In this two-part series, the New Energy team sits down with James Simpson, Workplace and Employment Partner at Hamilton Locke, to discuss who will build Australia’s renewable energy transition.
During our interview, we ask how Australia can attract skilled offshore labour in a competitive, global market, and consider how Australian governments and employers can work in tandem to retain top talent.
We continue the conversation with James Simpson to discuss what the newly introduced labour hire provisions in the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 will mean for the New Energy Sector. To read Part II click here.
Key Takeaways:
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Given the global scarcity of specialised blue- and white-collar employees in the renewable energy sector, how can Australia compete on an international scale to recruit the best talent?
There are two aspects to this question. Firstly, there are policy considerations. Employers need all levels of Australian government to implement and strengthen policies that support renewable energy development. Australia is at risk of being at the back of the queue for technology and skills without a sustained political (including financial) commitment to the renewable energy transition. This includes streamlining immigration processes for offshore skilled employees and investing in training programs to upskill and retrain the local labour force.
Secondly, from an organisational perspective, employers need to consider how to make their employment opportunities attractive to the best talent. Given the fierce competition and tight labour market, Australian employers must think outside the box and look beyond remuneration to attract and retain employees. Employers may do this by offering flexibility and other short- and long-term incentives that promote work and life balance. For example, employers may grant flexible working requirements during phases of a project which are less labour intensive. Alternatively, employers may share project success with employees through project bonuses, commissions or deferred cash benefits.
Is engaging offshore labour a band-aid solution? From a policy perspective, how do you suggest we balance retaining onshore labour and attracting offshore labour for the next 20 years and beyond?
Retaining onshore labour and attracting offshore labour are not mutually exclusive from both an industry and policy perspective. Even if there is a targeted focus on local training and upskilling over the next five years, there will still be a skills deficit. In the short term, the skills gap will only be met by recruiting offshore labour.
While there is a tendency to view engaging offshore labour as a band-aid solution, the reality is Australia missed the opportunity to invest in and develop these skills over the past decade. Australia is now lagging ten to fifteen years behind the leading countries in the Northern Hemisphere (notably Norway, Scotland and Spain). We must increase investment and attract skilled offshore labour to stay competitive in the global clean energy “arms race”. Hence, attracting skilled offshore employees needs to sit alongside a well-developed, medium to long-term strategy around training and upskilling the local workforce.
How can employers leverage the skills of offshore labour to effectively share the wealth and benefits of a project locally?
Employers can share the benefits of local energy projects by recruiting and training local employees who are interested in transitioning into the renewables sector. It is important to differentiate between the different types of labour (skilled and unskilled) that are required during the different phases of an energy project. Currently, the difficulty in the renewable sector is attracting highly specialised and skilled employees in technical roles (for example, engineers and project managers).
However, there is ample opportunity for employers to provide training to semi-skilled and unskilled employees at job sites, especially during the construction phase. This solves two issues. First, it creates local employment opportunities and upskills the national workforce. Secondly (and relatedly), it improves local stakeholder engagement and reduces the reliance on offshore employees in the long term.
One of the criticisms of renewable projects is that labour engaged in traditional energy sectors (oil and gas) are made redundant. What is often overlooked is that some of the skills required in both sectors are incredibly transferable. For example, electrical engineers employed at a coal fired power station can easily transition into a renewable energy power plant, and those in offshore gas can transition into offshore wind.
Is there scope and value for employers to develop their own accredited training program to upskill the local workforce?
Given the current gap in renewable energy training programs, employers should consider whether they can offer a structured training program or apprenticeship to attract employees and accelerate the training and upskilling of employees. This would build Australia’s renewable workforce and reduce our reliance on offshore employees. These types of programs would be mutually beneficial to both employees and employers and the sector broadly.
More broadly, there is scope for industry leaders and operators to come together and create an accredited program that is recognised sector wide. Having a national training program will make it easier to hire skilled and semi-skilled labour, and in the future, employers will be able to hire from a pool of employees that have undergone the training program. The accreditation will guarantee the skills of the employee and ensures Australian standards (for example, WHS standards) are upheld. One of the key issues with offshore employees relates to those employees not being licenced (or difficulties associated with verifying licenses). Ideally, Australian governments might incentivise employers via funding or subsidies to develop these training programs and ensure national standards are upheld.
The Australian Energy Infrastructure Commissioner, who is responsible for community engagement as it relates to renewable energy projects, has emphasised that projects need to offer training programs so that affected communities receive long term benefits. Upskilling local communities is an effective way of ensuring the economic prosperity of regional communities well beyond project completion.
What stakeholders need to work collaboratively to achieve this?
We need all stakeholders to work collaboratively to accelerate the renewable energy transition in Australia. To ensure a smooth transition, all levels of government, industry leaders (in both the renewable sector as well as adjacent industries such as the coal and gas sectors) and, crucially, unions must be engaged.
For example, one of the barriers we anticipate in developing an accredited training program will be the different licensing requirements across different states. Hence, there is a need for both government and industry support to roll out a uniform program on a national scale.
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.
James Simpson leads Hamilton Locke’s workplace and employment practice. James’ experience spans across advisory and litigation in employment and labour law. This includes complex employment litigation, organisational restructuring, industrial relations management, international workplace law, Equal Employment Opportunity (EOO) and discrimination, work health and safety, and major workplace investigations.
