specialised engineering occupations

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SPECIALISED ENGINEERINGOCCUPATIONS

Submission to Skills Australia

31 March 2010

Contact: Andre KaspuraPolicy Analyst, International & National Policy, Engineers Australia

11 National Circuit Barton ACT 2600Tel: 02 6270 6581 Fax: 02 6273 4200

Email: [email protected]


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Specialised Engineering Occupations

ENGINEERS AUSTRALIA 31 March 2010 Page 1

1. The Engineering Team

The Australian education system offers engineering qualifications at several levels of competency.Universities offer Bachelors degrees of four years and three years (full time equivalent) durationand also Associate degrees and diplomas and advanced diplomas in engineering. TAFE collegesoffer diplomas and advanced diplomas in engineering. University Bachelors degrees inengineering are accredited by Engineers Australia and discussions are presently underway toextend the accreditation process to diploma and advanced diploma courses offered by TAFEcolleges.

In the workforce, engineering services are often closely inter-related. Some engineering services,depending on circumstances, can be undertaken by engineers with any of the qualificationsmentioned above, but other engineering services require the application of competencies that areavailable only in qualifications with longer durations. For this reason Engineers Australia prefers toconceptualise the arrangement of engineering qualifications into the engineering team.

The engineering team comprises:

Professional Engineers apply lifelong learning, critical perception and engineering judgmentto the performance of engineering services. Professional Engineers challenge currentthinking and conceptualise alternative approaches, often engaging in research anddevelopment of new engineering principles, technologies and materials. ProfessionalEngineers apply their analytical skills and well developed grasp of scientific principles andengineering theory to design original and novel solutions to complex problems.Professional Engineers exercise a disciplined and systemmatic approach to innovation andcreativity, comprehension of risks and benefits and use informed professional judgment to

select optimal solutions, justify and defend these selections to clients, colleagues and thecommunity. Professional Engineers require at least the equivalent of the competencies in afour year Bachelors degrees in engineering.

Engineering Technologists exercise ingenuity, originality and understanding in adaptingand applying technologies, developing related new technologies or applying scientificknowledge within their specialised environment. The education, expertise and analyticalskills of Engineering Technologists equip them with a robust understanding of thetheoretical and practical application of engineering and technical principles. Within theirspecialisation, Engineering Technologists contribute to the improvement of standards andcodes of practise, and the adaptation of established technologies to new situations.Engineering Technologists require at least the equivalent of the competencies in a threeyear Bachelors degree in engineering.

Engineering Associates apply detailed knowledge of standards and codes of practice toselecting, specifying, installing, commissioning, monitoring, maintaining, repairing andmodifying complex assets such as structures, plant, equipment, components and systems.The education, training and experience of Engineering Associates equip them with thenecessary theoretical knowledge and analytical skills for testing, fault diagnosis andunderstanding the limitations of complex assets in familiar operating situations. EngineeringAssociates require at least the equivalent of the competencies in an Associate degree inengineering or a diploma or advanced diploma in engineering from a university or TAFEcollege.


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The relationships described above define the complementarity between the three levels of theengineering team. Engineers Australia believes that this complementarity is the key to optimising

productivity in the delivery of engineering services. This is especially important when there areengineering skills shortages. Deploying inappropriate engineering skills and competencies doesnot make the best use of the skills available and so can intensify the impacts of skills shortages.Engineers Australia believes that the most appropriate way to proceed is to investigate theavailability of skills and competencies at all levels of the engineering team and to instigatecorrective policies to bring forward a balanced team.

2 Evidence of Engineering Skills Shortages

In the Governments revised arrangements for skilled migration, skills shortages are seen as shortterm cyclical phenomena to be addressed by employer nomination visas, by sponsored visas byState and Territory Governments and bt temporary 457 visas. The independent skilled migrationprogram is intended to supplement skills in which Australia has a medium to long term shortage.The Skilled Occupation List (SOL) is intended to apply only to the independent skilled migrationstream. Engineers Australia contends that Australia has a long term shortage of engineers at alllevels in the engineering team. This part of the Submission briefly reviews that evidence.

Australian Engineering Graduation Levels

Australia engineering graduation levels have been largely static (Table 1) but is showing somesigns of increasing in recent years. This is particularly the case for Professional Engineers. Theapparent 5.0% increase between 2007 and 2008 should be seen against the graduation levels in2004. This shows a smaller increase of 1.1%.

