In this Q&A with Georgina Davis, Workforce Planning Manager for Energy Skills Queensland, she talks about how companies and HR departments can plan and execute workforce strategies during a skills shortage. Georgina is speaking at the Workforce Planning in Mining 2011. For more information about the event, please visit www.WorkforcePlanningInMining.com.au or call 61 2 9229 1000. Or you can email enquire@iqpc.com.au

1. Planning and Executing Workforce Development
Strategies during a Skills Shortage
Q&A with Georgina Davis, Workforce Planning Manager for Energy
Skills Queensland, the Centre of Excellence for Strategic Industry
Workforce Development for the Energy and Telecommunications
Industry
Workforce Planning in Mining 2011
BHPs CEO has stated – and it is known – that the mining industry faces a
massive talent gap – how do you truly identify you have a skills shortage?
The mining and utilities sectors, like others, are already experiencing a skills
shortage and the renewed demand and increasing skills vacancies will exacerbate
this issue with businesses experiencing project and service impacts such as
increasing labour costs and delays. Indicators of skills shortages include:
• Ongoing recruitment difficulties highlighted through increased vacancy rates,
unfilled vacancies, employment of applicants who do not meet of the
advertised job requirements, and rising recruitment costs. DEEWR’s ‘Survey
of Employer’s Recruitment Experiences in State Capital Cities’ for example,
which compares the severity of recruitment difficulties between State capital
cities (March 2010) showed that Brisbane had fewer vacancies remaining
unfilled in the six months prior to the survey (4.4 percent) than was the case
for any other capital city (the all city average was 7.3 percent). Employers in
Brisbane received more applicants and more suitable applicants per vacancy
than was the case in any other capital city. Although there was an average of
19 applicants for every one vacancy, of which only a quarter of applicants on
average were rated as suitable for the job they had applied for. With
employers citing a lack of work experience as the most common reason for
applicant unsuitability, followed by insufficient technical skills or expertise.
• Difficulties in retaining skilled, quality individuals. Add to these issues a high
replacement demand across many sectors and the workforce risks are
evident. Australia has an aging workforce and with the current pension age of
65 years old and increasing life expectancy, the Federal Government has
already implemented a structure for increasing the pension age to 67 years by
July 2023. However, many of the more physical jobs, particularly in the
technical and trades professions, will still experience lower retirement ages.
Occupational detachment through the loss of skilled workers, particularly
tradespersons to other occupations, together with the aging demographic are
the significant contributors to the high level of replacement demand seen
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2. across the energy, telecommunications and construction industries amongst
others. These losses were further exacerbated by the increasing cancellation
rate of apprenticeships and large numbers failing to complete their
apprenticeships. For example, there has been a steady decline of
electrotechnology apprentices over the past three years (2.3 percent fall in
2010 from 2009), coupled with the number of new commencements for
electrotechnology training programs falling by over 21 percent in 2010 from
the previous year. Completion numbers also fell by over 36 percent from the
previous year. ESQ’s ongoing research indicates that there will be a major
shortage of professionals and paraprofessionals in the engineering,
electrotechnology and construction trades, estimating that the energy industry
alone will need 20,000 extra apprentices over the next five years.
• Increasing wage costs. Many of 2010’s recruitment surveys found that
demand by selected professionals, including engineers and construction
personnel, was increasing salaries. Ambit Engineering Recruitment’s
Engineering Survey for example, which tracks approximately 80 job titles in
Western Australia’s mining, oil and gas sectors, identified pay increases of
around 30 percent during 2010 in high demand roles such as Project Control
Managers. This fact has also been identified within the ABS Labour Cost
Index, which clearly shows that the cost of labour across the mining,
construction and utility service industries within Queensland has grown at a
greater than average rate for the past ten years. Higher labour costs are also
going to be compounded by recruitment difficulties fuelled by unprecedented
levels of planned construction projects expected to commence over the next
24 months; including the emerging coal seam gas/liquefied natural gas
(CSG/LNG) sector.
How can you actually deploy workforce planning when there is a skills
shortage?
