Labour Market Research Engineering Professions Victoria April 2016
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1 ISSN: Labour Market Research Engineering Professions Victoria April 216 Occupations in cluster Rating ,12,14,15 Civil Engineering Professionals (exc. Quantity Surveyor) Recruitment Difficulty (Structural Engineers) Electrical Engineer Recruitment Difficulty (Senior Roles) Mechanical Engineer No Shortage Mining Engineer (exc. Petroleum Engineer) * No Shortage Petroleum Engineer * No Shortage * Occupations assessed at the national level. Separate ratings are not available for Victoria and the specific survey findings for these occupations are not discussed within this cluster report. Key issues In 216, employers experienced an increased difficulty recruiting for staff within the engineering professions cluster as demonstrated by the ratings of those occupations assessed at the Victorian state level despite marginally higher proportions of applicants and suitable applicants per vacancy overall: o Civil engineering professionals moved from a no shortage rating in 215 to a recruitment o difficulty (structural engineers) rating in 216 Electrical engineers moved from a no shortage rating in 215 to a recruitment difficulty (senior roles) rating in 216 o Mechanical engineers retained their no shortage rating from 215 into 216. Overall, survey results for occupations assessed at the Victorian state level have weakened since 215 and reflect employer comments reporting difficulties filling structural based civil engineering roles and senior electrical engineering roles. Electrical engineering employers frequently commented that junior positions were easily filled with large numbers of recent graduates readily available. Civil engineering professionals noted a significant volume of applicants whose most recent experience amounted to roles based in the Queensland and Western Australian mining and resources sectors. Employers reported that these applicants were mainly found to be unsuitable for most Victorian engineering vacancies due to unrealistic remuneration expectations and employer concerns regarding the likelihood of long term retention. Survey results The Department of Employment 216 Survey of Employers who have Recently Advertised (SERA) found that 67 per cent of Victorian engineering profession vacancies were filled from averages of 5.8 applicants and 1.9 suitable applicants per vacancy. Department of Employment Page 1
2 Regional employers attracted an average of 53.5 applicants per vacancy while metropolitan employers attracted an average of 49.7 applicants per vacancy. Regional areas also attracted a higher average number of suitable applicants per vacancy (2.5) than metropolitan areas (1.7). Despite this, vacancy fill rates remained similar with regional areas filling 69 per cent of available positions and metropolitan areas filling 66 per cent. Figure 1: Proportion of vacancies filled (%), average number of applicants and suitable applicants per vacancy (no.), Engineering Professions, Victoria, 27-8 to (%) 4 2 Proportion of vacancies filled - LHS Suitable applicants per vacancy - RHS Applicants per vacancy - RHS Source: Department of Employment, Survey of Employers who have Recently Advertised Note: Occupational coverage varies over time series (no.) Mechanical engineers and electrical engineers both recorded a slight increase in suitable applicant numbers compared to 215 results. Civil engineering professionals, however, experienced a decrease of average suitable applicants per vacancy, from 2. in 215 to 1.4 in 216. Despite the increase in suitable applicant numbers for both mechanical and electrical engineers, and an increase in the overall applicant numbers for mechanical engineers, fill rates across all the cluster occupations decreased. This was most apparent for electrical engineers which experienced an 11 per cent decline. Overall, vacancy fill rates fell into line with longer term trends despite applicant numbers remaining strong and suitable applicant numbers increasing marginally. For mechanical engineers, vacancy fill rates, as well as average applicant and suitable applicant numbers, are above the preceding 5 year averages. For both civil engineering professionals and electrical engineers, fill rates and average suitable applicant numbers are below the preceding 5 year averages whereas overall applicant numbers are above. Victorian survey findings Role settings The vacancies surveyed across the engineering profession cluster related to a variety of engineering roles including design; project management; reliability engineering; capital works management, and maintenance and servicing. These positions were distributed broadly across a range of industry sectors related to land development; municipal services; road and rail transport; utility services; engineering construction; manufacturing; fabrication; electricity services; railway signaling; building services, and engineering design and consultancy services. Department of Employment Page 2