Graduations of Engineering Technologists showed signs of increasing in 2005 and 2006 but in thelast two years have fallen back to the levels experienced in 2002 to 2004.

The only clear signs of growth in Table 1 are for Engineering Officers or Associates. Graduationshere increased from 3,391 in 2002 to a peak 4,025 in 2007 but fell back slightly in 2008. Whileencouraging on the surface, these statistics need to be understood against the strongly skeweddistribution of TAFE engineering specialisations between jurisdictions. In NSW, the two largestgroups of graduates are in Mechanical and Industrial engineering and Electrical and ElectronicEngineering. In Victoria, the largest group of graduates is in Manufacturing Engineering. InQueensland, the largest group of graduates is Other Engineering and in Western Australia it isElectrical and Electronic Engineering. This pattern of graduations requires particularly high mobility

to locate graduates to areas of high demand.

The statistics in Table 1 are all entry level graduations that have the potential to move into theengineering profession. Table 1 uses the Australian Standard Classifications of Education(ASCED). The actual numbers of degree graduates that move into the labour market are about9.6% smaller1. This is the proportion of graduates who move directly into full time higher educationstudies. This proportion varies from over 13% in chemical engineering to zero in miningengineering.

1Graduate Careers Australia, Graduate Destinations 2007, www.graduatecareers.com.au


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TABLE 1

THE POTENTIAL FLOW OF NEW GRADUATES TO THE ENGINEERING PROFESSION

MEN

POTENTIAL FLOW TO 2002 2003 2004 2005 2006 2007 2008

Engineering Officer (University) 176 141 115 134 106 213 269

Engineering Officer (TAFE) 2810 2850 2905 2898 2961 3070 2968

Engineering Technologist 473 449 441 583 679 475 472

Professional Engineers 4098 4224 4398 4016 4252 4324 4574

Total 7557 7664 7859 7631 7998 8082 8283

WOMEN

Engineering Officer (University) 10 15 9 7 8 72 78Engineering Officer (TAFE) 405 390 420 550 595 670 651



Total 1339 1358 1362 1475 1525 1578 1597

ALL DOMESTIC ENTRY LEVEL GRADUATES

Engineering Officer (University) 186 156 124 141 114 285 347

Engineering Officer (TAFE) 3205 3300 3165 3530 3556 3740 3619



TOTAL 8886 9082 9061 9188 9523 9660 9880

Source: Statistics supplied by DEEWR and NCVER

Unemployment Among Engineers

Unemployment rates measure the prevailing balance between the demand for labour and itssupply. Unemployment rates among qualified engineers in Australia have been considerably lowerthan in the labour force as a whole indicating that the demand for engineers is much stronger thanthe demand for labour in general and the supply of engineers is much weaker than the supply oflabour in general.

Direct time series statistics on the labour market for engineers can be obtained from the ABSLabour Force Survey. This survey was designed to assist responses to macroeconomic policyquestions and has been demonstrably successful for this purpose. But the Labour Force Surveywas not designed to provide statistics for microeconomic analyses addressing policy in respect tospecific occupations. Statistics at this level are fraught with standard error problems andmeaningless for practical purposes.

A much better alternative is to use 2006 Population Census statistics to set a comparativebenchmark that can be complemented by other statistics to allow sensible judgments about thesituation. Table 2 shows the unemployment rates for degree and diploma qualified engineers in


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Australia in 2006. No distinction can be drawn between Professional Engineers and EngineeringTechnologists because the ABS defines a Bachelors degree to have duration between 3 and 6

years full time equivalence. Thus the Table is confined to the distinction between degree qualifiedand diploma qualified engineers. The latter includes Associate degrees and advanced diplomas.

