Hard border triggers 8pc pay hike in trades ‘bubble’ (Financial Review Excerpt featuring REMSMART’s Allan Feinberg)
This excerpt was republished from the Australian Financial Review.
High-demand trade roles are set to enjoy pay rises of up to 8 per cent in the year ahead as hard state borders exacerbate an existing skills shortage.
BDO’s managing director of remuneration, Allan Feinberg, said a ”bubble” had emerged in a number of trades that were exposed to both the multibillion-dollar iron ore projects in Western Australia and the government-funded infrastructure blitz in the eastern states.
”There is a lot of pressure on those trade roles – we are seeing a whole new ballooning market in rail-based roles like signal technicians, rail technicians, and rail maintainers,” he said.
Fortescue Metals Group’s $US1.27 billion ($1.8 billion) Eliwana iron ore project has required the laying of 143 kilometres of new railway in Australia’s north-west, while Rio Tinto’s $US2.6 billion Koodaideri iron ore project involved 166 kilometres of new railway in the same region.
Those projects come as the Victorian government spends $11 billion on a new railway line beneath central Melbourne and as Queensland spends $5.4 billion on the Cross River Rail project.
Mr Feinberg said wages for rail specialists and other roles like mechanical fitters had risen by between 5 per cent and 8 per cent over the past year, and he expected a similar rise in the year ahead given state borders were limiting the mobility of the workforce.
”We in WA were already battling to find staff and that was when we had the benefit of going east. Now it is only within our bubble in Western Australia, and you have new mines and companies are willing to pay,” he said.
WA Premier Mark McGowan has resisted calls from the Morrison government to loosen the state’s border limits, pointing to the fact that a lack of COVID-19 community transmission in WA is allowing Australia’s iron ore industry to flourish at a time when rivals in Brazil are being hamstrung by absenteeism caused by the pandemic.
WA is also the nation’s biggest producer of gold – another commodity that is enjoying bumper prices amid the pandemic – and the fly-in fly-out nature of the WA resources sector means both iron ore and gold would be vulnerable if the coronavirus were to spread in WA.
Rio, BHP and Fortescue have relocated thousands of people to WA this year to ensure employees who commute from the eastern states to the Pilbara can continue working without having to navigate two weeks of quarantine every time they cross the WA border.
Bis Industries employs close to 2000 people across Australia and Indonesia, providing logistics and site services to mining companies like Newcrest, Newmont, Glencore and Roy Hill.
A large proportion of the company’s work is in Western Australia, and chief executive Brad Rogers said labour in the state was becoming expensive.
“One of the challenges for our business, and this is common among other service providers and our customers in WA, is getting resources to be able to service growth when borders are closed,” he said.
“I think we are starting to see some pressure around the cost of labour, which is normal if you are needing more labour and you can only source in a finite pool which is WA, and particular skill sets can get quite pressured in times like this so we are starting to see that sort of thing.”