Engineering & Technical Recruitment Market Commentary October 2012

Our experience of the national engineering and technical recruitment markets over the past quarter can best be described as “patchy”. Some sectors are doing OK whilst some are really struggling. The most dramatic event we’ve witnessed has been a big pull-back in hiring in the resources and related sectors over the past 3-4 months. From where we sit, Sydney with its diversified economy is the strongest at present in terms of hiring confidence. The temp / contractor side of our business is holding strong because generally speaking, when companies still have activities they need undertaken, employing on a temp / contract basis is giving them greater flexibility and they have less of a commitment than with a permanent hire.

Following are our more specific observations of some of the key recruitment markets we have been operating in.

Automotive and Manufacturing

The manufacturing and automotive sectors continue to be reasonably quiet although relative to last quarter the manufacturing sector has picked up marginally. Companies are still reluctant to hire permanent staff and have a preference for meeting additional work demands by hiring contract or on-hired employees. Overall, hiring activity in industries such as waste and food is quite healthy whilst demand in the automotive sector continues to be very subdued.

A sample of the professional technical roles we’ve been recruiting of late in the Melbourne market include Manufacturing Engineers, Field Service Engineers, Senior Project Engineers, Quality Managers and Business Development Managers in the general manufacturing, food and automotive industries. In Sydney we are experiencing success with Sales Engineers, Production Managers, Plant Managers and Technologists for both contract and permanent positions.

Our on-hired industrial labour hire team in Melbourne are embarking on their busiest time of year and have been busy recruiting to meet client needs particularly in the food sector. Experienced Process Workers and Packers are in high demand. Clients are ramping up for Christmas and need experienced Forklift Drivers to prepare for their Christmas deliveries. In the trades area there has been an increase in demand for qualified Motor Mechanics and Toolmakers. Other areas in manufacturing have remained fairly stable.

On-hired labour hire in Sydney is experiencing strong growth in the waste industry with increased demand for Tradespeople and Labourers. The warehousing / distribution and food industries are showing healthy ongoing demand for Pickers / Packers and Process Workers whilst in manufacturing, we need experienced Boilermakers, CNC Machinists and ticketed Welders. We are still experiencing the impact of candidate attraction to the mining states which is having an effect on the overall candidate availability for NSW.

Building Services

Although we hate to say this, we are struggling to report anything positive this quarter because the outlook for the rest of this year and the next doesn’t appear to be very promising.

The Melbourne market is generally flat and whilst some companies have ongoing work, most are not inclined to add new staff at this time.

The Sydney market outlook from all accounts is depressed. We understand builders are struggling to find new work and prices are falling to almost unsustainable levels. One Building Services Consultant even went as far as saying that he expects things will only pick up in late 2013 when the State Government begins to invest again.

The Brisbane market is no better as the State Government doesn’t appear to have the money to invest in institutional projects.

The South Australian market is steady but when the current workload has finished, the future looks uncertain. On the other hand, Western Australia keeps powering on and seems to be the shining light when it comes to the Building Services industry, although how long this will last, no one knows.

However, keep in mind that recruitment has not stopped and whilst some companies won’t employ in this market, there are others with openings for candidates that can bring value.

Civil Infrastructure

There is no doubt that things are quiet across the board in any form of construction in Queensland, including civil infrastructure. The good news is that things are starting to lift and projects nearing construction phase will help boost the sector’s confidence.

Brisbane is still moving very slowly, however there is still a lot of work in resources and infrastructure sectors across remote Queensland, especially for highly experienced professionals.

Our most active civil clients are the tier two and tier three companies which are looking to secure solid performers for when the market picks up again.

Consulting Engineering

As we move into the last quarter of the year we have not seen significant change in dealing with the large consultancies in NSW – many projects are still on hold or have been cancelled. In many cases this is a knock on effect from the slight cooling off in the mining industry. In the past quarter a number of our clients have put recruitment on hold whilst they restructure their existing business models. We are still making permanent placements with small to medium sized consultancies mainly for experienced engineers.

In Queensland, it was an interesting quarter to say the least. A new government, a new tax and some major changes, especially across the public sector. Client confidence stalled and this has had an impact on hiring decisions. The feedback we are receiving from our engineering consultancy client base is simply that they are ‘waiting it out’. It appears most companies are tendering for the same projects and waiting for long, drawn out periods to receive a result.

In recent weeks things have been looking up and we are expecting this rise to continue through to the end of the year to a level we are more accustomed with here in Queensland. In saying this, we are still relatively busy and still have roles available for experienced mid to senior level engineering professionals across multiple disciplines. Positions in Brisbane may not be at the same demand level of the previous 6 months however Central right up to North Queensland are still very keen to secure talent.

