The Skill Shortage to end all Skill Shortages !!

In my last article I discussed the job market in Australia and abroad as it stands for employees. In this article I will discuss the current situation for employers looking for candidates to fill vacant positions.

So before the credit crisis we had a deep skill shortage in the field of Quantity Surveyors, Estimators and Contract Administrators etc. Has that changed based on the fact that there should be more candidates on the market due to redundancies? Well not really if you are looking at Australian candidates. Very few good ozzy candidates have been let go and when they do become available they are snapped up very quickly. Astute companies have recognised that now is the time to procure talent and have used the downturn to pick up candidates that would not normally be available. A great strategy that will leave the stronger companies stronger and the weak weaker.

However if you are looking at employing offshore candidates from say the UK or Ireland then you should have no problem picking up the travelling candidates that are currently looking for contract work. There is always a steady stream of Irish backpacking QSs arriving at Sydney airport and the good ones are excellent at measuring and cost planning. However you may also need to employ and interpreter as you will not be able to understand a word they are saying!

But there is a big problem looming. After the crash of the late 80s lots of construction professionals left the industry to persue alternative careers. This produced a skill shortage that was also fueled by a weaking education system and a waning draw card for industry entrants. Result – the skill shortage that we now have. So if it is bad now – what is it going to be like when the market starts to pick up again? I think we will be staring at the mother of all skill shortages in the QS profession. A recent article in a Queensland newspaper noted that graduate QSs were not provided with the adequate skills to cope with the current property market (see our website : http://www.conduitgroup.com.au/stories/professional/news/QS_courses_skill_shortage.php) So there are no new graduates, current students are not trained properly and existing QSs will leave the industry to follow different career paths. An emptying pool an all accounts! Wow – with this sort of doom and gloom reporting I should be working for the Government or the media!

So how are companies going to find staff in the very near future when the market starts firing again. Well, here are a few suggestions:

• Start hiring now – as suggested above the current climate can produce some top performers that have been let go through no fault of their own – snap them up
  Start an Academy – you can no longer rely on the educational facilities to train Quantity Surveyors. Companies will have to take on board some of this responsibility by setting up training centres. Sponsorships could be put in place to attract the best performers from the Universities and TAFE and then carry on the educational process at work. Get known at all the relevant educational institutions and get hold of the best students. You’ve got to grow your own.
  Create a Strong Brand – get the candidates to come to you based on your reputation in the market place and your presence in the media. People are attracted to bright lights as well as moths.
• Try out some travellers on contract and ensure the best candidates stay. Help them with visas and be nice to their girlfriends! There are some really excellent candidates in the UK at present who are looking for any excuse to move to Australia. Plus there are quite a few Australians in the UK looking to return. I know it can sometimes be a dissappointing process employimg offshore candidates but very soon it will be the only option again. Local QSs don’t grow in the garden!
• Outsource time consuming processes like BOQ production to free up surveyors for more high level functions. Using BOQ shops in Sri Lanka and India is becoming more and more popular and makes a lot of sense as long as the product is guaranteed.
• Attend career expos and events and try and spot some bright young sparks that you can feed into the entry level of your organisation. Look for the right attitude and then train them up. Keep them loyal to your company with incentive schemes that benefit both the employer and the employee.

So with the right processes in place employers can make sure that they are not constantly scrabbling around for the right candidates at the last minute. The smart approach is to breed your next level of seniors and management level QSs. The skill shortage will only get worse and there is no solution on the table as yet. Good luck and I’ll see you out there in the market place.

Written by Adam Walker – Director at Conduit Recruitment.

The State of Play - The current job market for QSs in Australia and Abroad

This article was written for the 2nd issue of the AIQSs Building Economist for 2009

One of the duties of a recruitment consultant is to provide honest and relevant advice to candidates and clients. We are at the forefront of the job market on a daily basis talking to job seekers, clients of all kinds, industry bodies, forecasters, job boards and the media. We know what’s happening.

The main thrust of this article is to provide advice to the Australian QS whether they are at home or abroad as to the status of the job market in Australia or abroad – mainly the UK, UAE and Asia. It is focussed towards the employee rather than the employer – the latter will be the focus of the article in the next issue.

