The civil construction market in Victoria is booming, driving capital investment as well as employment growth in a sector that is already contributing massively to the state’s economy. Not to mention, it is expected that over $100 billion worth of state capital projects will either be live or completed over the next decade on the east coast of Australia (close to $40 billion is for Victoria). With this increase in investment for transport infrastructure and a series of megaprojects kicking into gear, we’ve seen greater demand for civil construction talent along with salary increases of up to 15%. What costs will this have, particularly for employers, vying to attract the best people?

The Emergence of Infrastructure Mega Projects

Prior to the influx of infrastructure megaprojects in Victoria, the last spike we witnessed was in the building industry, particularly high-rise developments. The impact on the accessibility to white-collar professionals was widespread (particularly when it came to Site Managers and Project Managers), however, the shortages were managed via two streams:

1. Education (building-related degrees): By utilising technical graduate programmes, candidates were moved into project coordination followed by contract administration and finally into project manager roles.
2. Skilled tradesmen: Carpenters, bricklayers, plasterers and the like were given greater responsibility on site (such as Supervisor and Foreman roles). At the same time, established supervisors/foremen were promoted into Site Manager/Project Manager roles.

This cycle continued for ten years until the residential sector began to feel the pinch of apartment oversupply (coupled with tighter lending criteria from the banks).

The Civil Construction industry, however, is another story. The rollout of infrastructure projects such as the $11 billion Melbourne Metro Tunnel, the $8.3 billion Level Crossing Removal as well as the West Gate Tunnel project valued at over $6.7 billion, are only some of the major pieces of work. The Suburban Roads Upgrade is also underway, with the Outer Suburban Arterial Roads (OSARs) project already kicking off in the western suburbs. With skills already stretched, and strong population growth also driving growth in civil works across schools, factories and hospitals, demand for Tier 1 & 2 Civil Construction professionals is only going one way.

The Challenges of Skill Shortages

Civil Construction Project Managers have always come from an engineering background, with it usually taking 12-15 years (including study) to position themselves at that level. Whilst some individuals may get there quicker, depending on the tier and company size, this timeline would be the norm. The problem here, is that when a talent void is identified, it simply takes too long to address it. We can entice more people to complete Civil Engineering degrees, but they’re still going to be more than a decade away from being ready – which doesn’t help the state’s impending works.

The other challenge is attracting quality talent into these mega projects, where there is often a perception of massive workloads, onsite problems and even the risk of being pigeonholed in a particular role for the length of the project.

This obviously creates opportunities for talent to be promoted faster, and while some will thrive and step up to the plate, there is a risk of placing candidates in roles that are beyond their means. Tier 1 companies in particular will have safeguards in place, but as we saw in high-rise building market, major defects take significant time, money and effort to correct.

What Can Be Done to Address Shortages?

Organisations have already started hiring from smaller civil contractors (from lower tiers), and we’re likely to see this continue, although this will certainly impact supply and demand, pushing up salaries as a result. But what else can be done?

Skills from other sectors such as Project Engineers (within mining/building/power) could play their part. On first glance, they may not seem right for Project Management, but their transferable skills definitely makes them an option to consider, especially as they come from sectors that already utilise civil/electrical/structural engineers.

Another prospective solution could mean exploring the prospect of hiring civil engineers and project managers from international sources. Recent changes have seen the introduction of the Temporary Skills Shortage (TSS) visas, resulting in both short-term (two years) and medium-term (four years) options. Although, from what I’ve seen, there isn’t much evidence that civil contractors are embracing it as a long-term remedy for the skill deficit.

Retention

As well as looking afield, concentrating efforts to retain existing staff also plays a key part and a lot of the companies we work with have been doing very well here through:

• The implementation of people and culture programmes – many have gone on the front foot on initiatives related to events, time off, community days, and workplace flexibility or similar. While it may not work for everyone, businesses have had to be courageous to start trialling these steps.
• Communication and feedback – it’s also about having regular conversations with employees right from the outset to ensure they are achieving and progressing as expected, as well as providing greater career transparency and opportunity.
• Salary and rates – wage adjustments may also need to be considered due to the speed they have been moving upwards in the market. As a result, regularly benchmarking salaries (to ensure you’re on top of what others are paying) will help to keep key people.

Closing Thoughts

Looking ahead, it’s apparent that there isn’t enough civil/infrastructure talent to deliver on the needs of the industry. Demand for skilled workers on roads, rail, tunnel and bridges will continue to magnify across the board and companies need to think out of the box to attract the staff they need to remain competitive. Working with a specialist civil construction recruiter is one way to keep you ahead of the curve – whether you’re looking to hire Civil Engineers or your next Project Manager, partner with us to support all your recruitment needs.