ESQ views workforce planning as a strategic planning process. The internal factors
which influence current and future workforce needs are directly related to operational
and project decisions. The workforce planning process identifies the existing
workforce, the demand for future workforce based on strategic decisions, and
analyses the supply of labour available to the organisation or sector; based on a
regional, state, national or international basis. It is essential that individual
companies are fully aware of their workforce requirements over both the short and
longer term. The identification of workforce requirements early on allows a company
to identify possible priority job roles (such as the ‘mission critical’ and ‘hard to fill
jobs’) as well as potential skills shortages.
Therefore the workforce plan only provides an insight on essentially what you have,
what you need and when you need it – it is not something which is deployed.
However a Workforce Plan does allow an organisation to then develop and deploy a
range of Workforce Development Strategies (or an Industry Action Plan) to manage
the identified risks and work towards a sustainable and suitably skilled workforce for
the duration of a project or service delivery.
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3. Workforce Development Strategies may include employing apprentices, introducing
traineeships, developing and implementing specific training and education programs
for upskilling existing staff, targeted recruitment of interstate and international
migrants or setting up a best practice model for recruitment. Complimentary
strategies could include marketing the organisation (or sector) as the employer of
first choice by differentiating themselves from the competition, for example through
their environmental or ethical credentials. The deployment of such strategies
alongside ‘work-life-balance’ opportunities for individuals must also be considered.
These items are particularly important to small and medium sized companies, or
organisations with fixed salary structures that are be unable to directly compete with
the remuneration packages being offered by competing organisations and industry
sectors.
We’ve seen a lot of overseas talent management in the mining sector in recent
years – will this continue?
There have been recent changes to the skilled migration program in order to better
meet the future skills requirements of Australia. Prior to February 2010, the
Department of Immigration and Citizenship applied the Migration Occupations in
demand List (MODL) to immigration applications. The MODL was rescinded on 8
February 2010 following a review which determined that the program had failed to
effectively meet the skills needs of Australia. The review recommended a more
targeted Skills Occupations List (SOL), which was announced in July 2010. The
SOL includes fewer occupations than those in MODL but is aimed to deliver a
General Skilled Migration program focused on high-value skills. The introduction of
this SOL forms part of a package which reflects the Federal Government’s
commitment to a labour market demand-driven Skilled Migration program. We have
recently seen a reduction in the number of skilled immigrants coming to Australia
and it is important that this is trend is further analysed and its impacts mapped.
The risk is that there are a large number of significant projects simultaneously
occurring in Australia and overseas which is increasing both national and
international competition for skilled workers. Many overseas projects are reporting
the same skills shortages as those demanded in Australia. Where demand is
allowed to outstrip supply, labour costs will increase as will the incidence of poaching
key personnel, eventually resulting in projects performing poorly beyond planned
budgets and timescales, or failing to be realised at all.
The mining industry and other key sectors need to be strategic and proactive to
ensure they maintain a sustainable and suitably skilled workforce. The majority of
skill shortages are at professional, para professional and trade levels with these
professions often requiring the successful completion of a minimum of four years
training/education. These long lead-times for skilled workers and potentially a lower
supply of international workers means that there is no ‘quick fix’.
Failure to plan and implement effective workforce development strategies which
address critical issues will severely impact an industry’s future sustainability and
growth. Whilst investment in misaligned workforce strategies will cost valuable
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4. resources for poor returns or benefits. Once a workforce plan has been developed,
a strategic industry workforce development approach means moving the focus from
individual workers within an organisation to the development of strategic and
sustainable skilling systems from an industry wide perspective. It shifts the
emphasis from skills shortage to systems development.
Georgina Davis is the Workforce Planning Manager for Energy Skills
Queensland, the Centre of Excellence for Strategic Industry Workforce
Development for the Energy and Telecommunications Industry.
Georgina Davis is speaking at the Workforce Planning in Mining 2011. For
more information about the event, please visit
www.workforceplanninginmining.com.au or call 02 9229 1000. Alternatively,
you can email enquire@iqpc.com.au
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