Sponsored by Kinexus.
The Australian defence sector is on the brink of a critical skills and workforce shortage. Investment in defence projects has been ramping up since the release of the 2016 Defence White Paper, but where are the workers going to come from? And when we find them, how do we keep them?
More and more, defence companies are finding it harder to deliver to their project quality and schedule requirements because they can’t fill their teams with the right kind of people. Let’s take a look at the reasons why that might be, and what you and your company can do to get ahead of the problem.
Kinexus has been surveying the Australian defence sector for the last 18 years and counting. Every six months, we produce a publication called the Kinexus Defence Industry Insights, which gives both employers and workers a deep dive into all the factors that affect the supply and demand for workers, such as projects, skills, hiring intentions and demographics. Now running into our fifth year of publication, Kinexus’ Defence Industry Insights is in its Sixth Edition – and wow, let’s just say there is a lot to cover; but let’s start somewhere that will feel familiar to everyone: money.
Money, the most important factor in choosing any job, right? The number one reason you’d either accept or stay at a job. That may be true if you’re a Wolf of Wall Street type, but if you were thinking that’s a characteristic of defence sector people… you’d be wrong. Sure, money is important; but it’s not the most important thing.
In Kinexus’ Defence Industry Insights – Sixth Edition, we collate our intel on a broad range of defence sector skill sets to illustrate average salaries and earnings, by state and territory. We also did a survey of 14,792 people, and asked them to tell us what are the most important factors that would either attract them to a new role or retain them in their current position. The results may surprise you.
As it turns out, the factors that have the greatest impact on employee job satisfaction in the Australian defence sector are:
- Interesting work
- Work-life balance / flexible working conditions
Money is important, but interesting work and work-life balance are really important too. What does this tell us about the defence sector workforce; what they’re looking for in an employer, and what defence companies can do to make them look our way and not pass us over for a role in the resources industry or big banking just because it pays more?
Kinexus’ salary survey also illustrated that the growth rate of defence sector salaries is slowing. In our 2018 report, salaries showed an overall increase of 4.4%; in the 2019 report, the increase has dropped to 1.8%. There are still many cases where we saw considerable increases in particular skill sets, as well as variations by state. Overall, however, the rate of increase in defence sector salaries was mostly impacted by the broad downturn in the growth rate of ICT salaries.
There’s a good reason for this. Most defence companies are starting to reach their planned salary caps, and no longer have much room to move. This is causing a cooling in the rate of remuneration increases, but the demand for workers with defence-critical skill sets is not slowing. As a result, companies are starting to have to consider other factors and strategies to attract and retain the workers they need.
One such strategy is offering support and benefits in addition to remuneration. Traditionally, defence companies have paid their people a base salary plus super, and little – if any- additional monetary or tangible benefits. However, this is steadily changing. 58% of respondents to Kinexus’ salary survey indicated that they receive additional remuneration and benefits from their employers; this could be anything from bonus payments, salary sacrifice, or paying for things like parking or insurance.
Importantly, we’re also seeing a lot more interest from defence companies in the concept of employer value proposition (EVP). Looking again at the factors that have the most impact on our survey respondents’ job satisfaction, it appears there are many things defence companies are getting right – as well as a significant opportunity for improvement.
The interesting work is there; no one would argue with that. Many defence companies are taking the necessary steps to provide their people with a better work-life balance, including offering flexible working conditions, and increasingly, we are seeing defence companies finding creative and alternative ways to reward their workers with remuneration and benefits additional to salary.
The companies that develop, quantify, promote, and – most importantly – live those attributes will be the ones who are able to establish a positive image for their brand, and ultimately to be seen as an employer of choice. The insights gathered by Kinexus will help defence companies answer critical questions around attracting and retaining the workforces they need.
I have been with Kinexus for most of the company’s history, originally having a background in Navy myself. Even before the release of the white paper and the subsequent flurry of investment in defence projects, we knew there would be a workforce challenge and a critical skills shortage. I have seen the signs of a shortfall, and I’ve been preparing for it for the last five years.
As a nation, we have an opportunity to build a strong and enduring workforce off the back of these programs, not just for the Australian defence sector, but for many other industries.
During this time of great change and complexity, I am proud to be in a position where I can help defence organisations gain the confidence they need when it comes to workforce planning. I believe that with the right intel and insights, defence companies can trust that they are making the right decisions.
It’s not going to be easy. Australia’s defence sector workforce challenge is real, and we’re already seeing the effects of a limited pool of workers with the required skill sets; but that’s not to say there’s no opportunity. To develop our national defence capability, and to contribute to the ongoing security of our nation, defence companies must learn to realise / make the most of this opportunity.
To me, that’s the real challenge.