Developing in-house talent, creating supportive workplace cultures and investing in the wellbeing of staff are some of the ways Australian Industry Group members are navigating skill and workforce shortages.
At a webinar last week, Caroline Smith, Executive Director of Australian Industry Group’s Centre for Education and Training, explored the issue with panellists:
“Skills and workforce shortages are directly impacting productivity, innovation and competitiveness, so we're seeing reduced output, increased costs and delays in adopting new technologies,” Mr Asmar said.
“We see the solution as a multi-pronged targeted approach: training and apprenticeship programs, stronger STEM and education initiatives, strategic investments in automation, partnering with educational institutions, streamlining immigration policies and fostering collaboration between industry and government.”
“One aspect that contributes to the labour shortage in manufacturing is that people don't understand the industry and don't explore the rich and diverse careers available,” Mr Asmar, of global snacking company Mondelez international, said.
“There’s a belief that working in manufacturing is low-skilled manual labour, when the reality is quite the opposite, especially in FMCG (Fast-Moving Consumer Goods).
“The industry has modernised and continues to modernise such that now we operate within highly automated and technical environments.
“This modernisation offers fulfilling careers across many disciplines, and this will evolve even more over the next decade.
“We have countless examples of individuals who started on the factory floor and are now plant directors.”
With brands such as Cadbury and Oreo, Mondelez international — which supports about 2000 jobs in Australia directly and about 4000 indirectly — is largely unaffected by labour shortages.
“The majority of our sites don't have a lot of turnover with our permanent team,” Mr Asmar said.
“Our brands are well loved and naturally attract talent.
“We also have EBAs that offer attractive terms and conditions, so we don't feel a shortage of labour, even though it's out there.
“However, we do encounter skill shortages when managing the impacts of peak seasons; redeploying permanent staff requires flexibility and adaptability.
“As we grow and invest in new equipment and technologies, we need people with different and more advanced competencies and the continuous multi-skilling journey of our existing workforce to enable greater flexibility in our operations.”
Brisbane-based family-owned business The Drake Group manufactures new, heavy-haulage trailers, offers after-sales service and has an engineering workshop.
“We have more than 400 staff across our four sites in Brisbane and WA and heavily rely on skilled trades, such as mechanical fitters, boilermakers, spray painters and manual machinists,” Ms Smith said.
“However, we’ve experienced significant challenges regarding skill shortages over the past five years across all our trades.
“We’ve had to implement multi-prong strategies to address this: a short-term solution to provide immediate relief but also working on a longer-term plan to build a sustainable workforce.
“Without proactive measures, those shortages could have really slowed our growth and impacted our manufacturing capabilities.”
In the short term, Drake sponsored a number of boilermakers over a two-year period.
“It wasn't a sustainable solution, owing to the length of time and overall cost to the business of bringing in sponsored workers,” Ms Smith said.
“So, as a Brisbane-based business committed to sourcing locally, whether it's from parts through to labour from our local community, we wanted to grow our own talent.
“We started by upskilling our trade assistants, many of whom demonstrated a mechanical aptitude and had the ability to do the work but might not have been able to complete a trade.
“We’ve also had success in securing interest from others, such as stores people who love tinkering with their cars on the weekend but had never sought an opportunity outside their immediate first-career choice.
“Our real success, though, has come from growing our own trade program.
“Last year, we brought our apprentice program in-house, which has allowed us to expand the program substantially.
“Ten per cent of our workforce is now made up of apprentices; we have more than 40 apprentices across all years, which we're very proud of.
“We work closely with local schools to spark students’ interest, specifically in the mechanical fitting trade, which still has quite a large shortage.
“Building solid relationships with these schools is key to promoting trades as a viable option to university.
“Given the specialised nature of our product range and the ongoing view that mechanical fitters will continue to be in short supply, developing our apprentice program will help us continue to grow our skilled workforce and ensure we're providing meaningful opportunities for youth in the community.”
Mondelez also has an apprentice program and promotes internal development of talent to navigate challenges in its technical maintenance stream.
“We've managed to attract people from our operating workforce — operators who have transitioned into apprentices in the maintenance area,” Mr Asmar said.
“Keeping it in-house and giving people those opportunities mean we have a large workforce to draw from.”