3 Experience and qualifications The levels of experience commonly desired by employers ranged from two to three years for intermediate level roles, through to four years and upwards for senior level roles. All vacancies required a relevant bachelor degree level engineering qualification as a minimum. A limited number of civil engineering professionals seeking to fill senior roles requiring more than 5 years of experience required applicants to possess additional certification as a Certified Practicing Engineer (CPEng). Knowledge, skills and attributes A common requirement across all occupations was a comprehensive understanding of Victorian state regulatory standards and building codes. The technical skill sets required by employers were highly particularised to specific industry areas and, as a consequence, transferability across sectors was found to be limited. Accordingly, high levels of technical acumen gained through similar role functions within a related industry sector were considered to be essential. Significant focus was also placed on interpersonal and communication skills, and the ability to liaise with internal and external stakeholders in multi-disciplinary environments. Importance was also placed on design proficiency, computer literacy and the ability to problem-solve. Leadership skills and the ability to provide mentoring support were also identified as areas of focus for senior level roles. Other attributes such as motivation, time management and being a team player were also noted by employers. Unfilled vacancies Unfilled vacancies for civil engineering professionals and electrical engineers were in both metropolitan and regional locations, while unfilled mechanical engineer vacancies were solely in metropolitan areas. Unfilled electrical and mechanical engineering vacancies were typically senior roles requiring five to ten (or more) years experience with advanced technical skills, often across multi-disciplinary fields. For civil engineering professionals, positions within the structural engineer specialisation were the most difficult to fill. o The role requirements for unfilled mechanical engineering vacancies were noted as particularly o demanding due to the uncommon nature of the highly specialized skill-sets involved. In some cases, the extent of local knowledge and networks that applicants were required to have was also difficult to satisfy. Employers had low expectations of attracting such applicants during initial advertising rounds because applicants with these unique competencies or array of networks were considered to be scarce within the general labour market. Civil engineering professionals noted that it was common for structural engineering roles to remain unfilled despite multiple recruitment attempts. Numerous employers stated that they were unlikely to consider overseas applicants as suitable due to their unfamiliarity with local regulatory conditions as well as, in some cases, a perceived or demonstrated lack of spoken-english skills. Department of Employment Page 3
4 Reasons applicants were unsuitable Just over half of all electrical engineer applicants and one quarter of all mechanical engineer applicants were not qualified engineers. While some of these applicants may be highly experienced in relevant industry areas at the technician or trade level, all employers required a bachelor degree as the minimum qualification level for all vacancies surveyed. There was a significant decrease in the proportion of qualified applicants since last year, from 87 per cent in 215 to 71 per cent in 216. As a proportion of the 71 per cent of applicants who were qualified engineers, 95 per cent were found to be unsuitable. The most commonly identified reasons for unsuitability were a lack of experience at the desired duration or a lack of experience undertaking a similar function within a related industry sector, often both. For civil engineering professionals vacancies, employers noted a significant volume of applications received from engineers returning to Victoria from roles based in the Queensland and Western Australian mining and resources sectors. Employers identified unrealistic remuneration expectations and concerns regarding the likelihood of long term retention as common reasons for the unsuitability of these applicants. Several of these employers also identified a lack of interpersonal and communication skills as particular areas of focus in determining applicant suitability due to the strong employer requirement for stakeholder engagement capabilities For electrical as well as mechanical engineers, inadequate skills was the second most commonly cited reason for applicant unsuitability and was often due to specialist requirements within a niche sector. For all occupations, employers were also unlikely to consider overseas applicants as suitable due to a perceived or demonstrated lack of spoken-english skills as well as unfamiliarity with local regulatory conditions. Figure 2: Proportion of vacancies filled (%), average number of applicants and suitable applicants per vacancy (no.), Engineering Professions, Victoria, 216 Applicants per vacancy - RHS Suitable applicants per vacancy - RHS Proportion of vacancies filled - LHS % 56 (%) 7 69% 49 (no.) 6 59% Civil Engineering Professionals (exc. QS) Electrical Engineer Mechanical Engineer Source: Department of Employment, Survey of Employers who have Recently Advertised Note: Occupational coverage varies over time series. Department of Employment Page
