Defence industry has been resilient during COVID-19 and is set for strong growth
Federal Government has bolstered defence spending
Industry must address looming skills shortage
2020 has seen a seismic shift for the Australian defence industry workforce, and indeed the world’s population at large. COVID-19 changed the way we live, work and communicate; and its ramifications will be felt for some time in both the global economy and geopolitical landscape.
While some industry sectors have been severely hurt by the economic impacts of the COVID-19 restrictions and resulting downturn, the defence industry has remained robust with a strong growth and employment trajectory. This presents risks and opportunities that will influence the prosperity and security of Australians for decades to come.
While the defence industry has remained resilient through this challenging time, the pandemic has thrown up major issues to be navigated in the immediate aftermath, throughout the restrictions, and now as we look to the future.
2020...What just happened!?
The immediate aftermath of the COVID-19 pandemic outbreak led to a relative freeze in hiring activities as companies paused workforce growth to dedicate resources to business continuity and worker safety.
Across the entire Australian employment market, job vacancies decreased by 43 per cent over the May 2020 quarter after the initial shock of COVID-19; the largest fall on record, according to the Australian Bureau of Statistics (ABS). ABS analysis showed that 93 per cent of businesses reported no vacancies at all in May 2020.
Job seeker sentiment was evidenced in Kinexus’ May 2020 survey, where 54 per cent of respondents stated that they believed that COVID-19 made it a great deal more risky to change employers.
However, workers in the defence industry fared well compared to adjacent sectors, with few layoffs, even among contracted workers. The defence industry was also well supported by the Federal Government, which fast-tracked payments to companies in the defence industry to help mitigate the business impacts of COVID-19.
Once organisations had addressed the first order priorities, they were able to re-examine their workforce requirements within the post-COVID economy, while developing and implementing new strategies to enable the hiring, induction and incorporation of employees within the new conditions.
Job seekers began looking to re-enter the market, albeit judiciously, as they carefully considered the cost and benefits of changing employers amid the new economic landscape.
While the defence industry broadly adjusted well to the ‘new normal’, some sectors responded more rapidly than others. The ICT sector, already well set up for remote working, was able to pivot quickly. Professional services employers were also able to react with relative speed, where their clients’ requirements allowed it. While manufacturing and logistics businesses have had the greatest level of complexity in responding to government health requirements, most are now operating at the maximum capacity permitted under current levels of restrictions.
Organisations are understandably taking a cautious approach to hiring decisions in the wake of the pandemic, however robust project schedules and longer term economic fundamentals underpinning the defence industry make continued workforce development critical. Projected hiring schedules need to stay on-track to avoid issues of pent-up demand. Attraction of suitably skilled talent from adjacent industries to the defence industry has already been identified as a priority in order to fill skill shortages in the years ahead.
Meanwhile, there has been a significant surge in recruitment applications to the Australian Defence Force, up by 42 per cent compared to 2019 - with skilled workers from sectors impacted by the COVID-19 downturns, including aviation, making up a substantial proportion of applicants.
The Kinexus Defence Industry Insights – Seventh Edition revealed the sector is entering a phase of strong hiring activity, with more than 3,000 new jobs set to be created in the next 12 months.
While many market sectors may contract and shed jobs when government subsidies are scaled back, career confidence in the defence industry remains extremely high. Our annual workforce survey shows that 84 per cent of respondents working in the sector are largely confident that the defence industry will be able to provide them with a long term career.
The Federal Government’s long term defence strategy and recent commitment to spend $270 billion over the next decade should further enhance confidence in the industry, providing a road map towards developing future workforces.
A positive industry development to have occurred throughout COVID-19 is the increased adoption of flexible working arrangements. In the longer term this will remove geographic barriers that have often impeded connecting skilled workforces with defence projects throughout different regions across Australia. More flexible working arrangements provide a conduit to ensure supply better meets demand and removes wasted energy on inefficient competition over scarce resources.
While more flexible and remote working arrangements provide opportunities for defence industry employment, the trend also presents potential challenges for organisations as it does in all industries.
As the economy returns to a greater sense of normality, the value of informal communication and collaboration within a face-to-face office setting will become increasingly apparent, and the drawbacks of remote working more obvious. Defence industry organisations will need to remain vigilant and responsive to new remote working trends, to ensure employee efficiency and satisfaction remain at optimal levels.
While long term industry growth is positive, it also poses challenges for organisations.
The competition for highly skilled defence industry workers is only set to intensify amid the projected growth, so companies will need to carefully consider their Employee Value Proposition to position themselves favourably in the employee market.
For this reason it’s vital that defence industry organisations invest in the resources and expertise to develop pathways to secure skilled workers from adjacent industries.
2021 and beyond
The Federal Government’s 2020 Force Structure Plan provides a roadmap for an unprecedented program of investment and opportunity for Australia’s defence industry.
The Government has flagged substantial new investment in cyber, autonomous systems, artificial intelligence, radar, communications, as well as space based capabilities and sensors. The plan also includes significant investments in infrastructure and supplies of deployable fuel, spare parts and stocks of advanced guided weapons, as well as scaled up funding for innovation and capability acceleration programs.
The Government says it’s committed to maximising opportunities for Australian industry to participate in the new defence projects, which support tens of thousands of jobs across the country.
As we look towards the future it's vital that the defence industry acts now to successfully position itself to effectively manage the growth period ahead.
The post-COVID world provides exciting opportunities for defence industry companies that can successfully secure and manage skilled workers in the increasingly competitive market place. As other industries stare into intimidating downturns over the next 12 months, the defence industry remains robust and set to play a pivotal role in safeguarding Australia’s future prosperity.
As an industry we can be proud of our ability to successfully navigate a difficult 2020, and confident in meeting the challenges ahead.
To assist you, at Kinexus we work with organisations to address the skills supply issues within the defence industry, as well as provide insights into skill sets and worker types available within underutilised workforces in adjacent sectors. Our team provides expert insights and advice on how to identify and attract suitable candidates, as well as successfully integrate them into enterprises.
Speak to our team of specialists today to solve your workforce challenges and ensure success in 2021 and beyond.