Engineering for rail sector growth · 3.2.4 Reasons why organisations do not employ more graduates...

Engineering for rail sector growth

A report on engineering rail skills shortages

in Australia

Athol Yates Sponsored by the

Australasian Railway Association

National Library of Australia

Cataloguing-in-Publication entry

Yates, Athol, 1963-.

Engineering for rail sector growth: a report on engineering rail skills shortages in Australia

Bibliography

ISBN 1 86445 0002

1. Railroad engineering - Australia. I. Institution of Engineers, Australia. II. Title

625.1094

© Institution of Engineers, Australia, January 1999

All rights reserved. Other than brief extracts, no part of this publication may be produced in any form without the

written consent of the publisher. This report can be downloaded at

http://www.ieaust.org.au/government/home.htm

Steering Committee Chris Venn-Brown, Railway Technical Society of Australasia, Institution of Engineers, Australia

John Kirk, Australasian Railway Association

Malcolm Menadue, Institution of Railway Signal Engineers

Athol Yates, Policy Unit, Institution of Engineers, Australia

Researcher Athol Yates, BEng, Grad. Dip. Soviet Studies, is a Policy Analyst (Engineering) at the Institution of Engineers,

Australia. His interests include engineering, industry, environmental, transport and defence policy. He has written

a number of submissions to Federal Government inquiries, working papers and books. The Institution of

Engineers, Australia represents 63,000 members of the engineering profession across all disciplines of

engineering.

For information The Institution of Engineers, Australia

11 National Circuit

Barton ACT 2600

tel 02 6270 6547

fax 02 6273 2257

email [email protected]

www http://www.engineersaustralia.org.au

Abstract Australia is currently experiencing a shortage of railway engineers in several specialisations. The shortage is

expanding rapidly and unless addressed, it will affect completion dates and the profitability of future Australian rail

projects.

The reasons why the shortage will become more pronounced include:

• the aging of the workforce,

• the reduction in new graduate employment,

• a lack of opportunities for railway engineers to gain the new skills required to work with the rapidly

changing rail technology, and

• the continual overseas demand for Australian railway engineers due to a world-wide shortage and the

large number of rail construction projects in Asia continuing despite the financial crisis.

Qualitative evidence which points to a future shortage is provided by the:

• the views of rail organisations,

• the structure of the workforce and their intentions, and

• the restructuring of the rail sector.

The most acute shortages of railway engineering specialisations are signalling and communications, rolling stock,

and track and structures. Localised shortages are occurring in the areas of train control, data handling and on-

board electronics, noise and vibration, overhead line design, and rail logistics.

Despite the shortage being recognised by rail sector organisations, very few are taking substantial action to

address it. This is surprising as organisations can undertake several initiatives which are effective in both

reducing specialist staff turnover and attracting experienced rail engineering staff. However these actions do not

address the underlying reasons for shortages. The most effective actions to ensure the availability of a pool of

skilled engineers in the long-term is the development of a rail-wide sector strategy to eliminate skills shortages.

All players, including industry, government, professional associations and tertiary institutions, must be involved in

the development of the strategy.

As all rail organisations will benefit from reducing the skills shortage in the long-term, all organisations in the

sector should bear the cost of the strategy to eliminate the shortage. Otherwise some organisations will be at a

competitive advantage as they will not bear training and development costs, yet will have access to a pool of

skilled engineers. In addition, as engineers gain personally from improving their skills level, individuals should

contribute to the cost of their training.

The three principal recommendations from this report are that:

• individual rail engineers consider the future skills needs of the Australian rail sector and gain the

necessary skills required to work with the new, rapidly changing rail technology.

• each rail organisation examines the implications of the skills shortages and introduces initiatives to

mitigate them.

• a rail sector-wide strategy be developed to eliminate future skills shortages. The strategy should be

developed by representatives from industry, government, professional associations and education providers.

Table of Contents Executive Summary 1 Recommendations 2 1 Introduction 3 1.1 Definitions 3 1.2 Study process 4 1.2.1 Stage 1: Problem definition 5 1.2.2 Stage 2: Data collection 6 1.2.3 Stage 3: Data analysis 7 1.2.4 Stage 4: Validate analysis 7 2 Rail sector engineering employment 8 2.1 Calculating the number of the professional railway engineers 8 2.2 Calculating the number of the railway technologists 8 2.3 Adjusting the number of engineers and technologists based on self assessment 9 3 Profile of rail engineers and technologists 10 3.1 All engineering staff 10 3.1.1 Age 10 3.1.2 Sector of employment 10 3.1.3 Work responsibilities 11 3.1.4 Engineering specialisations 11 3.1.5 Consultants 11 3.1.6 Part time employment 11 3.2 Graduates 12 3.2.1 Mentoring of graduates 12 3.2.2 Graduate formal training programs 12 3.2.3 Adequacy of graduate education 12 3.2.4 Reasons why organisations do not employ more graduates 13 3.2.5 Ways to encourage organisations to employ more graduates 13 3.3 Comparing the work of engineering technologists with professional engineers 13 4 Changes in industry composition 14 4.1 Public sector downsizing and private sector growth 14 4.2 Decreasing graduate employment 15 5 Formal training in the rail sector 17 5.1 Data on education undertaking and engineering occupation 18 5.1.1 Data on engineers undertaking formal education and the belief that the engineer does not have the skills

their organisation requires 18 5.1.2 Data on engineers undertaking education and the expectation that the engineer will remain in the rail

industry for longer than 5 years 19 5.1.3 Data of education undertaking and the sector engineers work in 19 5.1.4 Data on planning to retire and perception of skills 20 5.1.5 Scatterplot of education undertaking and the age of engineers 20 5.2 Statistical Inference 20 6 Employment mobility 22 6.1 Length of employment for engineers 22 6.2 Reason for changing employers 23 6.3 Experienced engineers moving into the rail sector from other sectors 24 6.3.1 Training upon joining the rail sector 25 6.3.2 Engineers from other sectors and their productivity compared with experienced rail engineers 26 7 Employment intentions of engineers 27 7.2 Retirement 28

8 Organisations views on skill shortages 29 8.1 Engineering specialisations where shortages will occur 29 8.2 Engineering specialisations required for new projects 29 8.3 Staff turnover 30 8.4 Obtaining engineering staff for large projects 30 8.5 Obtaining engineering staff for large projects 30 9 Foreign trained engineers 31 9.1 Sponsored foreign engineers 31 9.2 Future sponsoring of foreign engineers 31 9.3 Organisations experience with foreign trained engineers 31 10 Retired and former rail engineers 33 10.1 Details of former rail engineers now working in another sector 33 11 Modelling the industry 35 11.1 Rail engineering labour supply model 35 11.1.1 Graduates 36 11.1.2 Technologists who have upgraded their skills 36 11.1.3 Foreign rail engineers on working visas 36 11.1.4 Immigrant rail engineers 36 11.1.5 Australian rail engineers returning to Australia 36 11.1.6 Former rail engineers who can re-enter the rail sector 36 11.1.7 Experienced rail engineers who are working in rail sector organisations on non-rail projects

