4 Solutions to Address Automotive Skill Shortages

by: Gem Siocon

I.    Automotive Industry Statistics

The Federal Chamber of Automotive Industries (FCAI) announced 96,000 new vehicles were purchased in May 2016 in Australia, a 3.6% increase from 2015. As of January 2016, there were 18.4 million registered vehicles in Australia.

With the huge spike in vehicle sales, vehicular maintenance and repair service will naturally also increase. Auto Skill Australia (ASA) reported many auto companies faced problems growing their business. The companies experienced high volumes of backlog and massive shortages in skilled labour.  The report indicated the following occupations received an increased recruitment demand with decreased manpower supply:

• motor mechanics;
• automotive electrician;
• diesel motor mechanic;
• motorcycle mechanic;
• small engine mechanic;
• panel beater;
• vehicle painter/spray painter;
• motor vehicle parts interpreter; and
• motor vehicle salespersons.

II.    Key Staffing Issues in the Automotive Industry

Some key business issues identified in the automotive industry: 

1.    Advances in Technology

The technology advancement introduced computer functionality and hybrid mechanical and electrical motor vehicles. Companies reported a gap in the number and quality of skilled auto repair workers.

2.    Skilled Labour Shifting to Other Industries

Most automotive occupations shifted to mining, resources and construction industries because of higher wages. The trend affected the industry, particularly Western Australia, Queensland, Northern Territory and South Australia. This is increasingly becoming an issue in NSW with the most recent construction boom.

3.    Decreasing Demand for Apprentices

Supply through local apprenticeship and traineeship training is low, adding around 6000 to 6800 per annum, as per Labour Market Apprentices- Automotive Trade 2016 research by Department of Employment.

Their 2014-2015 study showed that almost half of apprentice automotive vacancies were unfilled while 76 percent of employers reported 'difficulty' in sourcing apprentices due to low wages and unpleasant perception of the automotive work. 

Surveyed employers perceived difficulties in attracting and retaining young people to apprenticeships in the automotive trade reflect low wages and poor perceptions of the work. Moreover, media articles have noted a link between the demise of the local automotive manufacturing industry and perceptions that job opportunities in the automotive trades will decrease, which may discourage potential apprentices.

4.    Employer-Employee Mismatch

As per Department of Employment, automotive employers attracted fewer suitable applicants in 2016 than 2015 and a

lower proportion of vacancies were filled.  More than one-third of employers surveyed did not attract any suitable

applicants for their vacancies. The reasons cited were:

• Around   98% of vacancies required trade qualification and around 50% of the applicants did not have this criterion
• Approximately two-thirds of trade qualified candidates had insufficient experience, limited technical skills, unstable job history, poor communication skills, poor attitude or untidy presentation
• Other factors cited were the applicants living too far away from the job location, disagreement with the wages imposed by the employer and unavailability to work overtime or during weekends.

Given the restraints from the local workforce, there is an increasing focus on sourcing international candidates again.

III.    Solutions for Skilled Automotive Shortages

Motor Trades Association (MTA),  the Automotive Chambers of Commerce and other industry stakeholders recommended action plans to mitigate the shortages in the automotive industry:

1. Retention of automotive occupations in SOL (Skilled Occupation List)

The Skilled Occupation List (SOL) supports the Australian's General Skilled Migration policy. The goal is to attract high-skilled migrants to meet the country's medium to long term needs. SOL's annual review assesses labour market prospects for skilled migrants. This includes domestic training and labour market outcomes.

The Temporary Work Skilled visa (subclass 457) permits skilled individuals to work in Australia. The sponsorship must come from an approved business with the visa valid for up to four years.

Below are updates from 2016-2017 SOL automotive occupations:

-          The following occupations were retained: panel beater, motor mechanic, diesel motor mechanic, motorcycle mechanic, small engine mechanic and automotive electrician.

-          However, the following occupations were not included: vehicle painter, motor vehicle parts interpreter and motor vehicle salesperson. Implementing skilled migration can resolve shortages on these occupations.

Under Subclass 457 program, the following measures address the skill shortage in the automotive industry:

• reestablishment of the Ministerial Advisory Council on Skilled Migration (MACSM)
• streamlining of the application process for business with good 457 visa sponsorship history
• training benchmark updates

In the same program, the following recommendations aim to resolve shortages in automotive occupations

• Inclusion of vehicle painter, motor vehicle parts interpreter, motor vehicle salesperson and motor vehicle body builder in future SOL reviews
• Subclass 457 Program remains strong in meeting skill shortages with businesses that have a hard time recruiting local skilled labour

2. Allow skilled automotive workers to sponsor their own migration to reduce costs. 

Self-migration lessens the business owners' risk if the migrant worker has attitude and performance issues. If skilled migrant fails work standards, there is less risk and cost outlay from the employer.

3. Streamline Visa 457 Application and Approval Process for Automotive Occupations 

The Business Council of Australia called for streamlining of visa approval process turnaround period. Consideration should be given to sponsors with a good record in hiring local employees. The organisation demands industry consultation and Regulation Impact Statement for any Visa 457 changes.

4. Increased focus on apprenticeships and traineeships at school level

In the Automotive Environmental Scan 2015 report by Auto Skills Australia (ASA), many small to medium-sized businesses were hesitant to employ apprentices because of economic uncertainty and the corresponding decline in vehicle purchase and maintenance spending.   Other factors like the expansion of training providers and competition for students have affected the ability of many regional training offices (RTOs) to provide services at par with business standards.

Some recommendations made:

1. Enhance the apprentice' learning environment by improving training delivery with better resources and qualified up-to-date teachers.  Improving the teaching standards contributes to better student engagement in the classroom.

2. Appropriate ratios of apprentices with skilled tradespeople on the workshop floor to guarantee training and supervision of apprentices

3. Support for businesses to employ apprentices by providing employer subsidies or tax breaks that specifically pertains to training and retention of apprentices

As skilled migration and recruitment specialists, Konnecting has years of experience and expertise in recruiting skilled motor professionals for automotive businesses across Australia. If you wish to pursue an automotive career in Australia, check our latest job vacancies or submit your resume. You can also register your vacancy or contact us to assist you in sourcing skilled professionals for your auto business.