Dealing with the skills crisis
New figures released by Best International in early Feb show demand for Information Communications Technology labour skills in the Australian market is at an all time high, rising 19% from the start of the financial year and recording a 10 percent increase over November 2006 figures.
At present, a large and expensive advertising campaign promoting New Zealand to the Australian market emphasises the high availability of jobs, underpinning just how high profile the talent drought has become on both sides of the Tasman and how important it is that business looks at new approaches to filling the skills gap. A high percentage of organisations are looking for qualified migrants to fill roles. In the Australian Financial Review (9 Feb) Rio Tinto singled out WA as one of the most expensive places in the world in which to run a major resource project, reflecting how severe skills shortages have driven up labour costs and restrained economic growth.
Rival miner BHP Billiton also confirmed a plan to hire hundreds of foreign workers on temporary visas for a looming $2 billion expansion of its Pilbara iron ore operations, saying there were not enough local tradespeople to take the jobs.
Department of Immigration and Citizenship deputy secretary Abdul Rizvi recently told an estimates hearing that there had been a 17 per cent increase in the number of 457 skilled migrant visas awarded in the six months to December 31, 2006, compared with the same period the previous year. The 457-visa scheme allows foreign workers to come to Australia temporarily to fill particular skilled vacancies if an employer cannot fill the positions locally.
A parliamentary inquiry in Australia is currently examining the 457 scheme, which many critics say is poorly monitored by the Immigration Department, leaving migrant workers open to abuse and underpayment of wages and entitlements. As a result the immigration department and Office of Workplace Services (OWS) has developed a list of rogue employers and is clamping down heavily.
Another common fix to the skills crisis is the use of independent contractors. In recent years labour hire companies have had an increasing profile in the market. As a result, a number of policy issues have emerged as regulatory bodies have begun to clamp down on workers being employed as contractors, but under working arrangements more similar to those of employees.
There are also management challenges when using contractors that typically revolve around having an efficient model through which to obtain new talent. In larger organisations procurement may determine master vendor contracts or stipulate preferred suppliers. HR is then responsible for managing the relationships but in a market where an increasing proportion of the workforce may be Independent Professionals, this can create management complexities.
To drive real business benefits organisations need to combine their procurement strategy with their HR model in order to streamline and reduce unnecessary wastage. Many organisations also find it hard to budget accordingly when using contractors and end up paying high costs of placement or finding that the variable billing costs escalate out of control.
An increasingly common cost variable is the import of skills from outside Australia or New Zealand. The current skills drought means many companies are having to look further afield to secure the specific talents needed for short or long term projects, and many ANZ based companies now have internationals at the heads of the business. There area number of hidden associated costs that must be considered and it is here companies like Expense Reduction Analysts (ERA) work closely with their clients to manage the complexities, reduce the risks and contain costs.
Warren Ratliff, Operations Manager from Expense Reduction Analysts commented, "Our clients are finding that they cannot plug the recruitment leak in their businesses. Experienced staff and newly qualified graduates are being lured offshore by greater opportunity and better remuneration. There is still a lack of sufficient qualified migrants to fill this gap and many have unrealistic salary expectations. ERAS HR & Recruitment specialists can dramatically reduce business expenditure on recruitment. We are experts in recruiting a pool of untapped resources like older workers, women returnee's, part-timers, migrants or independent contractors. 26.11.2007
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