Deloitte Access Economics Skill shortages in the resources sector

National Institute of Labour Studies

Report name:	The Labour Force Outlook in the Australian Minerals Sector: 2008 to 2020
Date:	June 2008
Author:	Simon Molloy & Dr Yan Tan
Publisher/Industry/Government affiliation:	National Institute of Labour Studies, Flinders University, Adelaide, Australia
Subcontractor involved:	Access Economics, Infrastructure 2020 – Can the domestic supply chain match global demand?, 23 May 2008
Primary/Secondary research	Primary
Key sectors	Mineral sector for nine major commodities across Australia

The study Projects the demand for labour by the mineral sector for nine major commodities from 2008 to 2020. The labour demand projections, are based on mineral output projections for the major commodities to 2020 and major occupational categories employment levels. The report found that the overwhelming majority of employees at Australian mines are:

• 
  Managers and administrators
  

• 
  Professionals
  

• 
  Associate professionals, Trades Persons and related Workers
  
• 
  Intermediate production and transport workers
  
• 
  Labourers and related workers.
  

The total number of persons in Australia in these occupational categories is expected to grow by 25 per cent by 2020.

In addition, the report finds that the mining sector will need to employ an extra 86,000 workers between 2008 and 2020 - an increase of 68 per cent - to achieve currently predicted increases in output.

Using a method for predicting labour demand that involves Access Economics' projections of the output Of mineral commodities by state, the authors derive annual growth rates for production which is then applied to a base year employment amount across six occupation groups.

As shown below in Table 1.11.1, the state that records the largest increase in demand will be WA. This represents a 55 per cent share-of the increase in national demand. Iron ore and coal projects will be those which demand the greatest increase in required labour and tradespersons and semi-skilled workers will be the occupations in the greatest demand.

Table 1.11.1: Mineral sector - projected increase in labour demand by state, 2008-2020

	NSW	VIC	QLD	SA	WA	TAS	NT	AUS
Labour increase	7,486	1,189	23,035	5,689	47,698	315	1,440	86,851
% of national increase	9%	1%	27%	7%	55%	0%	2%	100%

Across commodities, iron ore and coal are foretasted to account for the greatest overall increase in demand across the minerals sector, accounting for 24 and 22 per cent respectively.

Table 1.11.2: Mineral sector- projected increase in labour demand by occupational category: 2008-2020

	Managers & Admin	Professionals	Technicians	Tradespersons	Semi-skilled workers	Labourers	Total
Labour increase	4,381	8,952	4,289	31,232	20,155	7,843	86,851
% of national increase	5%	10%	5%	36%	35%	9%	100%

Meanwhile across occupations in the minerals Sector, the greatest increase in workers is projected to be in the tradespersons and semi-skilled workers categories. Together these account for an increase in labour demand of 71 per cent over the time period

The study also looks at Scenarios that assess the impacts of changes in productivity up to 2020. Under these it suggests two approaches that could be applied to improve overall productivity in the Sector: minimising ongoing labour costs by investing in labour saving technology and increased intensive training and up-skilling of new employees from outside the mining industry.

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