In Australia the usual employers of QSs, Estimators, CAs, Commercial Managers and Contracts Managers have seen their market chopped off at the knees. Confidence is low and credit is in short supply. Don’t get me started as to whether this state of affairs is a good thing or a bad thing, or whether we should have seen it coming, or when it will end, or if it will be the same next time around or ................. whatever – it’s here! Lots of consultants, developers and builders have recruitment freezes on and the others are being very cautious before taking on any new staff.
However it has become very evident that there is STILL a skill shortage in Australia for quality construction professionals. There was never enough to go round in the first place and not that many quality people have been let go. Employers are only letting good staff go if there is no other option – it took them so long to find them in the first place that they would only retrench them is absolutely necessary. For instance I have 3 Estimator positions vacant at the moment and no appropriate candidates have shown up yet. If the crash of the early 90s caused a skill shortage in construction what is the next busy period going to be like?

However there are still jobs going. Where are they?

• Government work – the nation building stimulus work has already created positions and this will only increase. Billions of dollars have to be spent in areas such as schools and housing in a very short period of time, and QSs will be needed to control the spending. Government agencies, consultants and builders who have won this work will very quickly need commercial staff – some are already taking on extra resources in this area.


• Infrastructure – if you want to become in demand then get some infrastructure experience such as roads, bridges, ports etc. Google the recent federal budget forecasted spending program and all will become clear.


• Defence – the DOD does not necessarily employ QSs but the industries that supply them certainly do, such as builders and consultants that service that sector.


• Claims – in the good times claims are sometimes put on the back burner. However when the economy tanks and people have more time to chase old money the requirement for claims experts increases. Both builders and claims specialist consultants are in need of QSs with experience in preparing claims, defending claims and expert witness capabilities.


• Estimating – if you are a good estimator with commercial awareness and experience across the various procurement options then you are still very much in demand. There are currently a number of large builders and developers looking for estimators across Australia. Experience in civil works as well as large projects is always attractive.

So what about offshore? Well the UK is a basket case! Many QSs have been laid off and every week you hear of major firms retrenching another tranche of surveyors. Things have got so bad now that QSs are forming support groups so they can meet up and discuss their plans and lick their wounds. If you were thinking of moving to the UK – I would put that plan on hold for at least 6 months.

And what about Dubai – or the Middle East in general. Well Dubai is bankrupt and was bailed out by Abu Dhabi. Professionals are leaving the emirate in droves and there are classic stories of people abandoning car loans and rental leases and just jumping on planes and leaving their problems behind them. The airport car park is awash with abandoned cars! The party is over for a while in Dubai – how long for – probably not that long and when oil prices go back up the market should get back on track. Abu Dhabi has survived in better shape, and so it should, as it’s the main backer of Dubai and has all the oil. However consultancies and builders are still in wind down mode and if you were thinking of a move over to the desert I would leave it at least 3 months. You should also think about the recent offshore tax implications of the recent budget as this will certainly affect your decision if money is your impetus.

Asia will always be a power house and although our clients in Hong Kong are not urgently recruiting at present there will always be a need for a quality commercial QS that part of the world. There are a massive amount of infrastructure projects planned in HK over the next few years which should provide a very busy work platform. It will take a few more months for the dust to settle over there but a career move to Hong Kong is always a good option in my opinion.

So in summary if you are a QS in Australia you will have faired much better than most in other parts of the world. Whether the recent bounce in the stock market actually is the precursor to a recovery is too early to tell and many people will give you many different scenarios. But if you are an experienced QS with good credentials then your future should be pretty secure in the short and long term. Although there are fewer vacant positions across Australia than there were 12 months ago – they are still there and in slightly different areas…… so adapdability is also a required trait. Salaries are lower too but that correction is probably long overdue as wages were getting a little out of hand! $60k per annum for a student was just silly!

Next issue we will address the status for employers – watch this space.

2009 construction forecast: can it weather the economic downturn?

It’s all over the news that business and consumer confidence is low and that Australia and other Western economies are heading for tough times. Money is tight, many business sales are falling and company directors are wondering whether their business will survive the downturn.

