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Immigrant workers to fill gap created by training failures

03 Jan 2013

The University of Sydney Business School


Australia will be forced to take more workers from abroad to meet the skills and labour needs of the resources 'boom' because of a failure in recent years to train enough tradespeople and technical professionals, writes Associate Professor Susan McGrath-Champ.

Australia will be forced to take more workers from abroad to meet the skills and labour needs of the resources 'boom' because of a failure in recent years to train enough tradespeople and technical professionals.

In the past, a union backed move to import United States workers to plug our skills gap would have been met with charges of industrial treason. Today, the reported actions of the Communications Electrical and Plumbing Union amount to little more than confirmation of a harsh industrial reality.

This predicament is the product of several factors currently shaping our labour market including an inability on the part of successive governments to implement appropriate training policies.

Continued government inaction in areas such as apprenticeship training is certain to result in a medium to long-term reliance on more Chinese and perhaps US or Spanish, Greek and Italian workers seeking economic refuge from an imploding Euro zone.  

Despite a series of largely half hearted attempts to address the problem, Australia's apprenticeship system has experienced a dramatic decline over several decades. As a result, the supply of qualified tradespeople is falling far short of demand.

The resources boom, which has swelled the ranks of highly paid "fluoro-collar" workers (who traditionally held lower-paid physical jobs) in the mining provinces of WA and Queensland, has only served to highlight this policy failure by aggravating skills shortages throughout the country.

In 2006 the Minerals Council of Australia forecast 70,000 new jobs in the resources sector through to 2015 but, despite this forewarning governments have failed to respond with effective training initiatives and have rather presided over a deterioration in an apprenticeship system that had once met the country's needs for skilled workers.

Women remain a largely untapped source and employing them to fill occupational shortages is a key labour strategy in other industries. However, training women for trades needed in the mining sector remains limited. Parental perceptions discourage young women taking up a trade and concerns linger about experiences onsite.

Policies that facilitate recruitment and retention of women have been hailed as a means of addressing labour shortages and also of enhancing equity by improving women's employment in Australia's most highly paid industry. But analysis of companies' equal employment opportunity reports yields little evidence of concerted industry activity to address issues that promote women's participation in the industry.

The government's decision to allow Chinese workers into the country to build Gina Rinehart's mine in Western Australia has again focused our attention on the nation's current skills shortage. Australians with skills that are in short supply are under no direct pressure to relocate to the country's more remote corners despite extremely attractive wage packages.  As a result, Gina Rinehart and other miners are now turning to China and other parts of the world for the skills demanded by the boom and will have no choice but to do so on an ever increasing scale in the future.

Even though some Australian businesses prefer to employ locals and train them up, the intensity of the resources sector shortage makes offshore sourcing a necessity in both the construction and production phases.

The impact on the labour market may be significant.

The current migration system allows short term sponsorship of tradespersons (and other workers) by employers and labour hire companies. Wages are meant to be 'market rates' but determining exact equivalence can be challenging. The qualifications of temporary labour are not always assessed for local equivalence which can impact on skill levels and quality of work.

Skilled migration has been part of Australia's labour supply for a long time.  From the Snowy Mountains scheme to the Sydney Olympics, immigrants escaping the aftermath of war or economic hardship have contributed to building major Australian projects. Whereas many of these migrated for permanent resettlement, today's business migrants are short-term arrivals, mostly on 457 visas.

In each instance, aspects of the employment system have been reshaped and moulded by these immigrants.

For example, forced by tighter profit margins during the Olympics construction boom, Sydney tiling subcontractors turned to South Korean immigrants. The move resulted in a shift away from direct employment, based on comprehensively skilled, well-remunerated unionised tradespersons to a system of fragmented skills and wages of largely non-unionised workers assembled into teams by bilingual, bicultural 'middlemen'.

Unemployment figures have doubled in some Euro zone countries, not uncommonly to over 20 per cent. As industry adjusts to the failure of Australian training policy, we are likely to see the importation of workers not only from China but also from recession plagued Europe to work not only in the mining sector but throughout the economy.

Tomorrow's workforce will be shaped by the government's ability to now manage local training and immigration.

The proceeds of mining must be invested in our tattered technical training systems, and into creating a first-class business migration system to supply labour where genuine shortages arise. Further it must be channelled into the development of creative and innovative capacity that will enable Australia to compete long after the mining boom has died.

Susan McGrath-Champ is an Associate Professor in the University of Sydney Business School's Discipline of Work and Organisational Studies. She has led an ARC-funded project on skills, training and migration, has worked in resource-related sectors in WA, NSW and Canada and is an editor of the Handbook of Employment and Society: Working Space. 

First published in The University of Sydney Business School

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