37 11.1.8 Non-rail industry experienced engineers 37 11.1.9 Move into non-engineering management in the rail sector 37 11.1.10 Retirement 37 11.1.11 Death and permanent disability 37 11.1.12 Move into another industry sector 37 11.1.13 Australian rail engineers moving overseas 37 11.1.14 Engineers changing employers within the rail sector 38 11.1.15 Summary of statistics 38 11.2 Rail engineering occupational demand 38 11.2.1 Employment generated from rail construction projects 38 11.2.2 Employment generated from railway equipment manufacturing projects 40 11.3 Occupational demand for rail projects 41 11.4 Employment situation for signalling and communications, and rolling stock 42 12 Organisation's views on addressing the skills shortage 43 13 Options for addressing the skills shortage 44 13.1 Short term actions 44 13.1.1 Reducing the number of engineers who move into another industry sector 44 13.1.2 Reducing the number of engineers who move into non-engineering management in the rail sector 45 13.1.3 Attracting former rail engineers who now work in another sector 45 13.1.4 Redeploying experienced rail engineers who are working in rail sector organisations on non-rail

projects 45 13.1.5 Retaining engineers who would otherwise take early retirement 45 13.1.6 Increasing the number of foreign engineers sponsored by organisations to work in Australia

45 13.1.7 Increasing the number of experienced engineers employed from other sectors in the rail sector

46 13.2 Long term actions 46 13.2.1 Increasing the number of graduates in the rail sector 46 13.2.2 Increasing the number of technologists who upgrade their skills each year 46 13.3 Rail sector-wide strategy 47 14 Conclusion 48

Appendices Appendix 1 Bibliography A2 Appendix 2 Survey form for individual rail professionals A3 Appendix 3 Survey results for individual rail professionals A7 Appendix 4 Survey form for rail organisations A16 Appendix 5 Survey results for rail organisations A27 Appendix 6 List of rail sector organisations and their capabilities A37 Appendix 7 Calculating the size of the rail sector and number of railway engineers A41 Appendix 8 Current and proposed Australian rail projects and Australian rail construction data

A43 Appendix 9 Current and proposed South East Asian rail projects A46 Appendix 10 Rail construction in the US A48 Appendix 11 Employer sponsored visas for professional engineers A49

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 1

Executive Summary Australia is currently experiencing a shortage of railway engineers in several specialisations. The shortages are growing and unless addressed, completion dates and the profitability of future Australian rail projects will be affected. The reasons why the shortage will become more pronounced include: • the aging of the workforce, • the reduction in new graduate employment, • a lack of opportunities for railway engineers to gain the necessary skills required to work with the

new, rapidly changing rail technology, and • the continual overseas demand for Australian railway engineers due to a world-wide shortage and

the large number of rail construction projects in Asia continuing despite the financial crisis. Quantitative and qualitative evidence which illustrates the current and future shortage of railway engineers are grouped into the three headings below. The views of rail organisations Many organisations believe that a shortage already exists and will worsen in the future. Surveys of rail organisations concluded that: • 34% of organisations are currently experiencing difficulty in recruiting professional engineering

staff, • 47% of organisations consider that there will be shortage within 5 years, • 52% of organisations consider that there will be a shortage in between 5 and 10 years, and • 19% of organisations are currently considering sponsoring foreign engineers to work in Australia

as a means of overcoming skills shortages. The structure of the workforce and employee intentions Workforce structure and employee intentions indicate that the number of rail engineers leaving the sector will be greater than the number joining it in the short and medium terms. Surveys of railway engineers concluded that: • the median age of railway engineers is increasing three times faster than that of the rest of the

workforce, • 62% of railway engineers expect to leave the rail industry within 10 years, and • the number of graduates entering the rail sector is declining. The restructuring of the rail sector The restructuring of the rail sector indicates that there are structural impediments which limit private sector rail organisations from either completely re-employing displaced public sector engineers or hiring in-experienced graduate engineers. Research supporting this includes that: • 36% of rail engineers who leave the public sector are not re-employed by the private sector, • market instability is resulting in rail organisations taking a conservative position on staff hiring

and training, resulting in reduced numbers of new entrants to the rail sector, and • as many rail consultancies are limited in their ability to take on recently graduated staff, these

organisations (which are becoming more common in the rail sector) are unable to generate new skilled rail engineers.

The most acute shortages of railway engineering specialisations are in signalling and communications, rolling stock, and track and structures. Localised shortages are occurring in the areas of train control, data handling and on-board electronics, noise and vibration, overhead line design, and rail logistics.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 2 The size and impact of the shortage of engineers is dependant on the rate of increase of rail engineering work in Australia. The occupational demand model developed in this report indicates that an increase of 34% over one year will cause only localised shortages, as rail organisations will be able to redeploy existing staff and attract former rail engineers back to the rail sector to deal with the additional work. However an increase greater than 34% over one year or continual high growth will result in significant and widespread shortages of experienced rail engineers. Despite the shortage being recognised by rail sector organisations, very few are taking substantial action to address it. This is surprising as organisations can undertake several initiatives which are effective in both reducing specialist staff turnover and attracting experienced rail engineering staff. A labour supply model for rail engineers identifies the most effective actions including: • reducing the number of engineers who move into another industry sector, • reducing the number of engineers who move into non-engineering management in the rail sector, • attracting former rail engineers who now work in another sector, • redeploying experienced rail engineers who are working in rail sector organisations on non-rail

projects, and • retaining engineers who would otherwise take early retirement. However, these actions do not address the underlying reasons for shortages. The most effective actions to ensure the availability of a pool of skilled engineers in the long-term are: • increasing the number of graduates in the rail sector, • increasing the number of experienced engineers employed from other sectors in the rail sector, and • increasing the number of railway engineering technologists who upgrade their qualifications and

skills to that of railway engineers each year. As all rail organisations will benefit from having access to a sufficient pool of skilled engineers in the long-term, all organisations in the sector should bear the cost of any strategies to eliminate the shortage. Otherwise some organisations will be at a competitive advantage as they will not bear training and development costs, yet will have access to a pool of skilled engineers. Therefore a rail sector-wide strategy is required. All players must be involved in the development of the strategy, including industry, government, professional associations and education providers. In addition, as engineers gain personally from improving their skills level, individuals should contribute to the cost of their training.