Mr Asmar is also developing a learning academy to improve the quality of training and the technical skills on the production line at Mondelez.
“We're lucky to be able to retain our critical workforce, so, for us, it's about developing skills so staff can be redeployed, when necessary,” he said.
“We have bespoke and unique skills such as those in wrapping or chocolate making or in the kitchen.
“Those skills can be quite time consuming to understand and develop. That's the biggest challenge for us.”
Not-for-profit Lojic delivers NDIS support services across Australia and provides research and learning delivery and consultancy services.
“We also face significant challenges in the recruitment and retention of our frontline workforce,” Ms Scott said.
“Persistent shortages have real operational impacts: Over the past five years, our existing team has been stretched, and we’ve been forced to rethink how we structure our team and deliver our services.
“In the short term, we've responded by broadening our recruitment strategies and deploying individual flexibility agreements which enable us to provide our team with more flexible work environments and above-award pay.
“We also invest heavily in the development and training of our workforce.
“Our training involves a mix of online learning, on-the-job training, professional development and classroom-based learning, which we provide directly to our staff as part of their induction and ongoing.
“These approaches help shape a more resilient and responsive workforce.”
Lojic identified several years ago that the wellbeing and resilience of staff were critical to employees’ success at work.
“We’ve designed an employee wellbeing program where staff work directly with their line manager to develop and review their wellbeing plan twice a year,” Ms Scott said.
“They set goals about what self-care looks like for them over the upcoming period and identify things they would like Lojic to invest in, up to the value of $150 per six-month period.
“That may sound like a drop in the ocean — until you start looking at some of the results.”
A whopping 98% of staff said completing wellness plans made a positive difference to not only their work life, but to their home life, as well.
“We've had people purchase wetsuits to go surfing and new bedding, so they're better rested when they come to work,” Ms Scott said.
People have attended archery lessons and bought gym memberships. They've used their wellbeing allowance for holidays and Bunnings vouchers to start a veggie patch or for camping equipment.
“My personal favourite is the person who bought a metal detecting kit to explore their hobby of prospecting,” Ms Scott said.
“Not only is our wellbeing program helping with retention and contributing to our ability to market ourselves as an employer of choice in a tight employment market — from a workplace health and safety perspective, it’s facilitating day-to-day conversations about the potential risk of psychological injury.”
The Drake Group also prioritises employee wellbeing.
“Our key priorities have been to reduce staff turnover and enhance employee engagement,” Ms Smith said.
“To support that, we’ve rolled out a multi-tiered EAP (Employee Assistance Program) with an emphasis on wellbeing to ensure our team feels valued, supported and motivated.
“These include things like gym memberships and meat discounts from the nearby (and fellow Australian Industry Group member) Hans factory.
“We’ve also made strategic changes to working conditions to improve the retention and attraction of new talent.
“We’ve looked at wages and introduced a four-day working week which has enabled overtime to occur on a Friday. It means staff still have a two-and-a-half-day weekend, which has even attracted ex-employees back.
“Our in-house apprenticeship program has been the cornerstone of looking at our long-term workforce strategy.
“By bringing that program in-house, we created a highly supportive environment that goes beyond looking at trade skills.
“We focus on developing well-rounded individuals by incorporating life skills and career development into the program.
“Recently, we had CommBank come out and provide financial wellbeing advice.
“We've explored leadership skills as part of preparing staff for life after their apprenticeships.
“It all helps to foster a deeper connection to the organisation and a clearer pathway for longer-term growth.
“Last year, we had apprentices who won TAFE and HVIA (Heavy Vehicle Industry Australia) awards, which demonstrate the strength of the program and the commitment from our team and apprentice coordinator, who's doing a great job.
“Our advice for organisations facing similar challenges is to invest in your people — not just in terms of wages but in building a positive workplace culture and supporting development.”
“While our in-house apprentice program is critical to our long-term strategy of building a sustainable workforce, it relies heavily on the ability to gain experienced tradespeople to train and mentor the apprentices,” Ms Smith said.
“Unfortunately, securing qualified mechanical fitters for our service arm has proven to be difficult.
“The shortage has created a bottleneck in our service operations.
