Skills demand

THE struggle to fill skilled positions in Papua New Guinea may ease up as Australia’s resource boom slows down.
Skills demand Skills demand Skills demand Skills demand Skills demand

Published in the Feburary 2012 PNG Report magazine

Agricultural commodities have been hit but PNG's key exports of copper, gold and oil are proving to be quite resilient to significant price falls in these tougher global economic times.

However, Australia isn't quite as sheltered with its crucial coal and iron ore export prices off the boil.

PNG's neighbour, Queensland, seems to be feeling the pinch worst of all. Japanese steelmakers are paying $US165 a tonne for the state's premium hard coking coal this quarter yet it fetched more than $300/t during peak demand in 2011.

A recent Queensland Resources Council survey of 26 resource sector chief executive officers revealed their companies had shed at least 3372 jobs in the state during the last half of 2012 and at least 450 more job losses were expected this year.

The Australian Bureau of Statistics also registered the first fall in national mining employment since 2009 in its November data set. A total of 263,300 people were employed full-time, which was a 3% fall from the previous August data and almost a 5% fall from the all-time peak in May 2012.

Project cancellations are also symptomatic of industry downturns and seasoned recruiters are already commenting on the dire state of Queensland's construction scene.

Cadden Crowe managing principal Scott Roberts says it has never been hard to fill expat roles for PNG.

"The amount of construction people we are able to access reflects the state of the economy in Australia. The construction industry, well in Queensland, it's awful," he said.

Cadden recently helped a local client with its expansion plans by filling 10 skilled positions from Queensland at short notice.

"We're talking about tradesmen, engineers, building supervisors, civil supervisors, CAD operators," Roberts said.

"All that stuff is pretty ordinary down here at the moment. These guys were ready and available and had the quality to go up there."

Other than an improvement in Australian poaching opportunities, the recruiter is not seeing any major changes yet to PNG's skills crisis.

One difference to demand is that the peak construction period of the PNG LNG project has passed as it gets closer to first exports in 2014.

But Roberts believes the mining projects coming online will create enough skilled jobs to replace the numbers lost at PNG LNG, especially the Wafi-Golpu copper-gold project shared by Newcrest Mining and Harmony Gold.

"I see opportunities for some of the skilled people that have evolved through the LNG project to find employment elsewhere in the country as some of the mining projects start to go in various stages of construction in the latter part of 2013 into 2014," he told PNG Report.

In the petroleum field, Roberts expects jobs to come from Horizon Oil and Talisman Energy's condensate and gas plants in Western province, while he keeps tabs on progress to commercialise InterOil's Elk-Antelope discoveries in Gulf province.

"My best guess is that there is enough development beginning around infrastructure, mining and new LNG projects to absorb most of the people that are skilled," he said.

He can also foresee future development in PNG's telecommunications, roads and ports as the government starts receiving cash flow from the PNG LNG project.

In regards to the pace of job hopping by many of PNG's skilled nationals chasing the best pay, the recruiter only confirmed it was still frenetic.

"They are [frequently changing jobs] and for small amounts of money. That is going to continue to happen," Roberts said.

"It's just very hard to keep people through to the end of a project. Some companies pay contract completion bonuses to keep people involved."

Given that many of PNG's employers cannot match the salaries offered by mining and petroleum companies, Roberts offers some other strategies to keep staff.

"The whole of PNG has accommodation issues, savings issues, education issues and short-term contracts for money don't necessarily address them," he said.

"Innovative ways to enable your people to meet those needs can build a loyalty. But you have to be big enough to do that because there is a cost."

Some skilled workers also forget about traditional perks when they pursue higher paying resource sector jobs.

"A lot of people go on contract work and they only get paid for the work and they forget that you haven't got annual leave and sick leave and all those sorts of things," Roberts added.

"People have got to see the whole value of employment contract."

There are some businesses which long ago resigned themselves to the fact they wouldn't hold onto their skilled staff.

"One client knows they are going to move," Roberts said.

"They wish them well and encourage them to come back when they have the experience. I reckon that's pretty enlightened - it's like an alumni [association]."

As previously covered in our August/September edition of PNG Report, there is a growing trend for skilled PNG nationals to seek better opportunities overseas.

Roberts was recently involved in identifying and later exporting 14 PNG diesel fitters to work for one of his clients in Australia.

"They've all done well," he said.

"Will they come home? Maybe not. They're here for the long haul. After they have achieved 12 months their new employer is going to support them to move them from 457 [visas] to permanent residency and bring in their families.

"That's a net drain to the nation of PNG. These guys will never forget where they are from and they will never forget to send money home.

"It's going to have other benefits but it's lost talent for sure to the Australian market. That will happen more and more with people that have international qualifications but it's not going to be thousands, it's always going to be hundreds."

The underlying cause of PNG's skills crisis is a slide in education standards over many years.

Prime Minister Peter O'Neill rightly has improving education high on his list. In the case of recruiters, they want schools to improve core skills around language and mathematics so more people can do technical training.

"There's a huge gap between what it used to be and what it is today," Roberts said.

"You hear anecdotal stories of people going to universities in the country that are virtually illiterate. It's really worrying."

Failures in tertiary-level education outcomes are creating separate skills shortages in professional fields.

"I think it's really difficult to find quality people for roles that are traditionally held by citizens - accounting roles, human resources people - those support roles," Roberts said.

"The talent pool and depth is really shallow. They probably need to bring in non-nationals in those roles in the short to medium term to redevelop the talent pools because they haven't been well educated and trained."

As for PNG's recruitment scene, Roberts expects a few recruitment firms to pack up and go once PNG LNG project construction winds down.

"But those of us who have been there long-term will still be there and I think the economy is a lot stronger than it ever was."

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