Recommendations The three principal recommendations from this report are: Recommendation 1 It is recommended that individual rail engineers consider the future skills needs of the Australian rail sector and gain the necessary skills required to work with the new, rapidly changing rail technology. Recommendation 2 It is recommended that each rail organisation examines the implications of the skills shortages and introduces initiatives to mitigate them. Recommendation 3 It is recommended that a rail sector-wide strategy be developed to eliminate future skills shortages. The strategy should be developed by representatives from industry, government, professional associations and education providers.


1 Introduction This report examines the skills market for professional engineers and engineering technologists in the Australian rail sector. The purpose of the study is to identify whether or not there will be a shortage and suggest ways to overcome any identified problems. The principal reason for undertaking the study was concern about a potential skills shortage. This concern was raised by the Institution of Engineers, Australia (IEAust) National Committee on Railway Engineering (now the Railway Technical Society of Australasia) and was reinforced by a meeting on industry training needs organised by the Australasian Railway Association on 10 March 1998. This study complements a recent project undertaken by the IEAust into the new training environment in the water, road and electricity sectors.1 The study's steering committee comprised: • Chris Venn-Brown, IEAust Railway Technical Society of Australasia, • John Kirk, Australasian Railway Association, • Malcolm Menadue, Institution of Railway Signal Engineers, and • Athol Yates, IEAust Public Policy Unit. Consultations and contributions were also made by: • Tony Moleta, Department of Transport & Regional Services, • Nerdia Coulter, Department of Education, Training and Youth Affairs, • Dave Hassall, Rail Track Association, • Mike Hickey, Permanent Way Institute, NSW, • Warren Hocking, Australian Railway Industry Corporation, and • Evan Tully, Department of Industry, Science and Resources.

1.1 Definitions A professional railway engineer is a person who has graduated from a university engineering faculty and has one or more railway engineer specialities. A railway engineering technologist is a person who has graduated with an engineering diploma or Bachelor of Technology and has one or more railway engineer specialities. A graduate railway engineer is a professional engineer who has gained their degree within the last 5 years. The railway engineering specialisations are: • power supply for electric traction (railway power supply design, specification, manufacture,

installation, operations and maintenance), • rolling stock (design, specification, manufacture, operations, maintenance), • signalling and communications (signal design, specification, manufacture, installation,

maintenance, operations & communications systems design, specification, manufacture, installation, maintenance, operations),

• terminals (freight terminal design, operation & passenger terminal design & operation), • track and structures (track design, manufacture, construction, maintenance, pointwork design,

manufacture, construction, maintenance; structures design, manufacture, construction, maintenance),

• train control and operations (train control systems, train systems, train handling), • workshops (railway workshop design, specification, operations, plant maintenance),

1 Reeder, Lynne, 1998, Engineering Training Opportunities into the Future: An examination of the recent workplace reforms and their impact on future training opportunities in the water, electricity and road sectors, Higher Education Division, Department of Employment, Education, Training and Youth Affairs, Canberra.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 4 • railway planning and economics (transportation economics & planning), and • business liaison and management (customer liaison, traffic planning, general management). These specialisations are defined in the IEAust Railway Engineering Competency Profiles. The rail sector is made up of the following broad groups: • track owners, • operators, • rolling stock manufacture & maintenance organisations, • track construction & maintenance organisations, • signals & communications manufacture & maintenance organisations, • general product & service suppliers, • research (technical & non-technical) organisations, • education & training organisations, • regulators, • policy development organisations, • industry, professional & employee associations, • customers (freight & passengers), and • other organisations (eg rail media, user groups). For the purposes of the statistical analysis, the rail sector was divided into three rail sector categories. The dividing lines between each rail sector category are artificial because a number of organisations span more than one component. However the first two components are used by Australian Bureau of Statistics,2 so consistent data on them has been gathered which allows reliable time-series comparisons to be made. The rail sector categories are: • rail transport; includes organisations involved in the movement of rail traffic, such as the public

transport agencies and private rail operators, • rail equipment manufacturing; includes both equipment manufacturers and suppliers whose main

business is in the rail industry, • rail support services; includes organisations and parts of organisation which provide services to

the rail industry as well as other industries. These organisations include civil consulting firms, electrical contractors and rail policy units within government.

A skills shortage exists when employers have difficulty filling vacancies in a specialisation at reasonable levels of pay, conditions and locations. Shortages are typically for specialised and experienced workers, and can exist at the same time as high unemployment. Shortages may be numerically small, or in specific geographical areas. Skills shortages may arise for a number of reasons including: • deficiencies in the education and training system, • economic and demographic change, • people not completing their training, • qualified workers not working in the field of their formal qualifications and/or experience, • cyclical fluctuations in labour demand, • the demands of new technology, • lack of flexibility in wages, and • regional mismatches. Fluctuations in labour demand discourage skill formation and encourages wastage as workers shift to better opportunities in faster growing industries and occupations.

1.2 Study process The study process had four main stages: problem definition, data collection, data analysis and validation of analysis by industry. Only the most important elements in each stage are discussed in this section; the relevant information for each element can be identified in the references in Table 1. 2 The two categories are ANZSIC 6200 Railway transport and 2823 Railway equipment manufacturing.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 5 Stage Important elements

Stage 1: Problem definition • Define railway engineer, rail sector & employment terms (eg skills shortage) (Section 1.1)

• Identify the best ways to assess whether a skills shortage exists (Section 1.2.1)

• Develop a model of rail engineering labour supply (Section 11.1)

• Develop a model of rail engineering occupational demand (Section 11.2)

• Identify rail sector organisations (Appendix 6)

Stage 2: Data collection • Collect statistics from the ABS, DEETYA, and other Federal and State government agencies and private sector organisations

• Survey rail companies and current and past railway engineers (Appendix 2, 3, 4 & 5)

Stage 3: Data analysis • Define the characteristics of engineering staff in the rail sector (Section 3)

• Define the employment characteristics of the rail sector (Section 4)

• Use these characteristics and other information to construct models of rail engineering skill supply and occupational demand (Section 11)

• Develop options for addressing the skills shortage (Section 13)

• Prepare draft report, including recommendations

Stage 4: Validate analysis • Disseminate draft report

• Modify draft report

• Publish & distribute final report

Table 1: The four stages to the rail engineering employment study. 1.2.1 Stage 1: Problem definition The first step in problem definition involved defining a railway engineer, the rail sector and employment terms (eg skills shortage). These are listed in Section 1.1. The second step involved identifying the best ways to assess whether a skills shortage exists. There are a number of methods of identifying and quantifying a skills shortage. The main methods are listed in the publication, Skills in Australia - Trends and Shortages, published by the Department of Employment, Education, Training and Youth Affairs.3 Methods used by DEWRSB include: • examining trends in the monthly Skilled Vacancy Survey, published by the Department of

Employment, Workplace Relations and Small Business (DEWRSB), • a count of skilled job advertisements in newspapers, • discussions with employer/industry and employee/professional organisations, educational and

training institutions and Industry Training Advisory Boards, • direct contact with employers, especially those employers who have recently advertised, with a

focus on identifying skills and specialisations that are difficult to recruit. Employers are asked if they have successfully filled vacancies; how long it took to fill vacancies, and whether the skills of applicants were suitable,

• examining Australian Bureau of Statistics labour force survey data on employment, unemployment rates, age group, earnings and hours worked by occupations,

• investigating labour supply (formal training arrangements, immigration, informal supply, wastage, barriers to entry),

• investigating occupational demand (the causes of demand, prospective employment trends, industry employment growth, hard to fill vacancies), and

• examining higher education enrolments and completions by disciplines via Graduate Careers Council of Australia data on graduate employment outcomes.

