Economic issue: employment

FINANCIAL TIMES NOVEMBER 4 2004

Australia fights for quota of non-it staff

Computer professionals are still in demand. But accountants, engineers and truck drivers are also in short supply, writes Lachlan Colquhoun

The Howard government’s recent Australian election victory was determined largely on economic issues, and with the economy riding high and unemployment at a 20-year low of 5.6 per cent these are buoyant times for the country’s recruitment industry.

But instead of the continuing pre-occupation with information technology jobs as a bellwether for the state of the economy, the focus is shifting to professions such as accounting, engineering and project management which are not only in short supply but are now the target of competition from countries such as the US, whose economy is demanding similar expertise.

The Federal Government, for example, recently announced that accountants are back on the Migration Occupations in Demand List, as recruiters and firms struggle to attract qualified staff.

This is the first time since March 2003 that accountants have been on the list, and the policy change means accountants from overseas who want to emigrate to Australia as skilled migrants will receive bonus points under the government’s system if they have the appropriate qualifications.

They join blue-collar professions such as metal fitters, welders, sheet-metal workers, motor and refrigeration mechanics and pastry cooks on the government’s list.

Even less glamorous professions such as truck driving, which can pay more than A$80,000 ($59,000) a year, are in hot demand, reflecting a boom in the logistics industry which is also producing a need for supply chain professionals. Road transport is in a massive upswing in Australia as personal consumption levels around the country boom, and truck drivers not only have their pick of jobs in Australia but are being recruited to work in the Middle East.

In the accounting sector, the shortage was backed by a recent global survey of Australian finance managers by recruiters Robert Half International, which saw 38 per cent of respondents nominate accountants as the most in-demand finance professionals.

David Jones, the firm's managing director, estimates that there is only one qualified accountant for every four advertised jobs on the market.

Compliance measures, such as the Sarbanes-Oxley legislation and Australia’s move to International Financial Reporting Standards are driving the demand. But Australian recruiters also face strong regional competition from centres such as Singapore, where investment banks have expanded regionally and need more accounting skills.

“I had the pick of about three regional positions, and while none of them was really prepared to lift the remuneration to reflect that, at least I had a nice choice,” said one young accountant who, two years after graduation, is now leaving Australia for Singapore.

Recruitment agencies are telling a similar story, of interviewers flying in – not only from places such as Singapore but also from the US – in a bid to attract accounting talent, particularly in the auditing area.

Local recruiter Bob Olivier, of Olivier Recruitment, recently confirmed this trend, which has seen a growing momentum of local talent moving offshore.

Australia’s links with the Chinese economy, particularly in exporting resources, is also having an impact on the recruitment market.

In Western Australia, home to the iron ore industry and much of the offshore oil and gas fields that are now supplying direct to China, engineering and project management skills are in short supply, with some experts claiming the shortage is threatening the state’s A$30bn-plus boom.

In the WA’s north-west, one of the country's resources giants has 200 contractors working on the design stages of a multibillion-dollar project but is up to 30 staff short in areas such as draughtsmanship, engineering and design.

This is likely to continue. Australia has only one undergraduate course for geotechnical engineers and while this qualification is in demand, the course at Melbourne’s RMIT University recently closed because of a lack of interest.

In the IT sector, recruiters are predicting a slowdown shortly even though new data show an 11 per cent increase in IT job advertisements in the third quarter of this year, according to the IT agency Icon Recruitment.

Its survey found intense demand for IT professionals in New South Wales and Queensland, with the most advertised jobs being in areas such as technical/engineering, support, sales and marketing.

Hewlett-Packard’s Australian subsidiary has just lifted its almost four-year moratorium on graduate recruitment and is likely to hire 20 new graduates next year.

At its height, HP was hiring about 100 graduates a year but that was wound back virtually to zero as a result of the IT industry downturn.

At the Commonwealth Bank, Microsoft.Net experience is in demand, with the bank confirming it had hired 160 developers to help build its new customer relationship management system, one of the largest in-house developments under way in corporate Australia.

A bank spokesperson, who said the recruitment drive was “in line with the existing schedule”, added that the hiring spree would continue for the length of the project, which is due for completion in mid-2006.

Elsewhere in the financial industry, leading banks such as Westpac, the National Australia Bank and St. George have all recently announced substantial new appointments while in the wider industry, skills such as financial planning are in demand.

Local funds management group Perpetual is also in expansion mode, with plans to employ three times more than its current 21 in-house financial planners over the next three years as it diversifies away from its equities operation.

Insurer Allianz Australia also recently recruited 50 employees following the A$4m expansion of its operations centre in the city of Newcastle, about an hour north of Sydney.

All in all, this is a good time to be looking for a job in Australia. The number of job vacancies posted on the internet in August, for example, was up 7.2 per cent but some recruiters are complaining that potential applicants were not even bothering to look.

“People were watching the Olympics on TV, not the internet job boards,” says Robert Olivier.

Even people aged over 55 – a demographic long feared to be heading for the employment scrap heap – are back in favour. The retail industry, in particular, is targeting this age group for positions as shop assistants.

Anyone finding it hard to get a professional job will be able to turn to the call centre industry, which already employs 240,000 people in the country.

A September study by analyst group callcentres.net found that 62 per cent of call operators were planning to expand in 2005.

The sector, which grew at about 20 per cent a year from 1999, is tipped for another bonanza – yet another reflection of Australia’s buoyant employment market.