SA Major Projects & Workforce Impacts - FTH Skills Council

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Creating Awareness In late 2006 the Industry Skills Boards in South Australia saw the need to make industry and government aware of the workforce impact of major projects, and to encourage industry and government to focus resources to solve the skills and labour shortages in a holistic manner across the industries and the state, rather than acting independently. Key major project proponents were contacted directly to discuss the employment needs of their projects. This proved extremely difficult and it was obvious that many of these industry contacts did not have a clear picture of the direct workforce and employment needs of their projects and little understanding of the indirect needs or impacts. This led to a number of recommendations for industry and government which are explained in detail in the Workforce Impact SA Report. The nine Industry Skills Boards which represent all industry sectors in SA, created a small collaborative project with the Department of Further Education Employment Science and Technology (DFEEST) and the Australian Institute of Social Research, based at Adelaide University to: • identify major projects and their workforce impacts • identify the indirect implications such as transport, power, housing infrastructure and community services • provide recommendations to facilitate a whole-of-government and appropriate industry response • develop a simple analysis and reporting format tool that can be repeated annually. Due to the significance of the recently announced major mining and defence projects, the State Government has created separate skills institutes in these areas. These are the Defence Skills Institute (which is incorporated in the Defence Teaming Centre), the Maritime Skills Centre and the Mineral Resources and Heavy Engineering Skills Centre. Major projects were identified initially, based on the 2006 Major Developments Directory produced by the Department of Trade and Economic Development. This list was added to by using the Industry Skills Boards networks, the projects known to the Construction Industry Training Board and the regional knowledge of the DFEEST Employment and Skills Formation Network, which has representatives operating in each of South Australia’s 17 regions. It became evident in this process that there are a large number of projects under consideration that will significantly add to the list in the near future, making the need for action on the workforce and skills impact of the projects even more critical. It also became obvious to the Industry Skills Boards Representative Group that one of the keys to facilitating industry and government response was to create a matrix of major projects. Businesses are encouraged to consider where they fit by industry and region, and to think about and plan for the workforce (and other) impacts of major projects. The matrix will be available for industry and government. It is recommended that the matrix is updated regularly as a valuable tool for “future-proofing” South Australia’s workforce needs. Graham Oades Project Manager, SA Industry Skills Boards Joint Project SA Major Projects & Workforce Impacts
Workforce Impacts of Major Projects Typical Major Project Employment Creation Employment Project Employment Indirect Employment The Workforce Challenge Population growth in South Australia has been well under 1% this decade – one third of the 1960s growth. Within ten years, one third of the state’s workforce will be approaching retirement. The number of people of working age will start to reduce from 2011 and currently for every young person entering the workforce there are seven people over 45 years of age. Estimates suggest that between 2005-2006 and 2013-2014 there will be 338,100 job openings created by retirement. (Source: Centre for Policy Studies 2005) South Australia has over 200 approved major projects across all 17 regions. The combined value of these projects is more than $30 billion. Approximately 90 of these projects ($12 billion) are currently in the construction phase, some nearing completion. Added to this, there are at least twenty major projects under consideration that will shortly be approved or become public. The 200 plus major projects span all industry sectors with major concentrations in mining, defence and construction. Approximately $200 million worth of projects such as school expansions and energy projects have multiple locations across regions that do not have individual values. These projects are included in the matrix and highlighted as “multi regional”. The direct and indirect workforce (employment) and other impacts of major projects will be felt most strongly in the regional areas of South Australia that have a disproportionate value of these projects in relation to their population. The regions also have less infrastructure, housing and transport capacity to deal with the flow-on impacts of the projects. Planning Phase Construction Phase Operational Phase Time The diagram shows the impact major projects have on indirect employment. The indirect employment impacts are rarely considered or analysed, except for extremely large projects such as Olympic Dam and the Air Warfare Destroyer projects. This major projects “good news”, dominated by mining and defence, is enhanced by the prediction of strong ongoing general economic activity and the availability of investment capital. With lowering unemployment and the mass retirement of baby boomers, the focus needs to move to the impact on the available workforce and whether it has the right skills. Major projects will accelerate the workforce challenge South Australia is now facing. New indirect jobs The BHP Olympic Dam project and other major mining projects are examples of how significant the direct, indirect and workforce impacts of a major project can be. Between 2006 and 2014, as many as 18,000 new indirect jobs may be created from mining projects. This figure is close to half of South Australia’s current unemployment numbers. The estimate increases to between 2500 and 3000 new jobs per year over the next eight years when the indirect impacts of the defence projects are added. The workforce solutions to this issue must involve the unemployed (approximately 40,000 people), the underemployed (those who would like to work more hours) and those discouraged jobseekers who are not participating due to a lack of the right opportunity, incentives, skills and a host of personal and societal reasons. Estimates suggest that the current total number of South Australians who could realistically be drawn into the workforce is over 100,000 people. From an economic point of view, it is critical that this group is assisted into employment as openings become available. If this does not occur it is estimated that within ten years the labour demand may exceed supply by between 10,000 and 12,000 people per year. Inter-industry transfer will be generated as workers move from lower paying industries, creating significant pressure on high labour cost and low margin industries. Some analysts are predicting this may restrict further economic growth from 2014 by 40%. SA Major Projects & Workforce Impacts
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SA Major Projects & Workforce Impacts - FTH Skills Council

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