The spectre of job losses is looming across the general economy as the financial jitters spread out across numerous industries including the Quantity Surveying and Construction sectors.

Construction has been following a steady path during the past decade with continual single digit growth in output. The rises have not been as spectacular as other sectors, but the flipside is that it is predicted that the fallout from the current economic troubles will be nowhere near as severe. However, it is clear that this sector like many others is not immune from the crunch.

The private building sectors have been the hardest hit with many banks developing cold feet and becoming more cautious in funding new projects. Private infrastructure spending is still rising, but apart from that, things are gloomy, which shows how important public spending is.

Alastair McMichael, a Director of Rider Levett Bucknall agrees that the private infrastructure sector has been impacted significantly with “numerous projects put on hold or cancelled due to the shockwaves that are travelling through the Quantity Surveying and Commercial Construction sectors.”

McMichael’s predicts that their workload in the New Year could potentially be “substantially reduced and we will be looking into new opportunities as internal resources become more available.”

Rachel Callaway, National Research Manager of Davis Langdon explains despite the doom and gloom, on a “global level we have seen a lot of former expats returning to Australia as they are no longer required in international jobs. Therefore we are seeing a higher calibre of candidates in our industry.”

“This time last year everyone was screaming skills shortage, now the tables have turned dramatically. Economically, it will take awhile for the situation to turn however the government’s quick act to inject money into the infrastructure sector will help.”

It is evident that the outlook for the construction industry is somewhat cloudy with revenue expected to increase by only 4% in 2009-10 and just 2% in 2010-11. Although, despite this somewhat disappointing prediction, there is still hope with it forecasted that there will be nearly 90,000 construction workers needed every year between now and 2012.

A Director of a National Infrastructure Organisation says “despite the obvious slow down, we won’t be changing our area of focus too much during 2009. If we were purely a building company we would notice a more substantial slow down but because we are well diversified we will have enough to keep us going.”

“The current economic climate will see project funding becoming much harder to secure and will probably never revert to that of the past few years. You will need to have a fundamentally secured project to receive funding, including excellent fundamentals, and larger equity invested with less debt. 2009 will start off very flat and probably wont get up and running until the first half of 2010 where more stimuli will come back into the economy.”

A Project Manager of a National Construction Company agrees that “You currently have to look at projects in cycles as a job we start now won't be finished for nearly two years and the economic climate might be different by then. Everyone knows there is a shortage of housing as the demand is there, the problem is affordability and finance.”

“We are still expanding as a company because the work is still coming through. If residential wobbles a bit then we are looking at other areas such as hotel construction, which is booming. All our skills are transferable between the two, so you just have to adapt when things get a little tighter.”

Director of Conduit Recruitment Adam Walker says that recruitment in the construction sector has also been hit by the downturn. “We have found that most of our clients are either laying people off or have established a recruitment freeze.”

“As far as recruitment in construction is concerned, what we are finding is that there are a lack of vacant positions but also a lack of candidates as the quality candidates have not been let go. Smart companies are using this time to attract candidates who may not have been available in busier times.”

Conduit Recruitment Construction Consultant Greg Ford agrees that “there is an enormous amount of uncertainty in the sector. We are finding that many of our clients have had projects cease or be put on hold, but for some construction companies it is a question of adapting and moving into other areas where work is still ongoing.”

“The beginning of 2009 has seen many of our clients madly tendering with predictions that it will be quiet for most of 2009. We have found that many of our clients have switched their focus from placing permanent roles to contract.”

As for the overall prediction of what 2009 will bring, the building sector will suffer as long as private development has all but stopped. Building will most probably stagnate, infrastructure remuneration might continue to move upwards but it won’t increase at the rate it has in the past.

Alastair McMichael says that during 2009 they will be “sitting tight and keeping our existing team together.”

Adam Walker agrees that there is a lot of “wait and see for clients in the construction and infrastructure sector, although the search for hard to find specialist skilled workers such as client estimators has not ceased.”

“In terms of the skills shortage, there will always be a skills shortage in the construction and quantity surveying space. Although there are presently fewer jobs available because of the climate, when things start to pick up the shortage will not have disappeared.”

