ByAdam Zarth -- Executive Director, Business Illawarra
Yesterday our state border with Victoria creaked open, taking us another step towards normality. This follows a joyous emergence from lockdown for many of us over past weeks, which itself underscores the complete disruption to our lives and our communities over the preceding 20 months.
This disruption has caused huge and lasting impacts on our society, and businesses in the Illawarra are now grappling with a nagging workforce problem: we simply do not have adequate numbers of people, or people with the required skills, to keep operating at full capacity.
Over 40 percent of Illawarra businesses reported experiencing skills shortages in our September business conditions survey, which was close to the state average. However the problem is even worse in the Southern Highlands and Shoalhaven with over 50 percent of businesses reportedly experiencing the problem.
Now that businesses have snapped back to more normal operations those numbers are set to worsen.
A traditional challenge for the Illawarra has been a large number of residents that live in the area but travel to parts of Greater Sydney and in some cases interstate, for higher paid jobs or to work in sectors with little or no local presence.
The pandemic forced many of these people to work remotely from home and despite initial fears and trepidations, this revolution has been successful for both employers and employees alike to the point that hybrid work will stay with us in the future.
In 2020, Business Illawarra commissioned a report on the “Decentralisation of work and the Illawarra” which highlighted that of the 85 percent of the 25,000 people who typically commute out of the area to work want to continue with remote work; albeit for around two or three days per week only.
While a huge positive for many of us, this newfound flexibility will worsen the labour and skills shortages we have in the Illawarra in both the shorter and longer term, as there are even more jobs available to our limited population once you count remote and hybrid working.
Our limited population is a national problem exacerbated by the pandemic, with international border closures strangling our labour market. In the year to March 2021, Australia’s population naturally increased by 131,000 (293,500 births and 162,500 deaths), but our net overseas migration represented a loss of 95,300 (115,000 overseas migration arrivals and 210,300 departures). This means our national population increased by just 35,700 in that time, less than a tenth of the increase in the same period in the previous year.
Ordinarily we would have some 8,000 international students living in and around Wollongong, many of whom fill vital positions in our local workforce. Getting them, and skilled migrants, back into the Illawarra is equally important and with international borders now re-opening that should start to happen soon.
To ease some short-term workforce pressures Business Illawarra has been advocating for programs to attract, train and employ new and returning workforce participants into industries with high demands right now – retail, hospitality, transport and warehousing for example.
For four years we have delivered ‘Illawarra YES’, with funding from the NSW Government, to create traineeship and employment opportunities with our members for local young people.
Much-needed improvements to career-advice are on the way too, with the NSW government announcing this week the establishment of Careers NSW; a free service that will provide high quality, personalised career advice and resources in 2022 after a trial is undertaken in late 2021.
Meanwhile, important work is occurring locally to ensure that the Illawarra reaches its full economic potential, and ideally can support high-value jobs for every local of working age.
Instead of being a location that hosts commuters, remote workers and retirees, Invest Wollongong and other local stakeholders are working to bring businesses or satellite offices at least to our CBDs and commercial areas.
Many of us are working to develop opportunities for the Illawarra arising from the global, national and state focus on decarbonisation; ‘going green’ in other words.
Now that Australia is committed to net zero emissions by 2050 and the Prime Mister is back from COP 26 in Glasgow, investors from both the public and private sectors have greater certainty required to implement a variety of strategies and plans for a greener future.
Momentum has been building for years, if not decades, towards our region being a “hub” for green energy, green fuels and ‘green steel’ with hydrogen being the fuel that powers our economy and communities over coming decades.
In the near term, our region is benefiting from significant investments from some of our home-grown institutions, with BlueScope to spend around $800 million to reline its No. 6 Blast Furnace, creating 250 local jobs, and the University of Wollongong to invest $250 million at is planned Health and Wellbeing Campus in Fairy Meadow which will itself create hundreds more jobs.
The job pipeline for locals continues to grow as we emerge from the pandemic, on the back of record investments in our region, a regional focus on investment attraction and more flexible working arrangements for many of us. The challenge for us now is how to address our growing shortfall of working-aged people, and increasingly, how to affordably house them.