TABLE 2

UNEMPLOYMENT RATES FOR ENGINEERING EDUCATION SPECIALISATIONS IN 2006

SPECIALISATION DEGREE DIPLOMA ALL LABOUR

QUALIFIED QUALIFIED QUALIFICATIONS FORCE

Engineering & Related

Technologies NFD 2.53 2.64 2.56 106,148

Manufacturing Engineering 4.42 4.77 4.52 1616

Rest of Manufacturing Engineering 4.66 5.42 5.29 4030

Chemical Engineering 3.11 6.58 3.29 5829

Mining Engineering 1.79 1.65 1.75 3877

Materials Engineering 3.05 2.37 2.85 4384

Rest of Process & Resource Engineering 3.95 3.21 3.56 3621

Automotive Engineering 4.92 2.17 2.66 338

Rest of Automotive Engineering 0.00 5.50 5.45 220

Mechanical Engineering 3.13 2.88 3.02 18573

Industrial Engineering 5.10 3.37 4.52 1218

Rest of Mechanical & Industrial Engineering 4.76 4.49 4.50 844

Construction Engineering 3.67 0.00 3.67 381

Structural Engineering 2.66 3.34 2.92 1334

Building Services Engineering 0.00 0.00 0.00 22

Water & Sanitary Engineering 0.00 0.00 0.00 72

Transport Engineering 3.72 0.00 3.72 215

Geotechnical Engineering 2.36 0.00 2.36 127

Ocean Engineering 0.00 0.00 0.00 16

Rest of Civil Engineering 2.46 2.34 2.43 20336

Electrical Engineering 3.05 2.48 2.85 17484

Electronic Engineering 4.06 3.34 3.74 7110

Computer Engineering 4.32 7.26 4.84 3860

Communications Technologies 6.49 3.54 5.05 5547

Rest of Electrical & Electronic Engineering 5.61 2.93 3.59 21397

Aerospace Engineering 2.18 2.37 2.22 1618

Aircraft Maintenance Engineering 0.00 2.31 2.31 1428

Aircraft Operations 3.09 2.85 2.91 8843

Rest of Aerospace Engineering .. 0.71 1.21 580

Maritime Engineering 5.43 2.27 2.93 1501

Rest of Maritime Engineering 3.33 3.67 3.60 3582

Environmental Engineering 3.76 6.12 3.86 1087

Biomedical Engineering 4.60 0.00 4.28 421

Rest of Other Engineering 4.64 1.24 2.44 2130

ALL SPECIALISATIONS 2.97 2.92 2.95 249,789

Source: ABS, 2006 Population Census T ablebuilder

Estimates are shown for all major engineering specialisations. The statistics in Table 2 are alsoclassified using the ASCED system because the deployment of skills throughout the economy isbetter reflected by an education based system than an occupation system. A more practical reasonis that educational qualifications held do not necessarily line up with an individuals occupation oroccupational status. By definition an individual in an occupation is employed so that unemploymentcannot be measured this way.

When the 2006 Population Census was conducted the unemployment rate for the Australianlabour force was 5.24%. In Table 2, groups of engineers that have unemployment rates at orabove this rate are highlighted in yellow.


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Table 2 demonstrates several important issues: Only 3 groups of degree qualified engineers (Communications Technologies, Rest of

Electrical and Electronic Engineering and Maritime Engineering) had unemployment ratesat or above the national rate.

Only 5 groups of diploma qualified engineers (Rest of Manufacturing Engineering,Chemical Engineering, Rest of Automotive Engineering, Computer Engineering andEnvironmental Engineering) had unemployment rates at or above the nationalunemployment rate.

With the exception of one group, Engineering and Related Technologies not furtherdefined, most engineering specialisations are comprised of relatively small stocks ofindividuals. Even relatively large groups (such as Mechanical Engineering with 18,573; themain body of Civil Engineering with 20,336 and Electrical Engineering with 17,484) aresmall when compared to the labour market at large.

Key groups of engineers have exceptionally low unemployment rates including Mining

Engineering with 1.75%; Mechanical Engineering with 3.02%;(Rest of) Civil Engineeringwith 2.43%; Electrical Engineering with 2.85%; Electronic Engineering with 3.74%;Materials Engineering with 2.85% and many other groups with similar unemployment rates.

This result applies to both degree qualified and to diploma qualified engineers. In manycases the unemployment rates for diploma qualified engineers is lower than for degreequalified engineers including Mining Engineering (1.65% compared to 1.79%); MaterialsEngineering (2.37% compared to 3.05%); Mechanical Engineering (2.88% compared to3.13%); Civil Engineering (2.34% compared to 2.46%); Electrical Engineering (2.48%compared to 3.05%) and Electronic Engineering (3.34% compared to 4.32%).