Unfortunately, the lack of existing data on the number of rail engineers and the small size of the sector made several of the above methods impractical. For example, the Skilled Vacancy Survey does not cover rail engineers due to its small size, the very small number of job advertisements for rail engineers would not provide any statically significant information, and labour force survey data from the Australian Bureau of Statistics (ABS) was no use as it provided no data on rail engineers as there is no Australian Standard Classification of Occupations (ASCO) group for rail engineers. combination of methods were used to collect the data and this is listed in Section 1.2.2. 3 Department of Employment, Education, Training and Youth Affairs, 1998, Skills in Australia-Trends and Shortages, Canberra, pp. 4.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 6 The third stage involved developing a model of rail engineering labour supply. This stocks and flow labour model (Figure 1) identifies the sources of engineers flowing into and out of the rail sector. The model provided the practical framework for identifying the data which needed to be collected. Various methods of quantifying each of the sources were examined and the fields of data collected in Section 1.2.2 was the result.

* Graduate) * Technologists who have upgraded their skills * Foreign rail engineers on working visas * Immigrant rail engineers * Australian rail engineers returning home * Former rail sector engineers * Experienced rail engineers who are working in rail sector organisations on non-rail projects * Non-rail sector engineers

Inflows

Outflows

Rail sector

Outflows

* Move into non-engineering management in the rail sector * Retirement * Death and disability * Move into another sector * Australian rail engineers smoving overseas

* rail transport * rail equipment manufacturing * rail support services

Figure 1: A stocks and flow model of the rail engineering labour supply. The final step involved identifying the rail sector organisations in Australia. This list is contained in Appendix 6. 1.2.2 Stage 2: Data collection Data was collected via three methods. Firstly, data on the number of professional engineers and engineering technologists (defined by Australian Standard Classification of Occupations codes) in the rail transport and rail equipment manufacturing sectors (defined by the Australian and New Zealand Standard Industrial Classification code) was obtained for the 1986, 1991 and 1996 Censuses. Secondly, a 4-page survey for individual rail professionals was sent to 1,300 current and former railway engineers who had been identified as being members of the Institution of Railway Signal Engineers, members of the Institution of Engineers who had expressed an interest in railway engineering, and employees of railway industry organisations. To minimise any sampling frame bias caused by targeting just members of professional associations, the survey was also sent to the Managing Director of all 220 organisations in the railway industry asking that it be passed on to their engineers. To minimise any voluntary response bias, the surveys were accompanied by a reply paid envelope and, most importantly, an offer that every person who returned the survey would get a free copy of the report. A total of 479 completed surveys were received, which represents between 30% and 100% of engineers in about 140 organisations. Of the 479, 57 were from former rail engineers now working in other sectors and 37 were from retired rail engineers. The survey and its results are contained in Appendix 2 and 3. Thirdly, a 11-page survey for rail organisations was sent out to 220 organisations in the rail sector. A total of 55 completed surveys were received, which represents 26% of the population. The survey and its results are contained in Appendix 4 and 5.


1.2.3 Stage 3: Data analysis The analysis of the data is included in Sections 3 and 4. This information is used to quantify the sources of engineers flowing into and out of the rail engineering skill supply stocks and flow labour model in Section 11. A rail engineering occupational demand model was also developed in Section 11. The purpose of these models is to approximate the rail engineer labour market and identify the impact on the labour market as a result of specific action, such as an increase in rail projects or training more engineers. Based on the results of Section 11, it was possible to determine if there would be a shortage. By identifying the dominating input or output sources of engineers in the rail engineering labour model, it was possible to develop a range of effective options for addressing the skills shortage (Section 13). 1.2.4 Stage 4: Validate analysis The draft report was circulated for comment to the members of the steering committee, the contributors mentioned in Section 1, and selected members of the IEAust Railway Technical Society of Australasia. A total of 42 individuals received the draft report. In addition, the draft findings of the report were presented at the Conference on Railway Engineering on 9 September 1998. A number of suggestions for improvements were received and these were incorporated into the final report.


2 Rail sector engineering employment

2.1 Calculating the number of the professional railway engineers Three methods were used to calculate the number of railway engineers. All provided substantially different results because the calculations depended on how the term engineer was defined and on which organisations were included in the three rail sector categories (rail transport, rail equipment manufacturing and rail support services). It is worth noting that the employment trends are the most significant facts in this study. Consequently the absolute number of engineers in the rail sector is not of critical importance, and its estimated size should be treated only an approximation. The first method used to calculate the number of engineers was the 1991 and 1996 Census figures which provides figures on the rail transport and rail equipment manufacturing categories. Using survey data provided by individual engineers, the third category, rail support services, can be calculated by comparing it with ABS information for the other two categories. The second method used survey data provided by the rail organisations and individual engineers. It involved calculating the percentage of engineers within each component of the rail sector who participated in the study. The third method used survey data provided by individual engineers and rail organisations. It involved calculating the survey response rate of engineers in individual companies and then applying that factor to all engineers who participated in the survey. Table 2 provides a summary of the number of professional engineers in the rail sector based on the three methods. Due to different definitions of engineers and inaccuracies in survey data, this figure should be treated as indicative only. The large variability in the size of the engineering workforce calculated by each method can also be seen in the large variability in estimates of the total number of employees in each rail component. See Appendix 7 which details the calculations used in each method.

Rail sector component

Method 1 (Census)

Method 2 (Survey responses)

Method 3 (Survey responses)

Indicative number of engineers

Rail transport 336 758 435 500

Rail equipment manufacturing

130 243 211 200

Rail sector services 115 546 188 300

Indicative number of professional engineers in the rail sector 1000

Table 2: Number of professional engineers in the rail sector analysed by three methods

2.2 Calculating the number of the railway technologists To calculate the number of railway engineering technologists, 1996 Census statistics were used. Table 3 presents the results.