5 Demand and supply Demand trends Demand for engineering professions in Victoria is largely driven by activity within the construction industry, manufacturing industry and the electricity services sector. 1 Australian Bureau of Statistics (ABS) data indicates that civil engineering related construction activity in Victoria remains subdued. Engineering construction activity declined in the December 215 quarter following limited growth across the preceding March, June and September 215 quarters. 2 ABS data for the December 215 quarter indicates that the ongoing contraction of the Victorian manufacturing sector witnessed over the past decade has recently eased. Capital expenditure in the sector (a broad indicator of industry activity levels) has increased for the past three consecutive quarters 3 following a period of particularly sharp decline coinciding with the peak of the Australian dollar in 211 and : o Despite the recent increase in capital expenditure, results remain well below longer term trends. Additionally, the recent surge in the Australian dollar in March will be likely to impact the sector if the rate of appreciation continues. Data from the Australian Bureau of Statistics (ABS) for the December 215 quarter indicates activity in the Victorian electricity services sector has been in decline since September 214, following a period of strong growth dating from September Supply trends In terms of the supply of new engineers, entry to the occupation is most commonly based on the completion of a bachelor degree. The most recent available figures for Victorian bachelor degree courses related to the engineering cluster of professions shows that there were 1244 course completions in 214, down from 135 completions in 213. This latest decrease is consistent with an overall declining trend seen over the past ten years, dropping from a peak of 1926 completions in On an occupational level: o Bachelor degree completions for the mechanical engineering and electrical engineering professions both decreased in 214, consistent with an overall trend of decline over the previous decade. o Although civil engineer bachelor degree completions showed a slight decrease in 214 (568 down from the 582 completions in 213), a longer term comparison shows course completion numbers have continued to trend upwards over the past ten years, rising from 333 completions in ABS, 211 Census, Persons, Place of Work; Occupation by Industry of Employment, Victoria 2 ABS, cat. no , Engineering Construction Activity, Australia, TABLE 17. Value of Work Yet To Be Done, by Sector, Victoria, Original, 12 month moving average 3 ABS, cat. no ,Private New Capital Expenditure and Expected Expenditure, Australia, TABLE 7B. Actual and Expected Capital Expenditure by Industry - Victoria: Current Prices, December Reserve Bank of Australia (RBA), Historical Statistics, Exchange Rates Monthly January 21 to March ABC, Australian dollar's rise could prompt RBA to step in, join global 'currency wars', 5 March ABS, cat. no , Engineering Construction Activity, Australia, TABLE 17. Value of Work Yet To Be Done, by Sector, Victoria, Original, February 216, 12 month moving average 7 Department of Education and Training, Higher Education Student Data Collection, 214, customised tables Department of Employment Page 5
6 Other indicators and issues Notwithstanding the recent easing of the Australian dollar (which was predicted to improve the manufacturing industry outlook) 8 there has been little indication of any flow-on effects resulting in increased industry activity. The Australian Industry Group (AIG) June 215 Australian Performance of Manufacturing Index (PMI) dropped by 8.1 points to 44.2 points, indicating that activity across the manufacturing industry has continued to remain subdued (an index score of 5 or above indicates industry expansion while industry contraction is indicated by a score below 5). 9 The Victorian manufacturing sector accounts for around 3 per cent of total employment within the industry nationally. 1 A number of large scale infrastructure projects announced in the recent Victorian state budget are likely to result in increased civil engineering construction activity in the near future. Major projects include the Melbourne Metro rail tunnel and Western Distributor roads projects Victorian Manufacturing Council, Annual Report 213, May Australian Industry Group, Australian Manufacturing Index, June ABS, Cat. no , Labour Force, Australia, Detailed; Table 5. Employed persons by State and Industry, May Victorian State Government, Victorian Budget 16/17 Overview Department of Employment Page 6
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