Deloitte Access Economics Skill shortages in the resources sector


Technology and Industry Advisory Council



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Technology and Industry Advisory Council


Report name:

Managing Western Australia’s Economic Expansion: The Need for People and Skills

Date:

March 2010

Author:

-

Publisher/Industry/Government affiliation:

Technology and Industry Advisory Council

Subcontractor involved:

ACIL Tasman

Primary/Secondary research

Primary

Key sectors

Minerals and energy industry with a focus on Western Australia

This report by the Technology and Industry Advisory Council documents findings from investigations into the causes and future projections of skilled labour shortages in WA.

Key issues that have been highlighted during the current skills shortage include:



  • The ageing labour force, which will play a role in the tight demand-supply balance in the future.

  • Off-shoring of jobs - The scarcity of skilled labour has led to rising real wages so further constraints on commodity prices may place pressure on employers to source labour from elsewhere and this may result in an acceleration of 'off-shoring' jobs to overseas workers.

  • Higher wages have promoted school leavers to forgo higher education and commence employment immediately. As a result, WA has a poor ranking in the proportion of employees working in higher skilled occupations.

  • A need to further adapt and develop the current training system - particularly associated with the ageing labour force.

The Council looked at long-run projections of economic growth in the State and the expected impact on labour demand. It found that the demand for labour will grow faster than the State's ability to supply workers from natural population increases and current migration plans.

The Council estimated WA's total job openings will be at least 460,000 over the next 9-10 years. Compared to new entrants into the workforce, the demand-supply balance under such conditions is likely to remain tight. Table 1.15.1 below illustrates the required demand by 2016 and assumes a 2 per cent annual growth rate in new jobs.



Total_new_entrants_required_by_2016'>Table 1.15.1 Total new entrants required by 2016

Occupation (Major Groups)

Net Replacement

New Jobs

Total Job Openings

Managers and Administrators

14,509

19,074

33,583

Professionals

28,286

40,987

69,272

Assoc. Professionals

25,272

28,307

54,059

Tradespersons & Related Workers

31,241

30,974,62,216




Advanced Clerical & Service Workers

5,699

7,184

12,883

Intermediate Clerical, Sales & Service Workers

43,040

37,209

80,250

Intermediate Production & Transport Workers

16,032

20,150

36,182

Elementary Clerical, Sales & Service Workers

50,398

20,824

71,222

Labourers & Related Workers

24,707

19,303

44,010

Total

239,665

224,011

463,676

The Council also found evidence of skills shortages arising from a general labour shortage. This is despite the State's labour supply generally responding well to increased demand for labour.

The report detailed that WA has an insufficient skilled workforce across a wide range of key occupations, particularly amongst skilled tradespersons and technical personnel. The Council referred to the job vacancies by major skills groups for selected years, as shown in Figure 1.15.1 below.

Figure 1.15.1: Vacancies by skill, WA


Note: Skilled occupation groups chosen on the basis of highest average vacancy rate, for 1981-2008.
Source: DEEWR

The Council thus recognised a long-term dependence on immigration and a need to develop the domestic workforce. As a result it is supportive of increasing immigration with a particular focus on increasing the intake of overseas students.




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