Since the Census there has been very strong demand for engineers and these unemployment

rates will have fallen. Although the global financial crisis has interupted economic growth inAustralia, strong continuing growth in engineering construction, the infrastructure projectsannounced by State, Territory and Federal governments and new coal, gas and iron ore projectannouncements point to a resumption of the strong demand for engineers. What is important isthat there are no anecdotal reports of unemployed engineers despite the record skilled migrationintake of engineers in 2008-09.

Skilled Migration of Engineers

Australias migration intake of engineers has shown exceptional growth during the past 9 years.Table 3 shows that engineers have come to Australia under both permanent and temporary visaclasses. The statistics in the Table are classified according to the now outdated Australian

Standard Classification of Occupations (ASCO) and are intended to reflect labour marketdestinations rather than just educational background. There are important limitations to thesestatistics. The statistics relate to degree qualified engineers only. Work is in hand to obtain similarstatistics for diploma qualified engineers but this is not available yet. Nor are statistics for theengineering occupations in the Managerial occupations groups available at present. Never-the-less, Table 3 is sufficient to compare the magnitude of the migration intake to domesticgraduations and to the stocks shown in Table 2.


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TABLE 3

IMMIGRATION OF ENGINEERS TO AUSTRALIA

YEAR PERMANENT PERMANENT TOTAL TEMPORARY OVERALL

OFF-SHORE ON-SHORE PERMANENT 457 VISA TOTAL

2000-01 1240 31 1271 0 0

2001-02 1140 271 1411 0 0

2002-03 1447 451 1898 0 0

2003-04 1420 952 2372 1250 3622

2004-05 1732 1800 3532 1810 5342

2005-06 2312 1629 3941 2970 6911

2006-07 1980 2140 4120 3510 7630

2007-08 2503 1909 4412 4580 8992

2008-09 2746 2458 5204 4210 9414

Source: To 2003-04 Birrell, Sheridan and Rapson; since 2004-05 and 457 data

Department of Immigration and Citizenship

In 2008-09, when the global economic crisis was at its height, Australia accepted 5,204 engineersas permanent migrants. This compares to 5,914 new domestic degree qualified graduates in 2008.In addition another 4,210 migrant engineers were admitted on temporary 457 visas. Theseoutcomes provides a measure of the demand for engineers not satisfied by the potential supply ofgraduates. Assuming that 2008 graduates all enter the labour market in 2008-09, domesticgraduations comprise 38.6% of new engineers in the Australian labour market that year.

All key engineering specialisations were represented among the permanent migration intake. In2008-09, Civil Engineers were 23.2% of the intake; Electrical and Electronic Engineers were 24.3%of the intake; Mechanical and Production Engineers were 20.8%; Mining and Materials Engineerswere 7.8%; Engineering Technologists were 7.4% and Other Engineers, including ChemicalEngineers were 9.1% of the intake. When these statistics are compared to the stock statistics forthe engineering education specialisations in Table 2, the significance of Australias dependence onmigration for its engineers is highlighted.

In the Governments recently announced changes to skilled migration arrangements, temporarymigration is seen as an important component of how migration is expected to deal with cyclicalexcess demand in conjunction with employer nominations and State/Territory sponsorship underpermanent migration. As expected temporary migration of engineers fell in 2008-09 compared to

2007-08, reflecting the economic uncertainties of the time. What is surprising is that the fall wasjust 8.1% and the temporary intake of engineers, 4,210, was higher than in any other previous yearwith the exception of 2007-08.

Survey Evidence

Since 2006 Engineers Australia has included a number of questions on engineering skillsshortages experienced in the preceding 12 months in its annual survey of engineering salaries.The survey is aimed at business entities, both private and public sector, that employ large numbersof engineers. The results of the survey are consistent with the evidence discussed above. In 2006,2007 and 2008 over 70% of business entities experienced significant problems in recruiting


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engineers. In 2009, despite the global financial crisis, 53% of respondents still experienced thesedifficulties. The survey considers actions taken by businesses to deal with the shortages and the

consequences of engineering shortages. Details can be made available.

3 Engineers Australias Position

In Submissions responding to the discussion papers proposing changes to the former MODL andto the migration points test, Engineers Australia has supported the direction of the Governmentsskilled migration programs. Engineers Australia reiterates that support.

Available evidence strongly supports the view that Australia will need to continue accepting largenumbers of qualified engineers in its skilled migration programs. Domestic graduations areshowing some signs of increasing, but the changes that have occurred to date have only justovercome an earlier falling trend in graduations. This change may have been encouraged by thestrong demand for engineers but is not yet sufficient for Australias needs.