Formal qualification Rail transport Rail equipment manufacturing

Number with a diploma 108 69

Number with a degree 309 125

Percentage of diploma with degree holders 35% 55%

Average percentage of first 2 categories 45%

Table 3: Number of engineering technologists in the rail sector

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 9 Assuming that there are 1000 professional engineers in the rail sector, then the number of engineering technologists is 450.

2.3 Adjusting the number of engineers and technologists based on self assessment

If individuals' descriptions of themselves as engineers and technologists are used with no reference to their formal qualification, then the number of people in these two groups increases substantially. Table 4 uses results from the last 3 Censuses while Table 5 uses results from the survey of individual rail engineers to identify the number of engineers claiming to be professional engineers and the number with an engineering degree.

Rail sector component 1996 1991 1986

Rail transport Total number in occupational category of engineer & engineering manager

349 904 1469

Those with degree & above 231 462 638

% of occupation having degree & above 66.2% 51.1% 43.4%

Rail equipment manufacturing Total number in occupational category of engineer & engineering manager

156 171 193



Combined rail equipment manufacturing and rail transport

Total number in occupational category of engineer & engineering manager

505 1075 1662



Table 4: The number of professional engineers with and without degrees based on Census information Results from the survey of individual rail engineers Number

Total number of survey respondents who call themselves professional engineers

374

Total number with a degree or above 313

% having degree & above 84%

Table 5: The number of professional engineers with and without degrees based on survey information

Table 4 indicates that the average percentage of self-assessed professional engineers with a degree is about 62% in 1996. Table 5, however, indicates that the average percentage of self-assessed professional engineers with a degree is about 84%. Taking the average of 73%, then the total number of people claiming to be professional railway engineers is 1000 multiplied by 1.27, ie 1270. If the same analysis is undertaken for engineering technologists, then the total number of people claiming to be engineering technologists is 450 multiplied by 1.53, ie 735. Table 6 summarises the number of professional engineers and engineering technologists based on qualifications and on self-assessment.

Engineer class Based on qualifications

Based on

self-assessment

Professional engineers 1000 1270

Engineering technologists 450 684

Table 6: Indicative number of professional engineers and engineering technologists based on qualifications and on self-assessment


3 Profile of rail engineers and technologists This section provides a profile of rail engineers and technologists derived from the survey of individuals and organisations.

3.1 All engineering staff

3.1.1 Age The median age of all engineering staff who responded to the survey was 43.6 years. (The mean (average) was 43.1.) The median age of public sector engineers is 0.9 years older than private sector engineers. Notably the median age of self-employed consultants (N= 47) was 52.3 years, which is 8.7 years older than the median age for all engineers. Based on the 1991 and 1996 Censuses, the median age is increasing by 0.9 years per year. The means that the median age of railway engineers is increasing at 3 times the rate of the entire Australian workforce as it is increasing at 0.3 year per year for the entire Australian workforce. Professional engineer sub-groups Median Age

Self-employed consultants 52.3

Private sector 43.0

Public sector 43.9

All engineers 43.6

Table 7: Median age for professional engineers based on the survey of individual rail engineers Graph 1 contains the age profile of survey respondents.

Age profile of professional rail engineers

0

2

4

68

10

12

14

16

18

20

19-25

26-30

31-35

36-40

41-45

46-50

51-55

56-60

61-65

66-75

Age

Percentage

Graph 1: Age profile of surveyed engineers 3.1.2 Sector of employment Most engineers work in the private sector (54%). About 43% of engineers work in the public sector (including corporatised bodies).


3.1.3 Work responsibilities Table 8 reveals that the most common main work responsibilities of rail engineers are engineering management, project management and product and system design. (These three responsibilities are also the top three for the entire Australian engineering workforce, which was revealed in a 1998 survey of the membership of the IEAust.) A number of respondents nominated additional responsibilities including customer support, training, safety management and compliance, maintenance and business development. Category N=418 Percentage

Engineering management 33%

Project management 28%

Product & system design 22%

Studies & investigations 19%

Installation & maintenance 13%

Contract administration 11%

Planning 9%

Research & development 7%

Non-engineering management 5%

Manufacture & production 4%

Operations 3%

Marketing & sales 2%

Customer support 1%

Training 1%

Table 8: Main work responsibilities for engineering staff 3.1.4 Engineering specialisations Table 9 lists rail specialisations and the percentage of engineers who claim to work in that area. The two main rail specialisations as identified by both individual engineers and organisations are signalling and communications, and track and structures. Several respondents also identified safety as their main specialisation.

Specialisation Percentage (individuals) N=418

Percentage (organisations)

N=40

Signalling & communications 30% 27%

Track & structures 30% 15%

Rolling stock 25% 16%

Planning & economics 6% 9%

Power supply for electric traction 5% 2%

Train control & operations 5% 7%

Workshop 4% 2%

Terminals 1% 1%

Other 8% 18%

Table 9: Engineering specialisations as identified by individual engineers and organisations 3.1.5 Consultants The survey revealed that about 48 of the respondents are self-employed consultants. This translates to 11% of the workforce. (This result is supported by a 1998 survey of the membership of the IEAust which revealed that 13% of engineers were self-employed consultants.) 3.1.6 Part time employment About 15% of rail organisations (N=47) stated that they employed part-time engineers.


3.2 Graduates Graduate engineers entering the rail sector can be divided into two groups; cadet engineers and direct-from-university graduates. Cadet engineers are usually taken on when they are at university and work at the organisation during their vacation periods. Based on the survey results, about 50% of graduate engineers entering the rail sector were employed through cadetships. Between 1994 and 1997, 66% of cadetships were provided by the private sector. Table 10 shows the graduates' discipline.

Category Percentage N=38

Electrical 37%

Mechanical 34%

Civil 23%

Computer 3%

Manufacturing systems 3%

Table 10: Engineering discipline of graduates 3.2.1 Mentoring of graduates Table 11 indicates that 16% of graduates have an official mentor while 65% of organisations consider that they provide formal or informal mentors. The considerable difference between the two indicates either that the organisations' opinions do not reflect reality or else that organisations rely heavily on informal mentoring.

Answer Response from graduates to the question "do you have an official mentor in your organisation?"

N=38

Response from organisations to the question "does your organisation provide mentors

formally or informally for the newly qualified engineering staff?" N=42

Yes 16% 65%

No 84% 35%

Table 11: Official mentor programs in organisations 3.2.2 Graduate formal training programs Table 12 indicates that 29% of graduates state that their organisations provide a formal graduate training program while 19% of organisations consider that they provide them.

