How Is The Construction Industry Managing Staff, Skill And Supply Shortages In Australia: Expectations vs. Reality

While the construction sector — in Australia and the rest of the world — has largely recovered from the debilitating effects of the COVID-19 pandemic, it faces another looming issue: shortages not only in the supply chain but also in terms of workers. How is Australia's construction industry dealing with these shortages — and perhaps, more importantly, how should Australia be handling what insiders are calling "the challenge of the decade"?

What Is Causing Supply and Skill Shortages?

Although problems in the Australian supply chain had started before the pandemic, COVID-19 served to highlight existing vulnerabilities and contribute to new ones. In addition to a continuing global demand for goods and rising costs/inflation, the pandemic saw mass infection of personnel, lockdowns and border closures, and a sharp drop in shipping and transport services. Parts and building materials weren't being made and weren't being moved. Supply chain issues are expected to continue well into 2023.

To stave off economic collapse, governments offered stimulus grants. In Australia, this cash injection has increased construction activity. With large infrastructure projects and billion-dollar commercial projects moving ahead, the projected supply of labour will fall further and further behind what is forecasted to be an unprecedented level of demand. An ageing workforce, lack of diversity, urban concentration of projects, and onerous procurement and regulatory requirements are a few major factors.

How Should the Construction Industry in Australia Approach Supply and Skill Shortages?

Mitigating the building supply shortage will likely require the different players in the sector to plan further in advance, communicate better, and work together. Pre-ordering supplies and factoring in extra time for potential delays, encouraging local sourcing, and possibly having developers and contractors share the risk and assign a price for that delay are a few options. In times of material shortage, the sector should band together to ride the wave out rather than focus solely on individual business growth at the expense of other parties.

In terms of construction labour shortages, a multi-prong approach may be a practical option.

Efforts must be made to "grow" the workforce. To that end, the industry must look at issues — educational, cultural, even geographical — that are preventing its ability to do so rapidly. Promoting the migration of talent can go a long way but will not be enough on its own to meet the labour demand, especially in light of the limitations of current visa programs.

Companies should offer more lucrative employment opportunities to attract new talent. Although it may be a high short-term expenditure, this practice may prevent future shortages of competent workers not only in individual businesses but also in the industry in general. The construction sector should also invest in trades and skill training to build up labour pools not only for occupations experiencing the largest shortages but also for those expected to become in high demand in the future — surveying and geospatial personnel, for example. The industry must not only attract new entrants and foster apprenticeships but also turn its eye towards diversity and really pay attention to how skills will need to expand down the road (and what technological advancements should be incorporated into training and certification programs).

Can the Industry Embrace Transformative Change?

Whether it's a shift in attitude about how different areas of the construction sector can work together to build a more resilient, sustainable supply chain or investing in where the industry is going (rather than what has been traditionally needed) in terms of demand for skills, it needs to recognise, embrace, and look ahead to how it will be evolving. The alternative is trying to play a game of catch-up it likely won't win.