Australia In Technical Skill Crisis! Will Need 200,000 Engineers by 2040

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Australia needs 200,000 engineers by 2040

In numbers, a shortfall of 200,000 engineering professionals is predicted to weigh heavily on the Australian engineering industry by 2040, which will have grown at a rate of roughly 74% in terms of labour demand in the given span of one and a half decade.

A report titled Engineering a Better Future: Australia’s Growing Crisis in Engineering Skills details the projected shortfall of engineers in the engineering workforce. To prevent such shortfalls, one of the initiatives being taken by the Australian immigration department is to increase the quota for migrant engineers each year. This is in spite of the fact that roughly 58% of Australia’s engineering workforce constitutes migrant professionals as of 2023.

Key takeaways

  • A shortage of 200,000 engineers by 2040 as predicted by the Australian trade union for engineers and employers
  • 8.2% of Australian graduates are engineers, way behind Japan’s 18.5% and Germany’s 24.2%, barely catching up with Canada’s 12%, reports Engineers Australia
  • Professionals Australia (trade union) claims that the shortage is inevitable due to the rapid growth of employment vacancies in Australia’s industrial sector
  • Australian government has already increased the skilled migration quota with policies to remain consistent
  • Additional measures like reducing visa cancellation, extending visas for temporary migrant engineers, and extending administrative help to labour trade unions are already under process.

Why is Australia predicting such a huge shortage of engineers?

The first reason being the rapid growth of the manufacturing, mining, innovation and tech industries, which is further enhanced by a consistent attempt to generate more eco-friendly, i.e., greener modes of production and sustenance. The engineering industry is heavily tasked with a responsibility to accomplish this feat, and the resulting scenario shall be one that is projected to create a huge number of vacancies in existing and novel roles by 2040. Such will require a heavy supply of skilled engineering professionals, Australian-born and migrants alike.

Sectors such as infrastructure, energy, defence and technology will drive the demand for engineers up to 472,874 against a projected supply of 269,807, which is a deficit of roughly 200,000 professionals by the year 2040.

Projected skills gap in Australian workforce by 2040

As of 2022, the number of engineers in Australia roughly equates to 230,600 professionals in the field. That means, if the projected supply is to be considered true, then by 2040, the number of engineers will increase by only 39,000, which may be considered a 17% growth. Whereas, the required growth to meet the projected demand is a staggering 74%.

Insufficient enrolment of Australian-born students into engineering programs at universities is one of the reasons for this projected deficit.

In figures, only 8% of all Australian graduates are engineers, which is not even comparable to 24% of German graduates or roughly 19% of graduates in Japan. While Australia falls behind Germany and Japan in terms of both percentages and numbers when it comes to producing engineering graduates, Canada topples Australia in terms of percentages at least with 12%, albeit not in numbers.

This still remains a picture that shows the decreasing tendencies of Australian-born students to opt for other graduate programs at universities, although engineering is one of the highest-paying professions in Australia.

A part of the reason is the immense level of competition faced from international students who graduate as engineers as well as migrant professionals in the same field who thrive in the sector.

This is also the main reason why Australia is pushing so aggressively towards expanding the migration quota for skilled professionals, predominantly from the engineering sectors.

What steps are being taken by the Australian government?

Expanding the skilled migration quota is now being considered the best measure to keep up with the growing vacancies in an industry that has consistently depended on migrant engineering professionals. It’s almost evident with Australia’s record-breaking 2023-24 allocations for skilled migration which indicates that Australia is taking their need for migrant engineers very seriously, considering that engineering professions make up a large chunk of the entire skilled allocations.

The government also plans on tackling an inherent wage disparity that spans across not only genders but different migrant communities as well. Such disparity is naturally present in any economy, regardless of the degree of egalitarian policies in place. For engineers working in Australia, the biggest advantage that will help them offset the wage gap is that the number of vacancies for engineering professions far outnumber the unemployed. This essentially shifts the supply-demand curve in favour of the migrant engineers to leverage their compensation negotiation power over employers.

One of the suggested labour-market instruments to further increase the negotiation power of migrant professionals is to streamline the effectiveness of labour unions that exclusively cater to migrant engineering professionals.

On the 5th of June this year, the government of Australia issued a press release and conveyed their initiatives to work with labour unions and industry stakeholders to implement systems and labour policies that will protect the migrant engineers from unemployment and underemployment. If done systematically, migrant engineers will be able to remain uniform in their expected salary demands, preventing employers from using ‘baits’ to favour only a few migrant minorities with employment over a vast number of other communities.

ACTU President Michele O’Neil welcomed the government initiative and said in a press briefing,

“Migrant worker exploitation is a national shame – we welcome the Albanese Government taking action to protect migrant workers from exploitation and to implement key recommendations of the Migrant Worker Taskforce – after years of inaction by the Coalition Government.”

In terms of immigration policy, additional measures by Prime Minister Anthony Albanese’s Labour government will include:

  • Preventing unnecessary visa cancellation of migrant engineers
  • Extending periods of temporary visa in order to allow migrant engineers more time to land a suitable job in Australia
  • Extending visa for migrant engineers in special cases where they have yet to collect their full compensation from their employers
  • Safeguarding the ‘Fair Work Ombudsman’ from government and private influences so that it can impartially and more vigilantly investigate migrant workers’ rights and call for due action against unfair employers.

All these measures are designed to essentially drive more immigrants with engineering degrees into the Australian workforce and to make the journey from relocation to job confirmation in the relevant field a more fluid process for migrants. These policies are also designed to maintain the balance between Australian-born engineers and migrant engineers in the workforce. This is one of the crucial aspects to tackle since one of the very fundamental reasons for discriminatory tendencies are rooted in the idea that migrants are a threat to Australian-born citizens, albeit a factually incorrect idea. Rather, it is observed across a diverse spectrum of industries that when recruiting and hiring practices remain more inclusive, companies tend to grow at a higher rate.

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