New skills initiatives for resources sector

In 2009, the National Resource Sector Taskforce was established. It created a range of employment models to quantify demand for skills.

 

Even under its medium growth scenario, the taskforce said there would be at least 30,000 construction jobs on new resources projects in every year to 2015, peaking at around 45,000 in 2012 and 2013.

 

It predicted the number of jobs in mining and gas operations may grow by 65,000 taking the sector’s direct employment to around 250,000 people by 2015. The WA Council of Minerals and Energy backs this up, predicting the State’s resource industry’s direct workforce will grow 58% by the end of 2012.

 

The Taskforce’s solution to this bourgeoning demand for skill and labour is hardly surprising. It said, in essence: drop some serious cash into vocational training. The Taskforce made 31 recommendations, urging more initiatives and money to provide more skills training. The Department of Education, Employment and Workplace Relations (DEEWR) agreed with the Taskforce, commit-ting to all 31 of its findings.

 

Most significantly, DEEWR will pump$200m into the Critical Skills Investment Fund (CSIF), which will co-fund training initiatives with industry to address acute shortages.

Under the new CSIF arrangement, to help forecast impending demand for skilled workers, resource companies will be required to provide a workforce impact statement for projects over $40 million. Companies will also outline their workforce needs at the same time as they apply to the relevant state or territory government for project approval.

 

To tap into the $200m pot, companies and the training providers they engage will jointly submit their skills training plans in a tender-round. They will compete to take advantage of the Commonwealth’s offer to co-fund winning tenders. Funding then will be distributed on a sliding scale, depending on the size of the organisation.

 

Federal Resources Minister Martin Ferguson said “we estimate the CSIF fund will help train 39,000 skilled workers over four years and target areas of critical need for the resources, construction, infrastructure and renewable energy sectors.”

 

So where does SkillsDMC, the lead agency for skills training in resources, fit into all this? As a lead agency, its role is to identify and quantify crucial skills needs and direct training providers to them, to assist companies to develop an effective tender and to assess the tenders, directing funding to the most crucial needs.

 

Steve McDonald, chief executive of SkillsDMC explained “our role as the lead agent is twofold: To make sure the funding process is given a high level of awareness, and to work with the employers to make sure they understand their rights, how their choices can be specified to the provider and to assist the employer in not falling for traps.”

 

McDonald reckons the CSIF is a winner. “It is a substantial shift to empower industry to have much greater direct purchasing power –to better understand what their rights are in negotiating the training provided.

 

“There is a real opportunity to get some specificity in to who is responsible for the components of training in this current model and if the will is maintained there is the opportunity for the vocational training system to put an end to some of the Chicken Little debates that go around some of this stuff.”

 

McDonald gave an example of how a typical scenario unfolds: “As the employer, you have 15 people. They are unqualified, and you want to get the gap analysis done to identify what the gaps are to get them from skilled to qualified.

“What you want from the training provider is –you need them to begin this work program immediately, which will address your current productivity and work needs. You need it to be done at your work site because you can’t afford to have those 15 guys get on a plane to go to a central location to be trained.

“So the considerations are: what is the best or the nearest you can get to that in negotiations with the training provider with the dollars you have got? So hopefully you can get to position to say ‘I will pay you to deliver this training outcome, but before we enter into the full agreement I want to test the package beforehand.”

 

McDonald said at SkillsDMC, this scenario might involve multiple companies who “would have a partnership with five, six, seven eight small businesses, medium sized business and they would all get the same level of service. [SkillsDMC] would be the lead agent. So we will have to be much more conscious of walking those SMEs through the partnership.”

 

McDonald explained “the training system is the supply side. It is a partnership, and in every good partnership the value is only as good as the ability for each side to under-stand their responsibilities. So that means the demand side also needs to give clear specifications of its needs.

 

“There is also within that [partnership] the need to understand that a lot of workforces, especially resources infrastructure, have a lot of people who are skilled but not qualified.”

