[hr]The widespread transition of mega-resource projects from construction to production represents a new operational climate for the mining, oil and gas sectors, with fresh skills challenges predicted for years to come. The industry’s workforce expert, the Australian Mines and Metals Association (AMMA), is easing the transition through a variety of action. But as executive director, industry services, Tara Diamond writes, it will be no easy task.[hr][insert_menu title=”Menu”] [link to=”A shifting workforce”]A shifting workforce[/link] [link to=”The new people challenge”]The new people challenge[/link] [link to=”Prompting higher labour mobility”]Prompting higher labour mobility[/link] [link to=”Accessing diversity opportunities”]Accessing diversity opportunities[/link] [link to=”Transferring workforce skills”]Transferring workforce skills[/link] [link to=”An active approach”]An active approach[/link] [link to=”About tara”]About Tara[/link] [/insert_menu]
After more than two decades of investment and employment growth across Australia’s mining, oil and gas sectors, the business environment for resource employers is rapidly changing.
Already, the mining, oil and gas sectors have delivered unprecedented gain both for the Australian economy and for the Australian well-being more widely.
Resource employees comprise one of the fastest growing workforces in the country, highlighted by the creation of more than 100,000 new direct jobs during the past five years alone. Additionally, the Reserve Bank of Australia has reported more than 1.1 million flow-on jobs have been created through this period of record resource investment.
But recently, figures from the Bureau of Resource and Energy Economics (BREE) have revealed what employers have long felt – that with record investment and construction activity slowing, Australia is transitioning into a new heightened period of production and export activity.
Over the past six months, more than $30 billion worth of resource projects have made the transition from the labour-intensive construction phase into production, where fewer numbers of highly skilled technical staff are required. As a result of greater commodity output, export earnings are predicted to surge by 17% to about $205 billion over the coming 12 months.
However, while many major projects are nearing the end of peak construction, it’s important to note that the committed pipeline of new resource projects is still harbouring $240bn worth of capital investment and about $318bn in capital is awaiting final approval.
For resource employers, this evolving landscape presents a new host of challenges and opportunities, particularly in the way of workforce recruitment and development. Making sense of the current labour market and what changes can be expected in future provide the perfect foundation for understanding just how the resource industry can tackle the challenges ahead.[pullQuote]”…if our nation does not secure more new mega-resource projects, the construction skills demand will shift from a peak of 83,324 workers to just 7,708 by 2018.”[/pullQuote] [title from=”A shifting workforce”]A shifting workforce[/title]
A number of workforce planning tools and initiatives have been developed to help resource employers achieve effective workforce outcomes by profiling the labour market and identifying opportunities for meeting their skills demands.
One of these tools is the AMMA-Pit Crew Labour Market Index, a biannual report collating data on capital investment, projects density and labour demand.
According to the latest Index, Australia’s 350 resource industry and related infrastructure projects either awaiting approval or already under construction will require about 66,500 workers over the coming 12 months.
In stark contrast to widespread skills shortages of less than two years ago, it is predicted that such construction skills demands will be comfortably met due to significant changes across the resource industry and the manufacturing industry, where talent pools are heavily shared. However, while a surplus of 22% is expected for construction skills, it is of interest to resource employers that skilled workers have become concentrated in particular pockets around Australia.
Despite representing the traditional resource hubs of Australia, Western Australia and Queensland no longer face major challenges in labour availability, instead experiencing labour surpluses of 28% and 10% respectively. The Northern Territory, where Inpex is soon to commence the construction of its $33bn Ichthys LNG project, is the only state facing possible skills shortages of around 8%.
The high availability of skilled labour in the current climate means resource employers are well positioned to tackle potential workforce shortages arising from natural attrition, mobility, other sector activity and unexpected changes in the project sector. Fortunately, resource jobseekers are also qualified to support such challenges.
