, it needs shortening,” Mr Alcock said.

He would like to see apprentices complete two-year modules rather than the current four-year program.

Shortages

Civil engineer

Electrical engineer

Metal fitter

Metal machinist

Metal fabricator

Welder

Sheetmetal worker

Motor mechanic

Auto electrician

Panel beater

Vehicle painter

Bricklayer

Plumber

Cabinetmaker

Nurse

Lawyer

Hairdresser