We would encourage any experienced professionals in Queensland (or looking to work in QLD) to update your details and send a copy.

Drafting

The middle of the quarter showed some promise of renewed activity for Drafters in Melbourne, but unfortunately this was short lived and demand backed off. There was a slight increase in demand for Civil and Structural Drafters although this has also levelled out. Activity within manufacturing still remains low. There has been an increase in enquiry from available Drafters and Designers from WA and SA due to cancellation of a number of projects and large numbers of candidates becoming available. Rates are still competitive – although most candidates are prepared to be flexible. Contract durations are still tending to be short term with the potential for longer term work although as that is never guaranteed, contractors continue to hunt for contracts with long end dates.

In NSW, with some mining projects having been put on hold, a number of engineering consultancies have let contract and permanent Design Drafters go – as a result we have a large number of very experienced Design Drafters available, mainly in the materials handling area, looking for opportunities. This has contributed to downward pressure on rates of pay for the contract Drafters as they compete to secure an assignment amongst a diminishing pool of available contract positions. On a brighter note, some clients are saying this may change in the coming month so we are keeping in contact with valued clients so we can be ready to assist when the market does change.

Smaller engineering and manufacturing companies are still hiring both contract and permanent Drafters and we always have a need for experienced Solidworks, Revit and Inventor Designers in the Sydney and Newcastle areas.

Electronics, Software and Communications

The report card for the quarter just ended should read “Could do better”. This refers, of course, to market confidence and employer temptation to hire as much as to a recruiter’s results – both tend to be directly linked. As the year moves into its last quarter, the hoped-for growth spurt has not really happened – vacancies due to growth are spasmodic and replacement opportunities seem to be the bread and butter of our diet. Yet, surprisingly, a few unexpected opportunities have arisen in automotive for design of one category or another, while openings for talented FPGA Engineers are still around (not necessarily in abundance). The electronics and firmware/software market in Melbourne is quite a robust environment with start-ups and new players taking up much of the slack from the big, established players so we anticipate that this will hold out for the foreseeable future, but there is no doubt that it is a buyer’s market just now.

Employers seek the best candidate with exact skills and will still be prepared to pay a good package to get the “right person” in most cases. Of course, there is a trend in low to middle order experience jobs for downward pressure on salaries to be applied and that is evident also. One could perhaps say that it is a case of “the rich getting richer and the poor getting poorer”, in that the upper quartile of candidates can state their price and often get it, while the remainder have to fight to maintain their status salary wise. This is a generalisation, and individual circumstances will differ, but it is a perception that needs to be borne in mind when job hunting (or employing).

Openings for hardware and firmware design have been very patchy, whilst PC software developers with .NET have been more in vogue. Employers are using a very fine mesh to attract exactly the right mix of skills, experience, aptitude and attitude. If only the USA and Europe could get their act together, then we would all reap the rewards (we hope). Watch this space!

Mining

Following 2011’s mining bonanza, recent changes in the Queensland State Government have created fear in the eyes of many within the industry. This has driven some to make decisions they typically would not have made. Queensland for example has recently taken the blow of the carbon and the mining tax, resulting in many residential Queenslanders packing up and heading over to Western Australia to chase the bigger dollars.

Despite these changes, there are still companies seeking experienced and talented personnel. We target the technical facets of mining including Mine Engineering, Mine Surveying, Geology, Management, and corporate level roles. What we are finding is that a majority of candidates are holding back in the short term to see how things pan out with the industry. It is clear however that Gold is the leading commodity within the industry and is the commodity that we are actively working in the most – we are particularly active with the mid-tier gold miners across Australia.

The Metalliferous sector has been presented with an opportunity with declining iron ore and coal prices. We now have more talent available to choose from (those both actively job hunting and others who we are approaching) and more family oriented candidates wanting to make the move into the ‘safer’ commodity.

Invitation to join our LinkedIn Group, “Australian Engineering Career Network”

Are you an engineer or do you recruit engineers? If so, we’d like to invite you to join our LinkedIn Group, Australian Engineering Career Network by clicking here.

Operating for 33 years, Australia Wide Personnel is one of the largest recruiters of engineers in Australia. We feel this places us well to host a LinkedIn Group which offers the following:

• Online participation in engineering careers discussions with fellow engineers and recruiters of engineers – share your experience and knowledge, ask questions of other engineering professionals and expand your network of professional engineering contacts.
• “Ask an Engineering Recruiter a Question”.
• Ability to post or access engineering jobs listed by group members.
• Access to regular engineering news feeds.

The Group is growing rapidly and already has over 2000 members since commencing in January last year. If you know of other engineers who may like to join this group, please forward this email to them. If you would like to join the Group but are not a member of LinkedIn, you will need to join LinkedIn first (free) by using the same link above.