The economic downturn has caused a construction slump as these leading construction professionals have revealed, and although there is a vast array of prediction and opinion, the general consensus seems to be that we will have ‘to wait and see’.

Is it all Doom and Gloom? - An Interview with an Executive Chairman

It’s all over the news that business and consumer confidence is low and that Australia and other Western economies are heading for tough times. Money is tight, many business sales are falling and company directors are wondering what the outlook looks like for 2009.

We interviewed an Executive Chairman from a National Infrastructure Organisation to grasp an idea of how the current economic climate has affected the construction sector and what they foresee for 2009.

How has the current economic climate affected your Industry in Australia, and workload in general?
Yes we have been affected, private building is very weak but government building projects remain strong. In mining, top tier miners are still spending (albeit reduced) but second tier miners have stopped expansion. There is still a lot of money being spent in rail; the government sector in particular is very strong. Gas is also a strong industry with there being a number of schemes for liquefied natural gas in Western Australia, Queensland and Darwin. Other areas are going strong such as water treatment plants, recycling and the pipelines.

In regards to the areas of construction that you specialises in which areas have you found to be hit the hardest, and why?
The private building sector has been the hardest hit, which is made up of residential and commercial projects. The reason is finance related with banks changing both their cost of funds and their lending criteria to developers.

Where will you now be shifting your focus or what do you foresee as becoming your main area of interest?
We won’t change our focus too much; if we were purely a builder we would slow down, but because we are well diversified we will have enough to keep us going.

Do you think that the current economic climate will have a lasting effect on the construction industry and what do you foresee as being some of the long term ramifications for the industry as a whole, if any?
Project funding will become much harder to secure and will probably never revert to that of the past few years. You will need to have an fundamentally secured project to receive funding, meaning excellent fundamentals, high degree of pre sales and larger equity invested with less debt.. 2009 will start off very flat and probably wont get up and running until the first half of 2010 where more stimuli will come back into the economy.

In the Construction and Property sectors, salaries are considered considerably good, do you see them changing, staying the same or increasing? Why is this?
Building will most probably stagnate, infrastructure remuneration might continue to move upwards but it won’t increase at the rate it has in the past.

With the current state of the market, have you found that Gen Y employees are concerned or worried about their jobs?
This generation has never experienced a recession before. Many employers have been biding their time through the boom times and will now look to show the Gen Y’s that the boot is on the other foot. We are not like that. We love the vibrancy and diversity of the contribution from Gen Y’ers.

Do you still envisage a skill shortage in Australia, calling for offshore candidates or will you now focus more/only on local talent?
Research shows that by 2018 there will be more people leaving construction than entering into it. We must continue training and bringing on graduates – this is a critical part of our business model. We also appreciate the importance of continuing hiring graduates cadets and apprentices.

What are your predictions of your immediate workload moving into 2009?
We expect to remain slow to steady in 2009 – certainly slower than 2008.. In general, the building sector will suffer as private development has all but stopped. State and Federal governments are being responsible by investing heavily into infrastructure – the trick will be just how quickly they are able to get these projects off the ground.

Careers in the Middle East - Special Report

In the Weekend Australian newspaper Conduit Recruitment are featured in the Careers in the Middle East Special Report. I was interviewed by journalist Mark Eggleton about the current job market in Dubai and where the market is headed during this economic downturn.

Bulls, bears and what’s looming over the horizon

IT’S the big question for Aussie jobseekers thinking of making the leap to the Middle East: is it still booming or is it heading for bust?
It probably all depends on who you talk to, and what industry they’re in when it comes to discussing the effects of the global downturn on the Middle East job market.

On a bullish note, the managing director of human resources specialists, EFI International, in the Middle East, Dr Francine Pinnuck suggests the good times are set to roll on.
Sitting in her Dubai office, she remarks: ‘‘ There are so many cranes on the skyline, that it’s difficult to count them. I can see 20 at a glance in just one direction.

‘‘ The world has never seen anything like the scope of development happening here at present. It’s a massive boom and while the downturn may come, I would expect it to be short.’’
Conversely, Adam Walker, a director at Conduit Recruitment, paints a rather less rosy picture with at least one large property developer putting a freeze on international recruitment.
‘‘ We have even had a few offers of employment withdrawn,’’ Mr Walker says.
Conduit specialise in the property recruitment market and, according to Mr Walker, the picture isn’t rosy right across the Middle East.

