Australia: Finding the skills – still the issue for resource projects

Last Updated: 11 February 2011
Article by Myha Hoang

As of April 2010, there were 75 major resource projects and 286 less-advanced projects with a combined value of $359.5 billion ongoing in Australia. With such a significant number of projects, the resource industry is confronted with the dilemma of ensuring the availability of skilled and semi-skilled labour to meet its business needs. Western Australia, for example, has just 10 percent of Australia's population, but is estimated to have 75 per cent of all mining projects and almost 40 per cent of all advanced major resource projects in Australia. In addition, planned investment in infrastructure such as ports and road is crucial to support the growth of the resource industry and to contribute to its industry's global competitiveness. These projects will also increase the demand for skilled labour.

BHP Billiton CEO Marius Kloppers has argued that in order to ensure availability of a skilled workforce, Australia must increase the number of skilled workers through training; access the global talent market and offer better incentives for skilled workers to go where they are needed.

Labour market modelling conducted by the National Resources Employment Taskforce expects an employment growth of 4.9 per cent per annum in the next five years in Australia. Employment in the mining industry in Australia has more than doubled to 184,500 over the past 10 years and continues to expand. The shortage of labour is expected in relation to not only highly skilled workers, such as engineers or geoscientists but also to less skilled workers such as machine operators and drivers.

The skilled labour shortage poses a serious threat to the ability of the resource industry to meet production deadlines. The Chamber of Commerce and Industry's chief executive James Pearson has outlined that wage pressures and labour shortages are the two biggest concerns facing Western Australian employers. It is apparent that a combined effort in workforce development must be undertaken by government and industry to address the looming skills shortage crisis which is threatening the commencement and construction of many of the planned and ongoing projects.

Strategies to Locate Skills

The Western Australian government is embarking on a workforce development plan to address the skills shortage by encouraging greater workforce participation and enhanced training in the resource industry and by recruiting overseas skilled labour. In order to confront the resources industry's skills shortage, the National Resources Sector Employment Taskforce report 'Resourcing the Future', has made a number of recommendations, including:

  • Prioritising workforce training;
  • Increasing the number of apprentices;
  • Temporary migration; and
  • Developing programs with education providers to increase the number of skilled professionals.

Resource corporations and universities have also aligned to address the skill shortages. Masters degrees for Management level studies in Energy and Resources and in Mining Engineering are examples of the collaboration between resource corporations, such as Santos and Coffey Mining, and education providers such as University College London and Melbourne University.

Business has also called on State and Federal Governments to develop a 'human capital strategy' encouraging greater participation in the workforce by women, older Australians and indigenous communities in order to meet the expected shortfall in the labour market in general in Western Australia over the next decade.

Utilising Overseas Workers

Immigration is an obvious, and often required, strategy to boost the skilled labour market, whether through the temporary work visa program or increased use of permanent residence programs.

Other more flexible visas, such as the subclass 476 Skilled Recognized Graduate visa, allow recent engineering graduates to gain up to 18 months of skilled work experience in occupations in demand in Australia. The experience gained may then provide pathways for applying for permanent residence visa, or the necessary skills for employer sponsored visas.

Work (labour) agreements may also provide a more flexible and responsive solution to an individual company's or industry's skills shortages and the government has developed project based agreements. Benefits of work agreements can include:

  • Pre-approval of the number of overseas workers required for a specific project;
  • The possibility of negotiating the ability to sponsor foreign workers in occupations that are not on the approved occupations list but in which genuine skills shortage exists; and
  • Opportunities to negotiate amendments to other general requirements, such as the requisite English language requirement for foreign workers (where a high standard of English may not be necessary for the competent performance of a role).

In order to achieve a sustainable population across all regions of Australia the Minister for Immigration and Citizenship, Chris Evans, announced in early 2010 changes to the General Skilled Migration (GSM) program which affords permanent residence to successful skilled applicants. One key aspect of the changes was the replacement of the current Skilled Occupation List (SOL), which came into effect on 01 July 2010. The new list is targeted at addressing Australia's skills shortage with a strong focus on the resource sector. However, it is as yet unclear whether the new list will improve processing time frames and provide a more readily available foreign workforce. Priority processing arrangements favour, first, those who applied under the Employer Nomination Scheme and second, those that have applied through the GSM program, through a State or Territory Migration Plan.

The dual objectives of the temporary work visa program is to facilitate access to the global labour market and at the same time ensure that the use of overseas workers does not pose a threat to Australian workers' opportunities and conditions. The primary obstacle to devising effective rules for the program's operation is the failure to recognise the reality of labour as a mobile resource, which is particularly pronounced in the resource industry and project based work. The increased onus on compliance with sponsorship obligations is proving difficult for mining companies, and the industry serves as an example of the need for greater flexibility in meeting the unique circumstances and changing industry requirements of project based work.

What should Australia be doing?

Australia requires a holistic approach incorporating the immigration of skilled and semi-skilled workers, investment in the education and training of the next generation of Australia's workforce and the inclusion of under utilised segments of the resource industry workforce, such as women and the indigenous population. To create a sustainable and stable future, more investment must be made in skills development. This will assist the mining industry in addressing the skills shortage but will have a flow-on effect by upskilling the population in general, enabling other industries to avoid their own skills shortage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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