Small businesses at mercy of miners

Small businesses are increasingly at the mercy of the mining sector as wage expectations take their toll on employers across the country.

According to the Australian Bureau of Statistics, wages in the mining sector grew more than 20% over the year to September, outpacing national salary growth of about 7%.

Small businesses, particularly those in mining state Western Australia, are facing an uphill battle in recruiting and retaining staff as they are unable to match the high salaries on offer from the mining companies.

According to Ambit Engineering Recruitment, wages for chief engineers on mining projects have surged almost $30,000 since August, while administration assistants have enjoyed salary rises of up to 5% over this period.

Drivers on about $70,000 a year in the eastern states can demand upwards of $120,000 to work in WA’s resource-rich Pilbara region.

Meanwhile, the December Advantage Job Index experienced the biggest fall in job advertisements, down 2.3% from November.

The worst hit sector was retail, recording a drop of 12%, followed by tourism and hospitality at 10.77%.

Of the 16 job categories, only two sectors – engineering and mining, and human resources – recorded growth of 1.7% and 1.17% respectively.

In addition, all states were down except for WA, which recorded growth of 1.19%. WA is also the only state where unemployment sits below 5%.

Bob Oliver, director of global market intelligence at Advantage Resourcing, says the engineering and mining sector will continue to dominate the jobs market in 2011.

“If you look at the 12-month job figures, the overall number of jobs advertisements is up 22.9% yet engineering and mining is up 47.5%,” Olivier says.

“In WA, engineering and mining is up 76.86%, and WA generally is up 46.05%. WA is the strongest performer [in the country] and engineering is the strongest performer within that.”

Olivier says small businesses, particularly those in WA, need to think of staff retention strategies other than large salaries if they are to compete with the mining companies for skilled workers.

“The attraction has got to be [the promise of] working with an expert, working with someone who is passionate about their business, working close to their employer and learning from them,” he says.

Olivier believes a support mechanism should be made available to the small business sector to help them deal with the threat of the mining sector.

He also suggests migration as a solution to the skills shortage, which would subsequently ease wages pressure.

The Chamber of Commerce and Industry of Western Australia says it wants the Federal Government to open up temporary migration channels to ease the pressure during times of low unemployment, a measure widely supported by businesses.