According to the AMMA miningoilandgasjobs.com Jobseeker Index, released biannually to profile resource-specific jobseekers the benefit of resource employers, the average resource jobseeker is a trade-qualified man of 42 years of age with 15 years’ experience. Encouragingly, women also represent around 30% of survey participants, and the prospect of taking up the resource industry’s popular fly-in, fly-out working arrangement on a two-week-on, one-week-off roster is a welcome one for all jobseekers.
For now, the labour market is well positioned to meet the needs of resource industry employers embarking on the construction of resource projects throughout Australia. However, with the widespread transition of resource projects away from construction to production, a vastly different range of skills will be in demand over the coming five years. [top][hr] [title from=”The new people challenge”]The new people challenge[/title]
The Australian Workplace Productivity Agency recently revealed that if our nation does not secure more new mega-resource projects, the construction skills demand will shift from a peak of 83,324 workers to just 7,708 by 2018.
These figures represent an underlying need to revive Australia’s attractiveness to overseas investment firms in order to continue enjoying the employment benefits created by new resource projects. However, a decade of mass investment into world-leading natural gas developments is continuing to ramp Australia up to soon be the world’s second largest LNG exporter.
The skills demands to sustain this newfound status are unprecedented. In oil and gas operations, AWPA forecasts a 57% increase in employment opportunities, burgeoning from 38,943 currently to 61,212 in 2018. Mining operations employment, by comparison, is expected to rise by 7.4% to 254,260 over the coming five years.
A key challenge to the vast change in these numbers is not in the numbers itself, but instead, in specialised skills. AWPA predicts that resource industry employers may be faced with a shortage of the highly specialised operation-based skills needed to support the production phase of resource projects, unless significant action is taken to counter the overabundance of construction-based skills already in existence.
AMMA believes that with greater labour mobility, a wider focus on skill transfer and development, and the creation of a more diverse workforce, Australia’s resource employers may find the hurdle of potential skill shortages much easier to overcome. [top][hr] [title from=”Prompting higher labour mobility”]Prompting higher labour mobility[/title]
The ABS indicates about 82% of Australians reside on the east coast, while just 11% live in Western Australia and the Northern Territory. Despite generating 45% of the national mining service revenue, Western Australia draws just 10% of the national labour pool as permanent residents.
The abundance of skilled labour in Australia’s eastern states provide both a challenge and an opportunity for resource employers in terms of labour mobility. Encouraging a higher rate of labour mobility from eastern regions will prove vital in years to come as major LNG projects in particular present decade-long sustainable employment opportunities.
As noted in the Jobseeker Index, fly-in, fly-out working arrangements have already gained popularity within the resource workforce with just over one-third, or about 100,000, currently engaged in FIFO or DIDO formats.
A large portion of the remaining workers are residents of Australia’s iconic mining townships, where resource employers have generally had a strong track record in community development. Last year, resource employers funded community infrastructure, local suppliers and indigenous contractors with more than $35bn in investment – exceeding company tax and royalties by $14bn. The BHP Billiton Mitsubishi Alliance (BMA) alone contributed $47m to the upgrade of the Moranbah Airport, lowering local fares and improving support for its FIFO workforce.
However, there is room for improvement in labour mobility initiatives with greater cooperation between resource employers, and state and federal governments.
A study conducted by Edith Cowan University revealed that despite high remuneration opportunities averaging $126,022 annually in 2013, a lack of accommodation with reasonable rental rates together with high costs of living were key deterrents for moving to Western Australia.
Government-funded infrastructure projects to improve community attractiveness, tax incentives to encourage labour mobility to remote locations, and adequate housing developments that offer affordable rental rates for residents, are key solutions to ensure greater labour mobility domestically. [top] [pullQuote]”…In oil and gas operations, AWPA forecasts a 57% increase in employment opportunitiesÖmining operations employment, by comparison, is expected to rise by 7.4%…”[/pullQuote]
[title from=”Accessing diversity opportunities”]Accessing diversity opportunities[/title]
Comprising just 15.5% of the resource industry workforce, women are a largely untapped source of skills and innovation, but resource employers are acting swiftly to improve gender diversity within their workforce.
