Hays Engineering - April 2007

Hotspots

New South Wales:

• Building services design: An increased Government focus on sustainability in construction has created demand for engineers with skills in designing sustainable projects. Design drafters with four to five years experience and mechanical design engineers with five to ten years experience are in demand, with high levels of work in Sydney and consultancies requiring engineers with local experience who can hit the ground running.
• Building services contractors: Service managers and service engineers to work for head contractors, with roles ranging from site specific to branch wide. Desirable candidates have experience working for head contractors overseeing mechanical, electrical, hydraulic and fire and security. The roles will also include design management and management of service engineers. In addition, in Sydney and the surrounding areas there are a number of $200 million and above commercial builds commencing shortly which are services intensive and thus require an additional M&E focus.
• Civil & structural design: Ongoing workloads are creating demand for drafters, engineers with between three and ten years experience and MX designers. Cyclical demand and the overall skills shortage is heating demand at the senior level for specialists in drainage and infrastructure design. The water shortage crisis and the desalination project have created demand for engineers specialising in the supply and treatment of water and wastewater.
• Rail: Specialist rail engineers for new works projects are in demand. Most of the clearways projects are shortly to commence the construction phase, shifting the recruitment focus towards construction engineers with technical skills in areas such as permanent way, signalling or overhead lines. These candidates are also in demand for design consultancies, which are kept busy by the continued release of new projects for tender from TIDC, Railcorp and ARTC.

Victoria:

• The genuine hotspots in the Melbourne engineering market continue to be in the infrastructure and land development sectors. Most recently, with the awarding of the M1 Highway upgrade, the demand for experienced road designers reached peak levels.
• Over the next few months there will be a continued requirement for civil land subdivisions and project delivery of infrastructure projects.
• Licensed surveyors with local knowledge are also in serious demand.

Queensland:

• Civil & structural: Civil designers with 12D experience and structural engineers with four to ten years bridges and high rise experience are in demand. Civil designers are a particular shortage area and employers need to look interstate to fill their requirements.
• Project managers with design experience in infrastructure.
• Building services: Mechanical, electrical and fire engineers are in demand, driven by a large growth in Brisbane's building sector and an infrastructure boom. A requirement for hydraulic staff is a new trend that we expect to become a hotspot in the future.

South Australia:

• Key opportunities exist for civil engineers and civil drafters with 12D experience. Many candidates concentrated on AutoCAD which has created a shortage of candidates with 12D skills and employers are often time poor and so are unwilling to train candidates in this package.
• Building services: electrical engineers are the hotspot, since candidates are selecting the automotive, electronics or programming industries over building services.

Western Australia:

Across all disciplines the strongest area of demand is for engineers with five to ten years' experience, with the following discipline-specific hotspots:

• Civil: 12D designers for land developments as urban sprawl continues and MX designers for roads projects such as the Perth to Bunbury Highway project, the Mitchell Freeway extension and several term network contracts.
• Water: Large government spending to upgrade wastewater treatment plants due to faster than expected expansions, and water purification and desalination projects to deal with water shortages, have together created demand for civil water engineers, mechanical and to a lesser extent electrical and process engineers.

The coming quarter

With the industry gaining intensity, the severe shortage of engineers has seen employers become willing to utilise temporary staff and while most employers prefer permanent, many are giving candidates the option of deciding between a permanent or temporary role with the company. Contract positions are particularly prominent on major civil projects.

For the same reason, working holiday makers are increasingly considered, which in many cases leads to sponsorship, while some employers are willing to employ entry-level staff and train them into the role required.

Executive recruitment

Executive vacancy activity has been strong and is expected to remain busy. In Western Australia civil, water and building services executive requirements are particularly high, with candidates required to have a strong technical foundation in addition to local contacts to bring in business and manage teams.

In NSW executive activity is expected to come from the client-side rather than from contractors. Clients seek firmer control of projects entering the construction phase while the recent tender for the $450 million Kingsgrove to Revesby alliance project will require an increase in senior project managers and contract managers on behalf of the client to oversee the contractors involved. Consultancies will continue to augment their teams at a senior level although the majority of contractors have their senior management teams in place from tender stage. Service managers are required and packages are rising above $150,000 and $200,000 to attract candidates. This demand is expected to continue for approximately the next six months. Senior engineers with client-facing skills and the ability to develop new areas of business in addition to running project teams and an existing workload are also required.

Queensland's project-orientated market has created strong civil and structural executive requirements. However building services demand is more centred around mid-level staff to drive workloads rather than at the executive level.

With such a tight market in Victoria, key senior staff are becoming a focus within the consulting market. Candidates who are able to bring an existing client base to a new role are a very attractive and sought after prospect. The executive hotspots include infrastructure and also environmental, as these areas are so competitive that key people can make a difference.

The water sector has very high requirements. With a number of consultancies looking to enter the water sector, senior candidates with a strong reputation within the authorities are highly desirable for vacancies with these employers.

Salaries

Senior salaries are expected to remain at current levels this quarter, although there may be some flexibility in the civil/structural and building services arena. Despite the candidate-short market, design consultancies are unwilling to pay above market rate for an engineer, or to allow salaries to be driven too far through poaching or counter-offers. However at the entry to mid levels, designer and drafter salary increases are expected due to the demand for these skills. The rail market should also see a continued salary increase as investment in this area grows.

In Western Australia salaries continue to increase, however employers draw back from candidates who compare salary offers to those of the mining sector, since they are unable to compete with that sector's salaries.

While Victorian rates remain steady, key senior staff who can win business are beginning to command higher salaries. Experienced designers with relevant software packages are beginning to see steady increases in salaries, particularly during times of high industry saturation.

Candidate trends

The supply of suitable candidates for roles continues to be a problem for the industry. The level of investment has risen substantially over the last three years and as a result demand for good candidates has also increased. Unfortunately, there has been a shortage of suitably skilled candidates progressing their career in the industry to cope with this surge and the majority of employers are forced to look overseas to supplement their workforce. Candidates with UK and Irish experience are particularly sought while much closer links have been developed between Australia and the Middle East, as more employers become involved in Middle Eastern projects and often resource this work from their Australian operations.

Long term, employers may look at improving their training and education programs to encourage the employment of local engineers but at this stage such plans are in the early stages of development and do not look likely to affect the influx of overseas engineers.

State-by-state the trends are as follows. A number of South Adelaide projects are heating demand and creating a major candidate short market, particularly for skill sets such as civil (water and infrastructure) and electrical engineers (building services). Very few Western Australian candidates are moving in the local market, with most new candidates coming from overseas and interstate. In Queensland a greater number of structural staff compared to civil staff are available in the market while fire specialists are a growing niche area. In Victoria there is the usual attraction for good consulting candidates to move to developers and contractors for larger salaries. This is a continual drain on local knowledge bases. There is still a large gap in the four to eight years experience level, and these candidates are being shored up by their employers with improved career potential and slight increase in salaries.

Finally, a greater number of candidates are registering as limited companies within the project management field, creating a shift in the mindset of employers regarding contract staff.