Insights Into Immediate Labour Market Challenges

THOUGHT LEADERSHIP PIECE

Published in Business News, Monday 14 February 2022

Three topics are top of mind in early 2022: COVID-19 and the virulent Omicron variant; labour shortages; and Western Australia’s ongoing hard border – each relevant and all related.

So acute is the need for workers in WA that the Committee for Perth is undertaking the Race to the Top project in order to find solutions to meet both immediate and longer-term needs.

The first research piece informing the project provides insights into the Western Australian labour market’s immediate challenges. It finds that, commensurate with a buoyant economy, WA has experienced considerable growth in demand in workers since May 2020 and that ongoing border closures have negatively affected net overseas migration thus compounding a tight labour market. These, plus part-time, under-employed workers, or those not participating in the workforce, make a complex environment in which to find any quick fixes.

Looking at the data, there has been an underlying pattern of growing demand over the past decade despite a volatile economy in that period.

WA is a skills importing economy due to a shallow labour pool in areas of high demand, a lack of critical mass of workers and a mismatch of skills. Over many decades we have relied on workers coming from over east and overseas to fill the gaps.

On St Georges Terrace, big corporates are competing globally for talent seeking the best and brightest in technology, mining and engineering. Throughout the State, skill deficits are observed in health and aged care facilities, restaurants, farms, factories and construction sites, to name some of the most obvious. With demand for workers so strong, it is surprising that the data shows that some people would work more hours but can’t secure them and people actively looking for work experience weeks between leaving one job and getting another.

Average Job Search by Selected Industry and Occupation of Last Job Held, WA, August 2010–August 2021

Source: ABS (2021e)

To address the most immediate issues the following is required:

• The time taken to get people between leaving a job and starting a new one needs to be reduced. In one of our hottest industry sectors – mining – there is growing lag time. In January, it was more than 25 weeks yet those in health care and social assistance had experienced a decrease to under 15 weeks.
• WA needs to be top of mind as a destination to live and work. Given the fierce competition for workers nationally and in some sectors internationally, our reputation as a safe destination can be leveraged. However, people wanting to relocate will also need assurance that they can move about freely rather than be bunkered down in the State indefinitely. A return to pre-COVID-19 levels of overseas workers is unlikely without the removal of arrival caps and border restrictions.
• Nationally, there has been an increased demand for workers with a certificate III or above qualification, therefore industry needs to better communicate its demands and the training sector needs to be more agile in responding.
• For people who are employed part-time or are underemployed, their skills need to be better utilised. There is a structural barrier to women who want to fully participate in the workforce and this relates to a lack of quality and affordable childcare. Older workers, those over 65 years of age, felt pushed out in the last economic downturn and are seeking flexible options to stay at work while balancing their leisure time.

To date, we have operated with a just-in-time workforce mindset which, as is currently being experienced, is not sustainable. To meet current and future needs, we need to adopt a more strategic and responsive approach.

Marion Fulker AM

CEO, Committee for Perth

Adjunct Senior Research Fellow, UWA