What recent news really means for engineering jobs in Australia

Iron Ore price may have jumped, but the  big picture 

offers less cause for confidence. 

Recent surges in iron ore prices may be a comfort to some, but before anyone starts getting too excited, they should look to the wider view and the inevitability of long term decline in need from China.

This month the news is good. A 6.7% jump resulting from news of approvals in Chinese Infrastructure projects. It’s enough to put the price back over $100 a tonne, which though well short of the $150 high, is at least over the recent $90 level.

There remains however, an inevitable truth to be faced. China’s economy is shifting. As the Chinese population starts to consume more of its own products, rather than relying on external markets for exports, its need for steel and the raw materials used to produce it, will drop and drop.

Steel futures in Shanghai are dropping as we speak. While China continues to overproduce steel, the $150bn in approved projects will not be enough to build confidence in future need. Only cuts in production at Chinese steel mills will stabilize the price.

But in a market that’s seriously fragmented who’s going to do that? Who’s going to compromise their market share? And what are the state run facilities going to do about the jobs it will cost? The answer is that everyone is going to hope for a solution somewhere else in the supply chain.

Today Fortescue will ask lenders to waive debt covenants. As the world’s fourth largest iron ore producer, the company is suffering severely from the weak demand in China, its largest market. Fortescue has avoided raising equity capital, hoping instead for a rebound in commodity prices.  

Meanwhile, confusion reigns in India. In Goa, ‘serious illegalities and irregularities’ in mining operations have led to a freeze in production, as New Delhi continues to seek drops in exports to fulfill domestic need. India’s exports to China have dropped significantly – by 40% April - June.

So what does all this mean for the Australia mining job market? Time will tell, but the outlook is not immediately positive. It is the demand for minerals that has protected the Australian economy from the worst of the global financial crisis. But the fall in commodity prices, the closure of mines and - most significantly for engineers – the postponement and cancellation of expansion plans, will start to pull this protective blanket off the national economy.

The good news is that not everything is about mining projects.  Demand for engineers on LNG projects remains strong and our clients have continued to seek talent for ongoing expansion. As one door closes another one opens.

But there is a truth to face here – China will not be the magical bodyguard of the Australian economy forever. 

No end in sight for Australian LNG jobs as US check book remains on the table

We get a lot of questions about the future of LNG for Australian engineering jobs. And I do mean a lot. Few things seem to occupy the minds of our industry colleagues across the world as much as the potential that LNG projects represent for the Australian economy and for the immediate future of global engineering jobs. Not since the 2003 spike in inquiries provoked by the Iraq reconstruction project, or the mass interest in building jobs for the London Olympics have I seen this much interest on one area of the global industry.

For now, Australia is at the centre of the engineering world. And it is foreign investment from the USA that is really driving the expansion, with relatively little of the money coming from China. 

Fred Hochberg, Chairman of US Ex-Im bank and a close economic advisor to President Obama has been in Australia this week to enforce the US’s commitment to sustained investment in the region, in the face of renewed efforts from China to lead spending over here.

"US investment is frankly far greater than any Chinese investment in Australia - it's the No 1 source of FDI (foreign direct investment) into Australia," said Hochberg while visiting Australia Pacific LNG on Curtis Island.

So America’s message is clear – We want you to know we care about you. Low interest loan money currently flooding in from the US is a clear signal that the US sees Australia as a safe bet for the long term. Investments from Ex-Im have been welcomed far more readily here than those coming in from China. The low interest loan money is linked to projects with heavy involvement from US companies like Bechtel and GE, so it’s a popular strategy within the US.

Cumulative US investment topped $550bn in Australia over the last seven years, compared with just $21b from China, Chevron's decision to push forward with its gigantic Gorgon and Wheatstone projects in Western Australia is a significant driver of this investment.

To justify this level of expenditure, we have to supply the human capital to get the jobs done. Where are the skilled labor jobs and engineering jobs going to be filled from?

The reality is that just as the investment money is coming from the US, a lot of the skills we need will have to come from outside too. If we handle it right, it will be good for us in the long term. 

We need to bring in resources from outside Australia to execute projects now and to help train and develop the next generation of Australian engineers who can fill engineering jobs in LNG for the next decade. The time is now. 

Never mind Lara and the tourists, where the bloody hell are the engineers?

Lara Bingle enticed tourists to Australia in 
the famous ad

So the papers are all up in arms this week over the defection of Lara Bingle, the model who promoted Australian tourism in the famous and sometimes controversial  ‘Where the bloody hell are you?’ ad.

Lara’s talents, it seems, are for sale to the highest bidder. In this case New Zealand. Fair enough; the woman is a professional, let her take work wherever she can find it. The job market for models, like any other profession, is international.

I don’t think we’re suffering too much. Six million tourists visited our shores over the last year, a 0.5% increase on the previous year. Considering the economic state of the countries that yield a lot of our tourism dollars, we should be glad of these numbers. Especially while Europe is still frantically searching under the sofa for its lost credit card, and the Americans are on self imposed lock down.

Let’s face the fact that tourism is far less of an issue right now than encouraging the right number of high skilled migrants to move here for long term temporary assignments and fill some empty Australian engineering jobs.