Answer Response from graduates to the question " does your organisation offer a formal graduate training

program?" N=38

Response from organisations to the question "does your organisation offer a formal graduate

training program for the newly qualified engineering staff?" N=42

Yes 29% 19%

No 71% 81%

Table 12: Formal graduate training programs 3.2.3 Adequacy of graduate education About 57% of organisations consider the education of newly qualified engineering staff as adequate, and 43% consider it inadequate. The reasons why the education was considered inadequate by organisations included: • there is no exposure to the rail industry until they commence employment, • there is insufficient systems engineering and systems/network design skills taught in fourth year, • no practical work experience, • knowledge is too broad and not specific to rail, and • it fails to provide a commercial background.


3.2.4 Reasons why organisations do not employ more graduates Table 13 shows that the main reason why organisations do not employ more graduates is because there is insufficient work available. The second most common reason given was because the training period for graduates is too long. One organisation wrote that the problem was that consultancies require only experienced staff and cannot take on staff who are still learning. Reasons for not employing more newly qualified engineering staff

N=37 Percentage

Not sufficient work 68%

Training period of the newly qualified staff is too long 34%

Do not have the staff to supervise the newly qualified staff 22%

Other 19%

Table 13: Reasons why organisations do not employ more graduates 3.2.5 Ways to encourage organisations to employ more graduates Table 14 shows that the major impediment to employing more graduates is market instability, followed by the inability to employ graduates on short term contracts via mechanisms such as Group Training Schemes. Other impediments included that it is difficult to attract suitable graduates, and graduates are not interested in part-time work.

Ways to encourage the organisation to employ more newly qualified engineering staff N=31

Percentage

Greater market stability 61%

Ability to employ graduates on short-term contracts 26%

Improved university education 22%

Wage subsidy 16%

Other 1%

Table 14: Ways to encourage organisations to employ more graduates

3.3 Comparing the work of engineering technologists with professional engineers

Table 15 and 16 provide views of the similarity of work between engineering technologists and professional engineers, and the substitution of technologists for engineers.

Within your organisation, is the work of engineering technologists and professional engineers more similar than it was

10 years ago?

Yes No

Opinion of professional engineers and engineering technologists N=173

56% 42%

Opinion of engineering technologists N=29 55% 45%

Opinion of organisations N=36 56% 44%

Table 15: Similarity of work between engineering technologists and professional engineers Are engineering technologists currently filling positions that only

professional engineers filled a decade ago? Yes No

Opinion of professional engineers and engineering technologists N=169

51% 47%

Opinion of engineering technologists N=32 44% 56%

Opinion of organisations N=40 17% 67%

Table 16: Substitution of engineering technologists for professional engineers It is interesting to note that about 56% of all engineers, technologists and organisations consider that the work of engineering technologists and professional engineers is now more similar than it was a decade ago. This may indicate that in some areas the work is more similar and in others not, but this difference is hidden because of the averaging of the statistics.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 15 Table 16 indicates that 51% of engineers consider that engineering technologists are currently filling positions that only professional engineers filled a decade ago. Technologists are slightly less likely to believe this, while only 17% of organisations believe it.


4 Changes in industry composition The Australian rail sector has undergone considerable change since the mid 1980s. The two major trends are the related public sector downsizing and private sector growth, and decreasing graduate employment.

4.1 Public sector downsizing and private sector growth In 1997, about 43% of railway engineers were employed by the private sector. Graph 2 indicates that since 1990, the public sector has been loosing engineers five times the rate that it is employing engineers. It is interesting to note the increasing divergence of the entering and leaving lines in the graph. As the graph is based on a sample of all rail engineers, the real figures are at least double those in the graph.

Railway engineers entering and leaving the the public sector

0

5

10

15

20

25

Year

Number of engineersentering the publicsectorNumber of engineersleaving the public sector

(Note that these results present a trend and the absolute number of engineers entering and leaving the sector is about double the number in the graph.)

Graph 2: Railway engineers entering and leaving the public sector About 64% of engineers who leave the public sector are re-employed by the private sector. This is illustrated in Graph 3. It is interesting to note the divergence of the lines since 1994 which may indicate that former public sector engineers are retiring, leaving the rail sector or becoming unemployed.


Public sector railway engineers leaving the public sector and entering the private sector

0

5

10

15

20

25

Year

Number of engineersleaving the public sector

Number of former publicsector engineer entering theprivate sector

Graph 3: Public sector railway engineers leaving the public sector and entering the private sector

4.2 Decreasing graduate employment The number of new graduate engineers being employed in the rail sector is decreasing as illustrated in Graph 4. As the graph is based on a sample of all rail engineers, the real figures are at least double those in the graph.

Survey trends of graduate employment

0

2

4

6

8

10

12

14

16

1993 1994 1995 1996 1997

Year

New graduates employed(survey of engineers)New graduates employed(survey of organisations)

Graph 4: Graduate employment data 1993-1997 68 percent of organisations surveyed (N=15) were able to provide some data on the number of graduate engineers they would employ up to 2003. Of these, only 32% were able to give a yearly prediction. This data is presented in Graph 5. This graph reveals that graduate employment is not expected to grow significantly from the existing levels over the next 5 years.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 18 32% of surveyed organisations stated that they were unable to predict the number of new graduates they would hire in the year of the survey. About 50% of organisations were unable to predict the number of new graduates they would hire in 2003.

Number of recently graduated engineers employed or will be employed by the organisations which provided data for the

full five years (N=7)

0

10

20

30

40

50

60

1993 1997 1998 1999 2003

Year

Graph 5: Graduate employment data 1993-2003 based on data from the survey of rail organisations


5 Formal training in the rail sector The five main reasons why engineers undertake formal training are presented in Figure 2.

Is there a relationship

between railway

engineers undertaking

formal training and ... ?

whether they are a professional engineer, recently graduate

engineer or engineering technologist

the belief that they do not have the skills their

organisation requires

the expectation that they will leave the rail industry

within 5 years

whether they work in the private or public

their age

Figure 2: The potential relationship between rail engineers undertaking formal training and several factors The survey of individual rail engineers indicated that 20% of all engineers and technologists are currently undertaking formal education. This is illustrated in Graph 6.

Engineers undertaking education

Undertakingformal trainingNot undertakingformal training

Graph 6: A pie chart illustrating the percentage of engineers undertaking education


5.1 Data on education undertaking and engineering occupation Table 17 contains data on the percentage of engineers undertaking formal education broken down by their engineering occupation. Graph 7 presents the proportion of each engineering occupation undertaking formal education. An average of 20% of professional engineers are undertaking formal training, 27% of recent graduates and 14% of engineering technologists.

Occupation Undertaking formal training

Not undertaking formal training

Totals

Professional engineers 64 (20%) 257 321

Recent graduates 10 (27%) 27 37

Engineering technologists 6 (14%) 36 42

Total 80 (20%) 320 400

Table 17: Engineers undertaking education and engineering occupation

Percentage of each engineering occupation undertaking formal

education

0

5

10

15

20

25

30

Engineering occupation

Graph 7: The proportion of each engineering occupation undertaking formal education. 5.1.1 Data on engineers undertaking formal education and the belief that the

engineer does not have the skills their organisation requires Table 18 reveals that 92% of professional engineers believe that they have the skills needed by their organisation. Several respondents said that they did not know what their organisation wanted.

