Onshore skilled migrant engineers: skills wastage and atrophy.

• Author: Cameron, Roslyn
• Position: Contributed Article - Report

Abstract

This article reports the survey findings from a research project exploring the use of skilled migration as a strategy for assisting in overcoming the pressing risks facing the Australian rail industry in workforce development. These risks are associated with an ageing workforce and skill shortages in engineering and technical areas. The data presented originate from a survey of skilled migrants in an employment program for skilled migrants in the Sydney metropolitan area and skilled migrant engineers in Victoria. The findings point to the potential, and yet untapped source of highly qualified professionals who could be targeted for recruitment by the rail industry Of greater significance are the broader implications of the research in terms of engineering skills wastage and atrophy in a time when Australia cannot produce enough engineering professionals domestically to meet the demand. This is all set against a backdrop of global engineering shortages and fierce domestic competition for engineering skills made even more prominent with the second wave of the resources boom.

1. Introduction

   The Australian rail industry, like many other related industries is experiencing skill shortages in mission-critical skill sets related to engineering and technical skills. These skills shortages a re not only national but global and this situation is compounded by the fact that the profession is ageing. Engineers Australia (EA) estimates 70,000 retirements in the profession now and into the next five years (Engineers Australia 2009). Australia has not been able to meet the demand for engineers domestically through Australian universities for some time, and has long relied on skilled migration to meet the demand for engineers. Yet, the rates of unemployment for overseas-born engineers are higher than that of Australian-born engineers:

   Reliance on engineers born and trained overseas is not a recent phenomenon and has been a feature of the Australian labour market for many years. The unemployment rate for overseas born people (4.3 per cent)in the engineering labour force was higher than for Australian born people (1.8 per cent). The labour market experience of overseas-born engineers is related to how long they have been in Australia (Kaspura 2011, p.6).

   The aim of this article is to explore the pool of available migrant engineering talent that is already onshore due to independent general skilled-migration entry to Australia. The article reports findings from two surveys conducted on samples of onshore highly skilled migrants. The surveys explored a set of demographics, employment, and workforce-participation issues along with attractors and career impacts since respondents migrated to Australia. The findings in the study point to a significant disconnect between the rhetoric of skilled-migration policy and the reality for many independent skilled migrants, once they enter Australia. Independent skilled migrants can only apply to migrate to Australia if their occupation is on the Skilled Occupations List (SOL) and they pass a points test. The majority of the survey respondents reported in this study entered Australia as permanent residents which indicates that they were independent skilled migrants under the points-based General Skilled Migration program. According to the Department of Immigration and Citizenship 36,167 skilled independent migrants were processed in 2010-11 and in 2011-12 this increased to 37,772 (DIAC 2012, p. 10). Independent skilled migrants who are points-tested and apply from outside Australia have an unemployment rate of 6.3 percent and this rate tends to be greater than the Australian average (DIAC 2011, p. 5). The findings of the research highlight a paradoxical situation where, on the one hand, we are suffering from engineering skill shortages nationally, and yet there are highly skilled migrant engineers suffering from skills wastage and atrophy, as indicated by the unemployment rates in the profession and the number of overseas-born engineers not working in engineering occupations (Kaspura 2011).

   In pure human capital terms, this is not economically rational and has profound implications for future independent highly skilled migrants wanting to come to Australia. As noted by the OECD (2012, p. 22), 'the skills of migrants are not being tapped to their full potential ... even though competition between destination countries to attract and retain talent is gathering pace'. The OECD (2012, p. 14) suggests that destination countries need to invest in language training in order to facilitate mobility and skills transfer, as well as pre-departure training to familiarise immigrants with labour market requirements. The work of bodies such as Adult Migrant English Service (AMES) and EA who a re conducting different programs and implementing different strategies to assist onshore migrant engineers to enter the profession in Australia is testament to a suite of strategies which could be employed to assist these skilled migrants to overcome professional employment barriers. In terms of the rail industry, the Australian National Engineering Taskforce (AN ET) report on engineering skills capacity in roads and rail concluded:

   The causes of the acute skills shortage and the impediments to resolving the capacity crisis are largely structural, and beyond the control of individual organisations: they are rooted in the nature and patterns of demand set by governments, the complex market structure, and rail safety legislation which apportions risk. (Wise et al. 2011, p. 102).

   The theoretical base of this article is drawn from human capital theory. Human capital in the human resource literature is seen as a critical source of competitive advantage. The OECD (2001, p. 18) defines human capital as 'the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being'. The accumulation of human capital is acquired knowledge and skills through education and training, and the measurement of human capital is an important source of evidence for developing and implementing policies regarding human resources. Human capital theory can be applied to individual, organisational, and national levels of analysis. The national measurement of skill shortages and resulting policies on skilled migration are a prime example of how human capital theory can be applied and implemented at a national level.

   An example of how this is used for analysing competitive advantage in the field of strategic human resource management (H RM) is the work of Lepak and Snell (1999). They drew upon three theoretical bases (transaction cost economics, human capital theory, and the resource-based view)to develop what they term as the human resource architecture. Key to this architecture is the strategic value of human capital and the uniqueness of human capital. The strategic value of human capital is 'inherently dependent upon its potential to contribute to the competitive advantage or core competence of the firm' (Lepak and Snell 1999, p. 35). The uniqueness of human capital 'refers to the degree to which it is rare, specialised and in the extreme, firm specific (Lepak and Snell 2002, p. 519). Both increase the competitive advantage of the firm. Independent skilled migrants are able to come to Australia based on the demand for certain human capital (skilled occupations and professionals). Australia, as a traditional migration nation is also in competition with other migration nations for scarce and in-demand human capital. It is in the nation's interest to ensure it develops and enacts skilled-migration policy and programs that sustain an advantage in attracting and retaining skilled migrants. Skills wastage and atrophy of onshore skilled migrants is a symptom of problems in the operationalisation of skilled-migration policy; however, it is also strongly influenced by contextual forces.

   This article discusses engineering skill shortages before exploring the policy terrain around skilled migration and the shift to a demand-driven system where the onus is now on employers to deal with skill shortages through temporary skilled migration (457 visas) and regional, state, and territory-sponsored or employer-sponsored migration programs. The article then explores the impacts of engineering skill shortages on the Australian rail industry and the issues of skills wastage and atrophy, before presenting the results from the two surveys. The article presents the findings and its broader implications before concluding with recommendations and areas for future research.

2. Engineering Skill Shortages

   Shortages in key skill areas are greatly affecting many industries' ability to meet current and future workforce demands. Despite the labour market effects of the recent global financial crisis and a slowing in the growth pace of the latest resources boom, certain engineering, project management, and technical and trade skill shortages remain critical for the rail industry and the Australian economy in general. Causes of skill shortages are multiple and operate across a variety of spheres (economic climate; industry growth; ageing workforce; education and training system factors; industry structure, image, and culture). The demand and supply of skilled labour further complicates the issues. The domestic education and training system is not producing the number of engineering and technical skilled employees to meet the current demands of an Australian economy buoyed by large infrastructure projects and a renewed resources boom (APESMA 2010). The latter further compounds the issues for the Australian rail industry, which is the focus of this research.

   Major engineering professional bodies (EA and the Association of Professional Engineers, Scientific, and Managers Australia) have long been aware of the acute engineering skill shortages and the impact of increased economic...