A recent oil & gas industry report that we compiled indicated the vast majority of companies in that sector (within Australia) expected to increase their headcount across the next 12 months. Numerous civil infrastructure projects have been announced, bolstering the civil engineering and construction markets and, while some sectors continue to struggle, the civil consultancy and oil & gas areas look set for a prosperous year ahead.
So, what happens when the market picks up?
Over the last couple of years it has been much harder for new engineers to start their careers. This means that in the not too distant future there will be a shortage of less senior staff.
A senior manager within a large international civil consultancy recently told us that a few years ago they were competing with other companies at graduate fairs, and that graduates were fielding bids to secure their talents. More recently, following the downturn, they advertised a junior casual role and received almost 200 applications. It has been a tough time for engineering graduates of late, but improvement in market activity means that we are in danger of going back to that more competitive environment for juniors, with less juniors available than ever before.
Pre-downturn, there were simply not enough people graduating from engineering courses in Australia to fill demand. Migrant employment filled some of the gaps, but most companies still found themselves with a shortage of skilled engineers.
Throughout the downturn recruitment shifted toward more senior strategic hires, and those with lower levels of experience (and requiring high training costs) were not a priority for many. Staying in business today became the main focus, and the majority could not afford to take a longer term view of their talent pool.
However, once the storm has passed, there is then the danger that there are not enough lower level staff available, as many did not get hired and trained during the downturn, and therefore they have not worked (making them less appealing to a prospective employer), or they have worked in a different discipline (meaning that they may now be out of the industry for good, OR that they are at the level of 'new graduate' as they have no experience in their field). Engineers with 2-5 years experience will be very much in demand, and in very low supply.
How will companies find them? For the most part, they will need to import (which will be difficult, as other countries face similar issues), look to competitors where possible, use a more senior staff member to fill the gap (which is expensive), or train graduates from scratch (which is time consuming, and may not be possible depending on project demands).
It would be wise for those who are picking up projects to restart their graduate/ junior pipeline as early as possible, and for all to look at strategies for retaining junior staff as the market picks up and becomes more competitive.
We appear to be on the up again, and good planning is essential for managing the skills shortage once again.