Do you think you have the skills your company needs

in the future N=363

Professional engineers

Recent graduates Engineering technologists

Total

Yes 294 (92%) 4 (80%) 33 (89%) 331 (92%)

No 27 1 4 32

Total 321 5 37 363

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 21 Table 18: Relationship between engineering category and perception of their skills Table 19 contains data on education undertaking and the belief that the engineer does or does not have the skills their organisation requires. On average, 20% of engineers who are undertaking formal education do not believe they have the skills required.


in the future? N=355

Undertaking formal training


Totals

Yes 63 (20%) 260 323

No 8 (25%) 24 32

Total 71 (20%) 284 355

Table 19: Data on education undertaking and the belief that the engineer does not have the skills their organisation requires 5.1.2 Data on engineers undertaking education and the expectation that the

engineer will remain in the rail industry for longer than 5 years Table 20 contains data on engineers undertaking education and the expectation that the engineer will remain in the rail industry for longer than 5 years. About 25% of engineers expect to leave the rail industry within 5 years. Table 21 presents data on the skills the organisation needs and the future expectations. Expect to leave the

rail industry within

5 years

Not expect to leave the rail industry for

at least 5 years

Undertaking formal training 5 (10%) 44


43 (29%) 146

Total 48 (25%) 190

Table 20: Data on education undertaking and the expectation that the engineer will remain in the rail industry for longer than 5 years


in the future N=355

Expect to leave the rail industry within

5 years

Not expect to leave the rail industry for

at least 5 years

Unsure

Yes 39 (12%) 167 119

No 4 (12%) 17 11

Total 43 (12%) 184 130

Table 21: Data on the skills the organisation needs and the future expectations 5.1.3 Data of education undertaking and the sector engineers work in Table 22 contains data on the education undertaking and the sector engineers work in. Table 23 is a sub-section of Table 22 as it contains data for only graduate engineers.

Undertaking formal training


Totals

Public 40 (58%) 128 (44%) 168

Private 29 160 189

Total 69 288 357

Table 22: Data on education undertaking and the sector engineers work in Graduate engineers Undertaking formal

training Not undertaking formal training

Totals

Public 5 5 10

Private 5 23 28

Total 10 28 38

Table 23: Data on education undertaking and the sector graduate engineers work in


5.1.4 Data on planning to retire and perception of skills Table 24 provides data relating planning to retire with perception of skills.

Do you think you have the skills your company needs in the future N=355

Planning to retire

Not planning to retire

Total

Yes 58 (13%) 373 431

No 3 (14%) 18 21

Total 61 391 452

Table 24: Data relating planning to retire with perception of skills. 5.1.5 Scatterplot of education undertaking and the age of engineers Graph 8 is a scatterplot of the proportion of engineers undertaking formal education plotted against their age. The correlation coefficient is -0.21. This only reinforces the visual interpretation of the scatterplot which is that there is no relationship between age and education undertaking.

Scatterplot of the proportion of engineers undertaking formal education with age

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

20 30 40 50 60

Age

Graph 8: A scatterplot of the proportion of engineers undertaking formal education plotted against their age

5.2 Statistical Inference From the above data, only one potential relationship (ie age) can be discarded as it appears to be not related to education undertaking. Using hypothesis tests for contingency tables, relationships can be determined. A Person's chi-squared statistic at the 0.05 alpha level was used to determine if the null hypothesis was rejected. Based on hypothesis tests using a 95% confidence level (ie alpha=0.05), it appears that there is a relationship between engineers undertaking formal education and two factors: • the expectation that they will remain in the rail industry for less than 5 years, and • the sector they work in. A closer examination of the statistics regarding the first relationship reveals an interesting issue. One of the major reasons why engineers intend to leave the rail industry in the next 5 years is because of

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 24 retirement. It would be reasonable to expect that these engineers are not going to undertake formal training at this stage of their life. Of the 48 who intend to leave within the next 5 years, 38 intend to retire (ie 80%). Consequently it is necessary to check if this issue is confounding the relationship. If a new contingency table (Table 24) is created which excludes the 38 engineers who retire over the next 5 years (assuming that it is worthwhile for those engineers who retire between 5 and 10 years to still undertake formal education), the relationship still holds up statistically. The relationship between the sector the engineers work in and the formal education they undertake is also interesting. About 31% of those who work in the public sector are undertaking formal education compared with 18% in the private sector. This is a significant difference. The support for this relationship is confirmed by examining the statistics for all engineers and for graduate engineers only. In summary, rail engineers are more likely to be undertaking formal training if they: • are not expecting to leave the rail industry within five years, and/or • work in the public sector.


6 Employment mobility

6.1 Length of employment for engineers According to the survey of individual rail engineers, 52% of engineers have not changed employers in the last decade. Of the 48% who have changed employers, about 53% of these have only changed employers once in the last decade. Graph 9 illustrates the number of employers rail engineers have had over the last decade.

Number of employers rail engineers have had over the last decade

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 >5

Number of employers

Percentage

Graph 9: The number of employers rail engineers have had over the last decade. Table 25 presents a summary of the length of employment for different groups of engineers. Percentage

of all engineers

N=355

Years of employment with fourth

former employer

Years of employment

with third former

employer

Years of employment with second

former employer

Years of employment with former employer

Years of employment with current

employer

Engineers who have not changed employers in the last 10 years N=198

56% 18.5

Engineers who have changed employers once in the last 10 years N=87

25% 17.3 4.1

Engineers who have changed employers twice in the last 10 years N=49

14% 11.5 2.7 3.6

Engineers who have changed employers three times in the last 10 years N=18

5% 12.0 2.0 1.7 1.5

Engineers who have changed employers four times in the last 10 years N=4

1% 13.5 2.5 2.5 2 2

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 26 Table 25: Length of employment for engineers

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 27 Graph 10 gives the weighted length of service for the first and subsequent employers.

Length of service for first and subsequent employers

0

2

4

6

8

10

12

14

16

18

1 2 3 4

Number of employers over the last decade

Length of service

Graph 10: The weighted length of service for the first and subsequent employers. The predicted average length of employment for all rail engineers is 12.2 years. This is based on the assumptions that the average length of employment is 10 years divided by the number of times they have changed employers in the last decade, and for those engineers who have not changed employers in the last 10 years, then the length of employment is the mean length of their current employment. These assumptions mean that the figure of 12.2 years is only an approximation. Consequently it is expected that 8% of the workforce will change employers each year. Note that this 8% figure is strongly influenced by the large number of long-serving employees. If an organisation does not have long-serving employees, then the figure increases to about 30%.

