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Western Australia (WA) is experiencing a chronic shortage of skilled labour to the tune of 25,000 workers – a figure that Consultant Peter Dyball predicts to get “worse before it gets better”.
Speaking to Informa Connect before the Global Iron Ore & Steel Forecast Conference, Peter said the mining sector will remain among the hardest hit, with appetite for commodities outpacing the inflow of new talent from overseas and interstate.
With new entrants from training also limited by systemic capacity, major employers and contractors will continue to struggle to get the full complement of resources they need to deliver projects on time and at capacity, he warns.
“What started out as a sector issue three to four years ago has become an economy-wide issue. It’s certainly making things hard for specific occupations where the pool of global and domestic talent is tapped out,” said Peter ahead of his speech at the conference.
“Historically, WA projects and operations have relied on people from other sectors – but that just robs Peter to pay Paul. Other sectors, jurisdictions and countries are fraught with issues as well.”
WA is also grappling with heightened competition from Eastern states – a region that once offered a steady stream of interstate migrants and FIFO workers.
“There are a huge amount of construction projects in NSW, Victoria and Queensland – so workers that would have traditionally come over to WA are now staying closer to home and working there,” Peter said.
Any end in sight?
With the inflow of new talent failing to stem current need, Peter predicts the job market will be “running tight” for the next two to three years. He believes history points to clues about the crisis’ trajectory.
“Universally I don’t know what will happen and it will go as long as it will. That said, the crisis isn’t dissimilar to what we observed between 2005 and 2007; then again between 2010 and 2013.
“Back then, the labour market was at capacity and constrained itself until there was a massive global upheaval. In 2008, the global financial crisis put the brakes on everything. Demand for commodities was dampened and a whole bunch of projects that were going to happen didn’t. Then in 2013, the oil price crashed and that again changed the whole dynamic of the industry.”
What will save us?
Instead of waiting for a major global crisis or geopolitical event to shift industry dynamics, Peter believes a good strategy and the staging of projects will “go a long way”. Preparing for the future is also crucial, he says.
“This is something I keep raving about. We have to be more prepared for the next time this happens, which it inevitably will. As an industry we kept talking about this five years ago but didn’t act because things were okay at the time.
“We all need to be more forward thinking. We have forgotten hard-earned lessons and keep making the same mistakes. We sack people during a downturn and wonder where everyone is when things pick up.”
Peter believes the onus is on both government and industry to lay the groundwork for future crises.
“Industry needs to keep pushing government to develop policies that facilitate the inflow of international workers. The government has made some changes, but the focus tends to be on permanent migration and on trades like healthcare.”
Targeted training and short-delivery qualifications could also boost the supply of much-needed semi-skilled workers.
“Upskilling people more quickly can help fill the gaps of people who operate equipment, erect scaffolding – those sorts of occupations,” Peter said.
Retain an economy-wide focus
Any solutions we adopt need to take into account the broader economy, Peter warned.
“At the moment it’s a race to the bottom with everybody poaching each other’s workers. It’s all well and good for a mining company or contractor to pick someone from a local council or workshop – but that leaves a hole there. A focus on retention can remedy this – and it improves productivity too.
“We also need to have our eyes wide open to those universal events and macro-economic forces and be prepared even if we can’t feel the effect of them right away.
“Putting out a hand to check the weather and not getting rained on doesn’t mean there isn’t a storm on the way.”
Peter Dyball is Principal and Founder of Pit Crew Management Consulting Services. Since 2004 Peter and his team have delivered specialist services to the mining, oil & gas, heavy industry and infrastructure sectors. Pit Crew is best recognised for providing labour market modelling, analysis, forecasting and reporting for major resources, energy and infrastructure projects, in WA and Australia.
Hear more expert advice from Peter at the upcoming Global Iron Ore & Steel Forecast Conference.
This year’s event will be held 22-23 March at the Hyatt Regency Perth.
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