Generous paid parental leave schemes, flexible schedules and on-site childcare facilities are some of the benefits offered to women looking to become resource industry employees, and key government partnerships, like the Australian Women in Resources Alliance, are also providing the support needed to further facilitate gender diversity.
Funded in partnership with the Australian Government, AWRA helps to develop and implement diversity strategies that will contribute to an industry-wide goal of increasing women’s participation in the resource industry to 25% by 2020 through important educational and mentoring programs on offer to female jobseekers and organisations alike.
Continuing to develop partnerships between industry and government is a key method for raising gender diversity and fill the skills
gaps that may exist in the near future.
On an international scale, temporary skilled migration is also an important element of the resource workforce. Despite representing just 2.6% of resource employees, migrants fill vital skills gaps, provide access to globally significant innovations, stimulate business growth through immediate skill support and improve overall workforce diversity.
To continue gaining the benefits of skilled migration in Australia, it has become crucial to sustain employer access to the global workforce. Labour market testing and high recruitment costs together place downward pressure on resource employers to limit the utilisation of temporary skilled migration, giving cause to becoming a key policy focus for the federal government. [top][hr] [title from=”Transferring workforce skills”]Transferring workforce skills[/title]
Managing the displacement of skilled workers from the changing manufacturing sector is an important and complex task for both industry employers and the government as a whole. Jobseekers have shown keen interest in gaining new skills and qualifications for the purpose of career progression, a trait resource employers will welcome as they work to transition the construction-based workforce toward operations.
However, in addition to supporting this up-skilling process with its own resource industry-specific Registered Training Organisation, AMMA also facilitates important connections between jobseekers and employers through key government partnerships like AMMA Skills Connect.
AMMA Skills Connect offers events, training opportunities and work placement for women, Indigenous jobseekers, retrenched workers and the long-term unemployed looking to join the resource industry culture. Already, AMMA Skills Connect has created pathways to resource employment for more than 800 jobseekers, but running such programs on a much larger scale can help to ease the pressure of the skill transfers between industries.
At the coalface, industry employers have engaged apprentices and trainees to skill the resource workforce and expand employment opportunities as major projects power ahead into operations. Under the National Apprenticeship Program (NAP), for example, Bechtel Australia extended support to 400 new apprentices for the construction of the three Gladstone CSG-LNG pipeline projects.
However, figures from the National Centre for Vocational Education Research showed that commencements of new apprenticeships have suffered a decline overall in 2013, falling by 9.4%.
Keeping Australia’s apprenticeship and traineeship program alive is necessary for keeping the wider workforce skill set up-to-date, so it has become vital for the Australian government to take action toward reviving the commencement rate with greater support for resource employers and trainees alike.[top][hr] [title from=”An active approach”]An active approach[/title]
As the national resource employer group, AMMA is committed to helping resource industry employers tackle the workforce challenge as it evolves in sync with the shifting business landscape. Skills development, greater labour mobility and diverse workforces are key priority areas that will help ease the skills shortages predicted to impact the resource industry as many projects transition from the construction phase into production.
Beyond the skills challenge, however, it has become crucial to revive the competitiveness of Australia’s resource industry through greater productivity and improvements to regulatory framework in order to continue enjoying the benefits of investment-led growth.
Together, with industry support and government partnerships, AMMA looks forward to tackling new challenges of the changing resource industry head-on.[top][hr] [title from=”About tara”]About Tara[/title]
As AMMAís Executive Director Industry Services, Tara Diamond holds responsibility for a range of critical services and projects designed to meet the evolving workforce needs of AMMA members spanning the mining, oil and gas, and allied service sectors.
Tara possesses broad commercial business and specialists marketing experience from previous employers including Telstra and Vodafone UK. Since joining AMMA in 2011, she has been instrumental in driving growth across the Industry Services division through events, special workforce projects, marketing, and the employer groupís Corporate Partnership model providing key products and services to members.