We are all thinking it, where did this year go? 2023 seemed to bring a mixed bag of challenges, uncertainty, and some wins. Let’s look at a review of the year from two of our management team members Simon Blake, Contract Lead, and Rob Kremer, Defence Director.
It is what has been on everyone’s minds, in everyone’s conversations and the centre of most business decisions – the Defence Strategic Review. This has caused a lot of uncertainty within industry, across all domains. After the Defence Strategic Reform Program of 2010 there was a sharp decrease in funding, and we were hoping that the changed strategic circumstances may mean that the government would not cut funding to the same extent or for such an extended period. These hopes appear to have been in vain. In 2023 there has been a noticeable slow down in demand for new workers across the defence sector, and procurement and acquisition budgets have been reduced.
There was a lot of anticipation that AUKUS would stimulate hiring, but has not transpired. Kinexus has observed a very low level of recruiting activity in industry for AUKUS as industry awaits guidance from the government on important technology, governance, and infrastructure requirements. Along with this, the surface ship review, which was born out of the DSR will not be delivered until Q1 2024, this has led to naval SMEs and primes raining in their hiring until they have more certainty of programs in the surface ship space. Overall, it feels like there is a lot of “hurry up and wait” happening across the defence industry this year.
In conjunction with DSR, we are also seeing a government-wide push to reduce the number of consultants being used, as well as the desire to grow the Australia Public Service within the Department of Defence. This is resulting in a reduction in the amount of work being tasked to Professional Service Providers, and the work that is being undertaken is experiencing higher degrees of scrutiny at all stages.
Employers are being more conservative in the selection and employment of new staff despite there being a general tightness in the availability of suitable labour. Time to fill open positions has increased dramatically and employers are being pickier with the skills and experience required, now wanting a 100% fit where previously a 70% to 80% fit was acceptable. Despite this, organisations who act quickly and decisively win the talent.
There were four notable project announcements in 2023 - LAND400 Phase 3, AIR6500, JP9102 and LAND8710, although these projects have not led to significant hiring in 2023. There has been a noticeable and increased demand for contract workers as companies manage their workforce capability in an uncertain environment.
Despite the uncertainty that DSR has caused defence industry workforce planners there was still strong hiring activity by prime contractors against funded contracts, with a number of companies hiring hundreds of predominantly white-collar workers.
In 2023 ASDs REDSPICE program picked up momentum, notably leading to the recruitment of new staff at all clearance levels in Melbourne and Brisbane. For those who don’t know REDSPICE stands for Resilience, Effects, Defence, SPace, Intelligence, Cyber and Enablers. This initiative is showing progress in growing the PV gene pool across many states in Australia.
We participated in Avalon Airshow, Indo Pacific and MilCIS this year. At Avalon, we hosted a workforce seminar that discussed 5th Generation Workforce Skills, with speakers from key industry companies. We co-hosted New Approach to Industry Skills and Workforce with the NSW Government, with speakers from the education sector, state government and HR professionals at Indo Pacific. At MilCIS, our very own Rob Kremer, presented on the CIS Workforce.
This year we launched the 9th year of TFTC – The Future Through Collaboration, a mentoring program for women in defence. This year we have over 100 participants and 14 participating organisations from all over Australia. Along with TFTC, our amazing team has released our annual Hiring Intentions and Workforce Survey document.
What is coming 2024?
So, that leads us to the big question – what do we predict is coming for 2024? Unfortunately, probably more of the same for the first six months of the year, a lot will be dictated by the Commonwealth’s ability to attract APS staff and the contents of the naval surface ship review. AUKUS will be a big influence in where the defence sector will invest in its workforces, but there is unlikely to be large scale recruitment against AUKUS pillar one or pillar two until there is greater certainty in government funding priorities.
2023 has been an interesting year for all of us, the DSR, AUKUS and the Commonwealth’s drive to grow the APS have been new challenges felt across the defence industry. Here, at Kinexus, we are looking forward to supporting both individuals and organisations make well-informed workforce decisions. Keep an eye out for the 10th edition of our Defence Industry Insights and the launch of our 10th program of TFTC. We will also be exhibiting at LandForces 2024 in Melbourne, which our team is already buzzing about!
We are looking forward to 2024, the new challenges, exciting changes and hopefully some more certainty. Here at Kinexus, we wish you happy holidays and look forward to reconnecting with you all in the new year.