The benchmark statistics from the 2006 Population Census show that unemployment rates formost engineering specialisations were exceptionally low. These low rates were evident for bothdegree qualified and diploma qualified engineering groups.

There has been strong growth in demand for engineers since the 2006 Population Census. Theevidence for this is the large intakes of both permanent and temporary migrant skilled engineerssince then. The permanent migration intake was not affected by the global financial crisis, althougha lagged effect may become evident later. However, the strong intake of temporary visa engineersin 2008-09 and the comparatively small fall in this intake from 2007-08 suggests any lag in the size

of the permanent intake is likely to be just as small.

Skilled migration of engineers is an expression of strong excess demand for engineers relative todomestic supply. The migration intake is evenly divided between permanent and temporary visaclasses and, together with the scale of the intakes, indicates that on-going supplementation ofdomestic supply through permanent migration will be necessary for some time.

Engineers Australia strongly believes that the engineering profession is most productive whenengineers with different skills and competencies work in teams to complement each other. Theevidence shows that there are shortages of diploma qualified engineers and degree qualifiedengineers. There are a few categories of engineers in each group that are the exceptions to thisgeneral desciption. However, for all major engineering specialisations this conclusion holds.

Engineers Australia acknowledges that the application of the concept of specialised occupationsto the Skilled Occupations List (SOL) is a significant improvement over former arrangements.However, this concept is also partially susceptible to the market forces that determine labourmarket destinations. Because of this rigid application of the concept is not necessarily in the bestinterests of skilled independent migration. Engineers Australia believes that as well as includingCivil engineering Draftspersons and Technicians on the SOL, the inter-dependency that is criticalto maximising engineering productivity suggests that the following occupations should be includedon the SOL:

ANZSCO 3123 Electrical Engineering Draftspersons and Technicians ANZSCO 3124 Electronic Engineering Draftspersons and Technicians


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ANZSCO 3125 Mechanical Engineering Draftspersons and Technicians ANZSCO 312912 Metallurgical or Materials Technicians

This proposal is consistent with the statistical arguments presented in this Submission andEngineers Australias views on how to maximise productivity from the engineering team.

Table 2 demonstrates that not all engineering specialisations were in short supply in the 2006Population Census. The Table demonstrates the importance of definitive information at theappropriate level of disaggregation. For Example when Manufacturing Engineering andTechnology is considered as a whole the unemployment rate that is produced is close to the ratefor the labour force as a whole. But when disaggregated to focus on specialist ManufacturingEngineering shortages are evident.

In recent years there have been important changes in the degree groups highlighted in Table 2.

The number of degree graduates in Electrical and Electronic Engineering has fallen sharply from1,727 in 2001 to 1,076 in 2008. This group includes the Rest of Electrical and ElectronicEngineering and Communications Technology. If this trend continues then the circumstances ofthese groups may change, particularly as the roll out of the National Broadband Network proceeds.Similarly, there have been changes in Maritime Engineering education including the incorporationof the Launceston Australian Maritime School into the University of Tasmania. The implications ofthis change will need to be worked through.

However TAFE graduations in Manufacturing Engineering have remained relatively high. This,together with the concentration of these courses in some jurisdictions, is an issue that requiresattention. There is a similar issue in respect of TAFE graduations of chemical engineers andautomotive engineers. Finally, the largest group of TAFE graduates is in Electrical and ElectronicEngineering which accounts for about one third of TAFE engineering graduates. This groupincludes diploma level electrical and electronic engineers who are in short supply andcommunications technologies who are in over-supply.

Engineers Australia has little confidence in DEEWR skilled vacancies surveys. These statistics arenot an adequate substitute for ABS statistics. Surveying skilled vacancies cannot provide statisticsabout the labour market status of engineers. Statistics on skilled vacancies reflect the churn thatoccurs in the labour market as well as genuine unfilled vacancies. There are also other problemswith the surveys relating to data collection and occupational coverage.

Engineers Australia believes in evidence based policy design. In skills development and migration,

statistics to support analyses are fragmented and often based on different classification systems.Engineers Australia believes strongly that the present statistical base for migration policy requiresserious development to increase the level of objectivity possible.

specialised engineering occupations

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