 

Jodie Stevenson, SkillsDMC’s Tasmania regional manager agrees with McDonald. She said the CSIF is a big improvement on previous skills funding initiatives. “It is a fundamental shift in the way the government is doing business, in that it is going to industry to ask what they want rather than going to training providers to see what they can deliver.

 

”However, even with this big new initiative, she fears the CSIF might not be significant enough to address the shortage. “We are hoping that the government will review it, because the demand currently far outweighs the current support through the CSIF.”

 

In her role, Stevenson deals directly with local industry, working with it and training providers to establish targeted skills programs. In light of this great demand, Stevenson said long sighted planning rather than the CSIF might better address the resources skills shortage.

 

“It would be fantastic for the government to review this in light of maybe having ongoing funding rather than a tender round, because they would have the workforce planning evidence in front of them and that workforce planning is the path to the future.”

 

Stevenson explained that Tasmania faces its own specific challenges, with the “lowest numeracy and literacy in Australia, and the lowest numbers of those who have achieved Certificate III and above.” So a more specific, targeted approach would be better, Stevenson said. She explained that skills training providers to the resources sector assess their packages on the basis of the number of employees with a company that a have a Certificate III.

 

“Unless the individual on this mine site has already got a Certificate III, then he may not be targeted to provide those skills sets to, for example, civil construction to the mines sector, elevated work platform, tagging, dogging, rigging, all of those sort of skills sets.

 

“If we have Certificate III operators, we will step up the good operators to supervisors. We will provide them with a Certificate IV, but you can only do that if you have the support from the training provider,” Stevenson said.

 

“Through the SkillsDMC skills planning tool we have identified a tripled demand for Workplace Supervision and Diploma in OH&S, and also Certificate IV in Underground Mining.”

 

So far, the industry response to the National Resources Sector Taskforce has been positive. However, many stakeholders and representative bodies are cautious, and appear worried that increased training of local workers might mean a reduction in their access to skilled workers from overseas.

 

Most controversially, Enterprise Migration Agreements for large scale resources projects are set to be introduced. As part of these agreements, DEEWR said the commonwealth would agree to finalise applications within five working days of a complete application being lodged with the Department.

 

Australian Mines and Metals Association chief executive Steve Knott said “the initiatives announced today will go part of the way towards addressing the industry’s long-term concerns, however, in saying that they in no way negate the need to further improve employer access to vital schemes such as the skilled migration visa scheme.”

 

Association of Mining and Exploration Companies (AMEC) chief executive Simon Bennison said that future changes may not flow through beyond large scale projects.“AMEC remains concerned that mid-tier and emerging miners may not be able to take advantage of the proposed Enterprise Migration Agreement (EMA) process that will apply to ‘mega’ projects.

 

“This is unacceptable and inequitable to our members, who are spread throughout the nation and faced with the same problems as large multi-national conglomerates in attracting and retaining skilled labour. EMAs should therefore be available for all mineral resource projects, irrespective of their value or size. They should also apply to all phases of mining projects, not just the project construction phase.”

 

On the other hand, the Australian Council of Trade Unions argued that a change to skilled migration may disadvantage local workers. President Ged Kearney said “any plan to ease labour shortages must be matched by investment in skills training by employers because an over-reliance on skilled migration has in part led to a labour shortage in the resources sector.

 

“Right now, the resources sector takes a short-term, short-sighted approach, overusing the 457 visa and offering high wages to poach from other sectors –effectively robbing Peter to pay Paul. A 10 per cent apprentice-ship target should be adopted, as a minimum, if Australia is to turn the skills shortage around and meet future growth needs.”

 

The Australian Mines and Metals Association (AMMA) and WA Council of Minerals and Energy were supportive of the Government’s initiative. However, both organisations stressed their concern that the government improve the skilled migration system.

 

McDonald said that although current tenders for funding under the CSIF have concluded, “it is not a once off point in time. It’s a three year funding program and the submissions were only for round one. It is a reasonable expectation that the next round of funding will be announced early in the2011/12 financial year.”