He suggests the downturn could be deep, especially with capital drying up and oil prices flattening.
‘‘ Dubai could especially be effected as it does not have a lot of oil and much of its development is debt-funded,’’ Mr Walker says, ‘‘ and just like everywhere else, they’re finding it hard to find money at present.
‘‘ You look at the big local developers such as DAMAC and they’re already retrenching people and have put in place a freeze on recruitment.’’

Mr Walker says job opportunities could also dry up due to circumstances not associated with the Middle East.
‘‘ There are a lot of British companies based in the region, and rather than offer redundancies to staff in the UK as the downturn bites there, they may just transfer staff to the Middle East,’’ Mr Walker says.
On the plus side, Mr Walker says the trough may not be deep. He suggests the situation may change over the next six to 12 months. ‘‘ The big infrastructure projects are still slated to go ahead, so there should be opportunities opening up there,’’ he says.
He says the price of oil will no doubt rise and much of the United Arab Emirates will recover relatively quickly, although he’s not so sure about Dubai.
‘‘ The Dubai property bubble may soon burst,’’ he says. ‘‘ At present, it’s a real false economy with investors paying high prices for big returns.
‘‘ It doesn’t sound like a problem, but half of the apartments are empty because investors just lock them up at completion and wait for the market to rise. It doesn’t make sense to rent them out.

‘‘ On the other hand, rents are high because there’s not much stock on the rental market even though there’s an oversupply.’’
Dr Pinnuck is well aware of the overheated rental market as she recently signed a lease on a two-bedroom apartment requiring a $60,000 downpayment upfront. To her, the high price is merely a reflection of the robust economy in Dubai.
‘‘ In this region, it’s always blue sky; we remain optimistic,’’ she says.
At present, EFI International is working closely with the local stock exchange in Dubai and, according to Dr Pinnuck, it’s all business as usual.
‘‘ They’re really focussed at present and have a good board in place,’’ she says.

The company are also working with the ruling family on a number of initiatives designed to help local companies structure their businesses more effectively.
‘‘ Working throughout this region is such a satisfying experience,’’ she says.
‘‘ Sure, it’s hot and we work long hours, but the cultural diversity and the passion of the people from all over the world, make it so rewarding.’’

Conduit’s Adam Walker agrees, it’s a rewarding place to work in more ways than one.
‘‘ With the Aussie dollar weakening, the region is looking very attractive at present,’’ he says.
‘‘ With the local Dirham currency tied to the US dollar, it’s much better than six months ago, doubly so considering that you pay no tax. The problem is that there are not a lot of jobs around at present.’’

Dubai Cityscape Conference - A Vision of Tomorrow

A couple of consultants at Conduit along with myself recently attended the Dubai Cityscape Conference.

Cityscape Dubai 2008, in its 7th year, is the largest business-to-business real estate investment and development event in the world. Cityscape Dubai attracts regional and international investors, property developers, governmental and development authorities, leading architects, designers, consultants and all senior professionals involved in the property industry. It provides an annual forum that celebrates the very best in real estate, architecture, urban planning and design from around the world.

About 60,000 participants from over 150 countries had gathered in Dubai, to be a part of the world's largest development exhibition and its associated conferences, which is expected to break all previous records. About 40,000 visitors flocked the Cityscape Dubai during the first two days of the show, which exceeds a total of three days of crowd gathering during last year's event.

With the world facing market uncertainty, we enter a new era in which the Middle East developers are expected to maintain or even increase their presence across the world.The intensity and scale of the iconic projects, is one of the most impressive property booms in modern history that has kept the UAE and Dubai in particular, on focus worldwide for most of the decade.

However, a report by the property consultants Colliers International stated that Dubai prices would drop by 16 percent during second quarter of 2008, and will remain flat until 2010, which came as bad news just prior to opening of the seventh Cityscape Dubai.

