Australia’s severe shortage of skilled people requires industry-led solutions supported by government

skilled people

This time last year, when anyone asked me for an annual outlook, all I was prepared to say was that market conditions in 2021 would be uncertain. I was right. 2021 was just as unpredictable as 2020, with further lockdowns and border restrictions.

Unfortunately, I suspect that 2022 will be equally as uncertain—albeit for different reasons. The dominating issue may not be COVID-19. Instead, industry could be staring down the barrel of a severe shortage of skilled people.

A severe shortage of skilled people

Prior to the outbreak of COVID-19, Australian industry was already facing a looming workforce crisis, including a severe shortage of skilled, qualified welders. According to feedback from Weld Australia’s members, the COVID-19 pandemic has only exacerbated this shortage. The industry is facing a shortage of labour, from Welding Supervisors and Inspectors, right through to welders. Finding competent, skilled, experienced welders is becoming more and more difficult.

Welders are more in demand than ever with several large-scale, high-value projects on the horizon, from the Federal Government’s $90 billion Naval Shipbuilding Program, through to major infrastructure projects such as the $12 billion Sydney Metro project, and the $5 billion Melbourne Airport Rail Link.

And yet, the number of welding trade workers in Australia dropped by eight per cent in the course of just five years; from 75,800 in 2014 to 69,600 in 2019. In addition, completion rates of welding apprenticeships, including a Certificate III in Engineering (Fabrication Trade), continue to fall by as much as 23 per cent annually.

Australia is also home to a rapidly ageing welding workforce, with approximately 30 per cent of Australia’s existing welding workforce aged over 45 years. This heavy proportion of older skilled trade workers, particularly welders, puts into focus the looming issues that sectors such as defence are likely to face when baby boomers finally reach retirement age. Welding positions will simply become impossible to fill, particularly given the projected increased demand with several large-scale, high-value projects on the horizon.

This shortage of welders has been fuelled by a lack of short-term workers and immigrants, with our international borders closed due to COVID-19. Weld Australia members have reported that there simply isn’t the same labour pool available to complete work.

Industry training Initiatives

Australian industry is not taking this skills shortage lying down. Industry is quickly coming to realise that they cannot continue to rely on Government to solve the problem. There must be a ‘pull’ strategy that engages students through close collaboration between schools and companies.

Weld Australia member, JRS Manufacturing is a strong advocate for this type of ‘pull’ strategy. Based in Toowoomba, JRS Manufacturing has recently established their own skills academy. The skills academy is not only training people to work in their own business, but also other businesses in Toowoomba. Weld Australia is set to work with JRS to help ensure the long-term success of this exceptional initiative, which will be launched later this year.

Similarly, another Weld Australia member, Precision Metal Group (PMG) began partnering with Parramatta Marist High School to develop a metals and welding training program in 2020. The shared vision is to have more and more students exposed to the industry and certified as armoured vehicle welders before they graduate from Parramatta Marist, providing them with pathways supported by a skill set in demand by the Australian Defence Force. To begin, Year 10 iSTEM students rotate through fortnightly two-hour welding core skills workshops, while self-nominated students undertake intensive welding training at PMG’s facility in Wetherill Park.

Australian welding and fabrication businesses need to invest in the future of their own workforces and play an active role in the training of welders. Australia will need an additional 28,000 welders by 2030 based on the existing pipeline of work. Industry has a vital part to play in filling these roles.

Innovative technological solutions

Australian industry is also developing and investing in cutting-edge technology to help ameliorate looming skills shortages. Automation, robotics, and collaborative robots (also known as cobots) are changing the way the welding and manufacturing industries work.

According to a recent report by commissioned by Google, automation has the power to deliver a $2.2 trillion boost to Australia’s national income by 2030 from productivity gains. This includes $1 trillion boost from accelerating the rate of automation and a $1.2 trillion boost from transitioning Australia’s workforce to higher skilled occupations.

Weld Australia members have demonstrated extraordinary innovation and invested in leading-edge technology in order to maintain production schedules and grow their businesses throughout what has been an incredibly difficult time over the last two years. It is this ability to innovative that has continued to ensure that Australian manufacturers are resilient, profitable and readily able to compete on the world stage.

Many of our local SMEs are at the cutting edge of research and development. For instance, the Artificial Intelligence (AI) and Industry 4.0 methodologies and technologies developed by Queensland-based Weld Australia member, IR4, are setting global benchmarks in efficiency. It is for this reason that IR4 (in partnership with Weld Australia and QUT) is engaging with global prime contractors to improve their welding cobot capabilities for major projects.

One industry program that is working to accelerate the pace of the adoption of cobots in Australian industry is the ARC Training Centre for Collaborative Robotics in Advanced Manufacturing. The Centre was established under the ARC Linkage Program – Industrial Transformation Training Centres. Its aim is to unite manufacturing businesses and universities to develop collaborative robotics applications. Queensland University of Technology (QUT) is acting as the Administering Organisation and Weld Australia is a Centre Partner. Just some of the other Industry Partners involved include InfraBuild, IR4 and LA Services.

Government support – or lack thereof

Clearly, Australian welding and manufacturing businesses are investing in the future of their own workforces and playing an active role in the training of welders. In tandem, local industry is leveraging the raft of benefits offered by advanced technology like cobots. Increasingly, advanced technology is becoming a critical factor in the success of globally competitive welders, fabricators, and manufacturers.

However, local industry needs the support of Federal and State Governments, as well as private industry. According to recent industry analysis, pre-fabricated imports continue to increase. As of 30 September 2021 (at the existing run rate), fabricated imports were expected to reach 950,000 tonnes for 2021, an increase of 15 per cent from the previous year.

This same industry analysis confirmed that China continues to be the significant import country for fabricated steel commodities. This is despite the fact that China has bans and significant import taxes on a whole raft of Australian products, from coal through to wine and seafood.

One does not have to look too hard to find examples of imported fabricated steel. The Cross River Rail Project in Brisbane called for two shoring tower systems, each of which consisted of 139t of steel. One of the towers was sourced locally, the other offshored. Similarly, the construction of the new 42,000 sqm Woolworths Distribution Centre in southeast Queensland relied upon 1,200t of imported steel.

These kind of short-sighted procurement decisions are making local market conditions impossible for local fabricators. We need a commitment from Federal and State Governments to increase levels of local content for all procurement decisions. We need the big corporates to award local contracts to local companies.

The strength of the sovereign capability of Australia depends on Australians investing in Australia. It might be cheaper in the short-term to buy from places like China, but all this does is weaken our economy.

If we do this, local companies will then be in a position to invest even more into their own businesses, and to strengthen our manufacturing industry from within. Business innovation encourages the creation of strong and lasting new businesses and the creation of new and better jobs, which together support a move to higher living standards. Innovation investment by business is crucial to our ongoing prosperity. But this can only be fully realised with the onshoring of fabrication work by federal and state governments, as well as big corporates.