“Mechanical fitters are essential for maintaining and repairing our specialised heavy haulage trailers, and without that sufficient staff ratio, turnaround times have increased, which impacts customer satisfaction and operational efficiency.
“The challenges are compounded by the fact that a lot of experienced tradespeople are choosing to work independently.
“They run their own contracts rather than seeking permanent employment, so we're competing with that in the market, as well.
“The trend has made it increasingly difficult to attract and retain talent.
“Managing the cost of recruitment, reducing the reliance on labour hire to fill the gaps we have and trying to extract knowledge from our ageing workforce are all key challenges for us over the next decade.”
Mondelez International can relate.
“We emphasise on-the-job training following the 70-20-10 rule, which often requires additional headcount when shadowing workers for periods of weeks or months.
“That has a burden on our input costs, already impacted by significant cocoa price pressures.
“There’s productivity loss when you’ve got a skilled operator off their normal line.
“That said, there are some impressive new digital and technology solutions that enable operators to learn troubleshooting in a controlled environment.
“This improves efficiency and productivity as the training experience can be tailored to learning styles.
“So, on a longer-term basis, we’re focusing on how we can improve the training regime.”
“As a nation, we're not helping productivity in the trade and manufacturing sector,” Ms Smith said.
“This is leaving us — as an industry — on our own when really, we need government support and initiatives.
“The shortage of our skilled trades, particularly mechanical fitters, is limiting the scale of our service operations, reducing overall productivity and placing additional pressures on our existing workforce.
“Addressing this issue is critical.”
The education and training system can also take more meaningful steps to help address these skills and workforce shortages, Ms Smith said.
“From attending careers expos and engaging with students, it's clear trades are often underrepresented,” she said.
“The focus tends to be on university pathways, and many students are unaware trades can offer competitive salaries and long-term career stability.
“More targeted efforts to raise awareness among teachers, career advisors and, in turn, students about the value and viability of trade careers would be highly beneficial.
“Secondly, we see significant challenges within the TAFE system, which impact the effectiveness of apprenticeship training.
“A major issue is the lack of logical and timely progression of subjects. Apprentices are often enrolled in units either too far advanced for their current skill level or too basic for their skill development.
“That misalignment can lead to confusion, overconfidence or disengagement.
“Not only does it impact their learning outcomes, it also impacts our ability to integrate their skills effectively in the workplace.
“TAFE seems to have a lack of educators to keep up with the demands of industry.
“We recommend governments and training providers work more closely with industry to ensure course structures and delivery schedules align with the real-world requirements of the job.
“Improving the coordination and flexibility of training would also help to ensure apprentices learn the right skills at the right time.
“There is too much reliance on industry to bridge these gaps.
“So, promotion of trades in schools, better education for educators and more responsive and industry-aligned training would all help to significantly improve workforce outcomes — not just for our organisation but across all manufacturing industries.”
Mr Asmar agrees.
He called for improvements to the AQF (Australian Qualifications Framework), which he described as challenging to navigate.
RTOs also need to deliver more meaningful training, he added.
“Training needs to directly cater to competencies required in a modern, highly automated manufacturing environment.
“We need more technical knowledge to keep abreast of not just modern 3.0 technologies but emerging 4.0 technologies.”
Ms Scott added: “I can only reinforce the benefit of a strong TAFE and RTO training system, with timely reviews of the AQF and the relevant qualifications for our sector to ensure we keep up with what the market expects of a trained support worker.”
“Trades like mechanical fitting, boilermaking and spray painting are in high demand,” Ms Smith said.
“They offer excellent earning potential, job security and clear pathways for progression.
“I often say to students: ‘If you look across our executive management team, a fair portion of them started in trades and engineering’.
“It's a powerful reminder that you don't need to start out with a university degree to build a rewarding career.
“In fact, trades are where the money is at the moment and where the real opportunities lie.”
REGISTER for our next webinar on July 30 about our report Apprenticeships and traineeships: The employer perspective.
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Wendy Larter is Communications Manager at Australian Industry Group.
A former journalist for newspapers and magazines including The Courier-Mail in Brisbane and Metro, the News of the World, The Times and Elle in the UK, she is passionate about giving businesses a voice.
