Energy skills demand for $770bn projects

It’s a tall order in a labour market that’s already being stretched from every direction.

With the population projected to reach 36 million by 2050, our wide brown land will need to be geared up for the influx. Then comes the pressure to transition to low-carbon energy alternatives.

IPA CEO, Brendan Lyon, says this will require a whole gamut of niche skills.

“When you’re talking about changing the entire energy mix from a traditional coal-based load to a renewable base, intermediate and peak load, it requires a different base of skills – specialist engineers, construction specialists, technical, project and financial advisors and most of all, skilled labour – to be able to deliver these projects,” Mr Lyon says.

“With the worldwide trend towards a low emission energy network, there’s global competition for the best skills.”

In addition, there’s still the huge quantity of talent being swallowed up to feed the world’s appetite for Australia’s gas, coal and every other mineral we can dig out of the ground.

Add to this the imminent retirement of a large contingent of ageing workers and the lure of lucrative overseas contracts, and the scene is set for one of the fiercest wars for talent this country has ever seen.

Re-building flood-ravaged parts of Queensland will be another labour-guzzler, with an estimated $1.6 billion to be spent on repairing infrastructure and homes.

The latest Clarius Skills Index lists engineering and construction among the key skills shortage areas, despite pressure for workers having eased somewhat over the quarter up to December, 2010.

However, Clarius chief operating officer, Kym Quick, says the demand for skilled labour is already above what is normally experienced in the early part of a year.

“While the threat of a skills shortage had a temporary reprieve, we expect recent natural disasters will quickly turn that around and we will have greater demand for skills stretching over several quarters,” she says.

All together, there’s a backlog of about $770 billion worth of infrastructure projects, ranging from energy to transport, health and education, according to a 2008 Citigroup report.

Furthermore, the Federal Government’s Bureau of Agricultural and Resource Economics (ABARE) lists about $110 billion worth of mineral and energy projects either committed or under construction: 41 of them energy and 28 mineral projects, plus six mineral and energy processing projects.

“A continued lack of certainty about the future cost of carbon has led to many of these baseload projects being stalled,” IPA’s Brendan Lyon says.

Big jobs in development include the Gorgon Project, which is now entering its second year of construction. The development of gas fields off Western Australia’s north-west coast is expected to directly and indirectly employ close to 10,000 people at peak construction, and considerable numbers will be required for its ongoing operation.

The tug of war for talent between the energy, infrastructure, mining and construction sectors continues to put upward pressure on wages.

In Queensland, for example, construction costs in the years preceding the GFC were rising by about 10 per cent per year, and it’s a similar story in other sectors.

And money is no longer a strong enough lure on its own.

Many employers are ramping up their competitive advantage with attractive career progression programs.

General manager of Origin Energy’s Generation, Peter Israel, says between 30 and 40 per cent of staff are in some form of active training at any one time.

“It’s a big commitment we make for a few reasons: we don’t want people’s skills getting stale, as modern technology comes in we want it to run properly, and people also need to see their careers have some positive destination,” Mr Israel says.

The heavy focus on training is also a way for the company to create its own skilled workers when they aren’t otherwise available. Origin’s Generation division has grown by 500 per cent over the last five years, with employee numbers up from 60 to 220.

“As the energy industry changes with more modern technology and lower carbon technology and the need for wind, hydro and geothermal infrastructure to be built, we’ll be seeing a demand for more skills that sit within those areas. If we can’t find people with those skills, we’ll have to lift the level of training around that,” Mr Israel says.

This process often starts early, with companies keen to get university students committed to their ranks.

Monash University’s civil engineering director of teaching, Associate Professor Bill Wong, says around 30 to 40 per cent of final year civil engineering students already have jobs in the sector.

Engineering graduates with double-degrees are most in demand, with management and finance knowledge high on the list.

“Years ago we were obsessed with producing engineers with good technical background and that’s all,” Professor Wong says.

“Now, that’s not good enough. The complexity of projects and the international outlook of the profession today means they need multi-faceted skills.”