Australia will become the world's biggest liquefied natural gas producer, by 2020 as it unlocks its 100 year reserves. Analysts predict it will soon overtake current leader Qatar.

Seventy percent of the world's 10 major LNG projects are under construction here and billions are being spent on infrastructure year on year.

The biggest threat to achieving this growth and all the benefits that come with it is people. We don’t have the engineering skills in the quantity we need them in house and we need to look overseas for them now. We need to look to the UK and Europe to build our engineering workforces and absorb the key skills into the Australian population in greater numbers.  

So if you see Lara, tell her to find a drawing board and a hard hat and make Australian engineering jobs sound sexy and exciting. Australia may need her yet. 

There is no such thing as too much opportunity

How many of us have looked down a restaurant menu and complained that there were too many things to choose from? We don’t mean it. What we mean is – this is great. As long as we basically understand what we want, the choice can only empower us.

My TV has 500 channels on it – more than I could possibly watch and more than I want to surf through. But I don’t have to surf through them. I understand what each option basically represents and I can go straight to what I want, or occasionally luck into something I wasn’t expecting. If I’m shopping for a new car, I’m better off at a lot with 5,000 cars than 500. As long as I have someone to help me get to the make and model I want, at the right age and price range, I don’t have to worry about the 4,950 cars I’m not interested in, unless I see something along the way that I didn’t know I was interested in.

At no stage is the amount of choice actually a bad thing.

The debate rages on across Australia as to the best way to manage your career and find the right job opportunities. We all know engineers are in high demand and that the work is everywhere. What engineers need to ask themselves is ‘Am I getting enough choice?’

Despite the wealth of possibilities for engineers today, a lot of people are massively restricting their options by trying to manage their career choices alone. If you’re applying directly to major employers and simply waiting for a response, you’re missing opportunities every day. If you’re trying to manage your applications one by one, you’re simply not boxing clever. Find yourself a decent recruiter, and you’ll see a step change in the quantity and quality of opportunity available to you.

You’re also missing out on some important benefits. Your agent can hustle for you; they can chase down answers and expedite the hiring process. The right agent will have enough influence with their client to actually get you the job.  They can show you options you may never have considered, help you compare rates and salaries and understand where you fit.

But all of these benefits are relatively small compared to the central, overwhelming advantage: Recruiters, who live their lives in the job market making hundreds of phone calls every week and meeting with new projects and new companies every day of every week for years on end, can give you access to far more opportunity than you could ever find yourself. How many different companies did you visit last month? How many projects did you walk through? How many new hiring managers and HR professionals did you meet? Not many. And why? Because it’s not what you do. You cannot do your job and look for the next one at the same time unless you are prepared to limit yourself to a far narrower range of opportunity.

This is the biggest mistake made by professional engineers in Australia. There is help and advice available; it never costs you a dollar at any stage and the benefits are obvious. Find yourself somebody good, with a strong reputation and infrastructure behind them. The result will be more opportunity, more choice and a faster way to achieve your objectives, whatever they are. 








Trevor Burne is Managing Director of Talascend. He blogs about Australian engineering jobs, and issues affecting Australian Engineers.

Hey Recruiter, Get off my Cloud.

Recruiters using Linked-in are driving me crazy. They’re flooding their profiles, and mine, with random job spam that neither targets me personally nor attempts to add value to my life. I’m ditching recruiting contacts left, right and centre because I’m so annoyed by the outright laziness of their tactics. 

It happens in so many spheres of life. If you put a coat of fresh paint on a large wall in any major city and leave it overnight, when you return in the morning it will be covered from top to bottom in posters and fliers, hawking everything from exotic dancers to cheap gold. It’s a shoddy, opportunistic approach, with no respect for the community or the potential customers that exist within it. Just jam it up there at any old angle and people will see it. It has to be better than nothing right? Wrong.

To treat an online market place like a useful fly posting spot for your random jobs is short sighted and naïve. You may get the occasional response, you may get a few, but you’re still taking a short cut that will ultimately lead you nowhere.

The currency of the Social Media market place has always been information, not distraction marketing. You have to build your audience the same way you would at a party; you have to share information, exchange ideas and build a sustainable network. That is the road to real, long term success. 

   

This week Josh Kaplan over at Talascend’s IT division talked about the growing value of Facebook as a job seeking tool. More and more people are finding employment on Facebook. According to a recent study, 18,000,000 Americans found their current job on Facebook. This is way more than Linked-In, and yet nobody posts jobs on Facebook. Instead they build networks of contacts that yield useful information through an exchange of information. Sooner or later, it leads to work.

If Recruiters continue to spam every job that crosses their desk out across Linked-in, they will decrease its value to them as a networking tool. Your customers don’t want to see every thought as it enters your head and nor do your peers and others in your industry sector, although your competitors might find it helpful to know what you’re recruiting on.

When was the last time you checked to see how many people had dropped you as a Linked-in contact? You should. And if you find it’s a great deal more than you thought, you might want to think about it before you spam your next job.

Recruiters have a critical role to play in helping people get the jobs they deserve and move their careers forward with real direction. If they think we're in it for a cheap buck, they will desert us in droves - and we will deserve it.




Trevor Burne is Managing Director of Talascend. He blogs about Australian engineering jobs, and issues affecting Australian Engineers.