On the whole, about $100bn worth of new projects were launched on the first day of Cityscape. However, this news failed to ignite investor confidence, as there were growing fears about the global credit crunch and the possible overheating of the local property market. Starting from Dh.350bn beachfront project to a kilometer-high tower, the developers at the annual Cityscape exhibition in Dubai launched the usual series of mega-developments, which has been responsible for boosting the Gulf Arab Commercial hub to international fame.

While the Dubai mortgage lender Tamweel, announced plans to launch about Dh.2bn worth of Islamic bonds in 2009, the Sorouh Real Estate of Abu Dhabi announced that all its projects have been proceeding on track.

It is evident after attending Cityscape that we began to think about whether the large scale projects exhibited at the conference will actually be built. Although the shopping malls and apartment complexes look great now, when they are completed in 10 years time they will look dated. There was alot of talk surrounding Dubai and whether places such as Abu Dhabi will in fact prdouce bigger and better developments in the years to come.

It will be interesting to see as to whether other countries in the Middle East overtake Dubai with the grandeur and large scale of their developments. One thing is for sure that the Dubai Cityscape Conference will continue to be the largest property exhibition in the world attracting tens of thousands from all over the globe.

Prepare for the Candidate Interview (It doesn't take long!)

I recently read a great article written by Ross Clennett that outlines tips for Interview Preparation. Clennett's advice is below.

If we are serious about providing more than a resume-referral service to our clients, then our candidate referrals need to provide a high value-add component and interview preparation is a critical part of doing that.

Thorough preparation is essential prior to conducting interviews, to ensure that the 30 to 60 minutes we spend in an interview is time productively and effectively spent. Here's a preparation for interview list you might wish to use:

1. WHAT? Agreement with the client regarding the 4 or 5, competency-based key selection criteria.

WHY? Unless there is an agreement, you risk assessing the candidate against criteria which the client regards as marginal.

2. WHAT? Prepare behavioural interview questions that request sufficient, specific detail about a candidate's demonstrated capability in the 4 or 5, competency-based key selection criteria.

WHY? Unless you have prepared the questions, you risk asking each candidate different competency questions which makes comparing answers, to assess competency, much more problematic.

3. WHAT? Thoroughly review the resume of each candidate to be clear as to what information provided on the resume you need to validate (eg depth of current responsibilities), and what information not provided on the resume, you need to discover (eg reasons for leaving last 3 positions) during the interview.

WHY? Research on resumes would suggest that between 20% to 40% of resumes contain significant omissions or inaccuracies. It's the job of the interviewer to ensure that the resume they submit to the client is complete and accurate.

4. WHAT? Bring to the interview a copy of the job description and a relevant page or two of information about the client (from the client's website or elsewhere).

WHY? Build credibility with the candidate. What opinion of a real estate agent would you have if they didn't have a floor plan, couldn't tell you when the house was built, what the council rates were etc?

5. WHAT? Have an interview template.

WHY? Such a template greatly enhances your interview structure, ensures you list all the behavioural questions you need to ask, as well as sufficient space to write the answers to those questions .Writing everything on a candidate's resume makes it much harder, and takes a lot longer, to find the relevant information post-interview.

6. WHAT? Ask the candidate to bring in any relevant supporting paperwork (eg. referee names and contact details, originals of visas, degrees, testing etc).

WHY? Saves you chasing it up afterwards and helps you validate the candidate's bona-fides much faster.

7. WHAT? Email the candidate the details of the interview (time, date, place, parking, public transport etc) and then re-confirm by telephone within 24 to 12 hours prior to the interview.

WHY? Candidates may not write things down, may lose the paper they wrote the interview information on, may forget, may get a better sounding interview, or they can't be bothered etc etc.

8. WHAT? Book an interview room.

WHY? You look like a complete amateur if you keep the candidate waiting for an interview room or you have to interview them in an inappropriate place (eg, reception or a café).
The success, or otherwise, of most interviews is highly predictable. The first factor is the interviewer being effectively trained in interviewing and the second is the amount of preparation the interviewer does prior to the candidate arriving in reception.

The good news for you is that if the general standard of recruitment interviews is so low (as the Clicks candidate survey confirms), it doesn't take much for you to stand out from the crowd.