6.2 Reason for changing employers Graph 11 illustrates that the main reasons for changing employers are to seek new challenges (39%), company restructure (27%), combined reasons (23%), promotion (5%), higher salary (5%) and better conditions (3%).


Reason for changing employers

0

10

20

30

40

50

60

70

Reason

Graph 11: Reason for changing employers

6.3 Experienced engineers moving into the rail sector from other sectors About 37% of rail engineers worked in another sector before moving into the rail industry. Graph 12 illustrates the year and number of engineers who moved from other sectors into the rail sector.

Year which engineers joined the rail sector after leaving another industry sector

0

1

2

3

4

5

6

7

8

9

Year

Graph 12: Year in which engineers joined the rail sector after leaving another industry sector The engineers who worked in other sectors mostly came from the construction, civil and structural

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 29 engineering sector. Table 26 provides the list of sectors. Industry sector from which engineers came before

they joined in the rail sector Number of engineers

Construction, civil & structural engineering 29

Manufacturing 19

Mining 17

Electrical 11

Road & Transport 6

Aerospace 5

Coastal and marine 5

Electronics 5

Automation, instrumentation & control 4

Government 4

Telecommunications 3

Chemical 2

Computer 2

Materials handling 2

Steel 2

Other 18

Table 26: The industry sector from which engineers came before they joined in the rail sector Table 27 gives the principal reasons for engineers joining the rail sector. The most common was new challenges. If you worked in another sector before joining the

rail sector, the main reason for my move was: N=132

Percentage

new challenges 33%

forced due to company restructure 14%

better conditions 8%

promotion 5%

higher salary 5%

other 34%

Table 27: Reason for entering the rail sector after working in another sector. 6.3.1 Training upon joining the rail sector About 16% of engineers who moved into the rail sector from another sector undertook formal retraining. About 75% (ie 15 respondents) of these engineers completed an in-house training course which took, on average, 12 months to complete while another 16% (ie 4 respondents) undertook a degree or diploma. Below is a list of some of the training undertaken: • Classroom Training in Signalling (duration: 12 months) • Basic Signalling Training Course (duration: 6 months) • Engineering Cadetship (duration: 60 months) • Electrical Engineering Degree (duration: 48 months) • In company training in railway signalling (duration: 48 months) • Completed MBA with focus on privatisation of railways (duration: 24 months) • BSc Power Engineering degree (duration: 12 months) • short course (duration: 6 months)


6.3.2 Engineers from other sectors and their productivity compared with experienced rail engineers

Table 28 gives a breakdown of the numbers of engineers who entered the rail sector after working in another sector and the length of time before they became as productive as a similar level engineer who had been in the rail industry for several years. The weighted average was 7.7 months.

The length of time before engineers from other sectors were as productive as similar level engineers

who had been in the rail industry for several years. N=23

Percentage Weighted time in months

1-3 months 26% 0.52

4-6 months 44% 2.2

7-12 months 18% 1.89

13+ 13% 3.12

Weighted average 7.7

Table 28: Engineers coming from other sectors and their productivity compared with experienced rail engineers


7 Employment intentions of engineers Table 29 shows that 12% of rail engineers expect or plan to leave the rail sector within 5 years. An additional 50% expect to leave the rail sector within 5 to 10 years. Graduates have similar intentions. It is interesting to note that several engineers and graduates wrote that they would stay in the rail sector for the whole of their working life. This reinforces the anecdotal evidence that the sector is more than just a job for some engineers. Planned or expected length of stay

in the rail industry % of all engineers

N=365 % of all graduates

N=34

Less than 5 years 12% 9%

Between 5 & 10 years 50% 44%

Not sure 37% 47%

Table 29: Engineers' expectations in the industry Table 30 shows that the main reasons people expect to leave the rail sector are to seek new challenges (27%), retirement (25%) and being forced to due to company restructure (24%). If you plan or expect to leave the rail

industry, why? All engineers N=248 Graduates N=34

new challenges 27% 44%

retirement 25% -

forced due to company restructure 24% 9%

Combined & other reasons 12% 29%

better conditions 5% 9%

higher salary 4% 6%

promotion 3% 3%

Table 30: Engineers' reasons for planning to leave the industry Assuming that employment intension and reality coincide, and that the departures from the rail sector are spread evenly over the years, then in each of the next five years, 2.4% (12%/5 years) of rail engineers will leave the rail sector. Of these, 25% will retire which means that about 1.8% of rail engineers (ie 18 engineers) will leave for another sector each year. If a ten year period is examined, and using the same assumptions as above, then 47 rail engineers will leave the rail sector for another sector each year ((62%x0.75/10 years)x1000 engineers). Table 31 shows that 63% of engineers intend to continue practicing engineering in the medium term while only 14% intend to move into non-engineering management.

If you are currently practicing in an engineering area, do you intend to: N=317

All engineers N=317 Graduates N=37

continue to practice for at least 5 years 24% 19%

continue to practice for at least 10 years 39% 30%

move into non-engineering management within 5 years

9% 19%

move into non-engineering management within 10 years

5% 19%

not sure & other 24% 13%

Table 31: The intentions of engineers who currently practice in an engineering area Table 32 shows that the major reason why engineers would move into non-engineering management is new challenges. However graduates are more likely to identify promotion as a more important reason than all engineers. One engineer was particularly keen to move out of engineering design into non-engineering management because he considered that "engineering design is low-paid, semi-technical and very mundane".

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 32 If you plan or expect to move into non-engineering

management, what is the main reason for this? N=30

All engineers N=170 Graduates N=30

new challenges 35% 27%

combined 18% 27%

forced due to company restructure 16% 0

higher salary 15% 17%

promotion 14% 23%

better conditions 2% 7%

Table 32: The reasons why engineers want to move into non-engineering management

7.2 Retirement Looking at the age profile of rail engineers (Graph 1) and assuming the median retiring age is 58, Table 33 is produced indicating the number retiring each year. On average 17 engineers retire each year.

Year Percentage of the workforce retiring

Numbers of engineering retiring

1998 1.7% 17

1999 2.2% 22

2001 0.5% 5

2002 1.7% 17

2003 2.2% 22

1998-2003 8.3% 17

Table: 33 Retirement numbers 1998-2003


8 Organisations views on skill shortages Table 34 shows that 34% of rail organisations are currently experiencing a skills shortage. About 50% of organisations consider that shortages will occur over the next 10 years while about 20% do not believe this.

Response Is your organisation currently experiencing difficulty in recruiting

professional engineering staff? N=44

Do you think there will be a shortage within 5 years?

N=41

Do you think there will be a shortage between 5 and 10

years? N=42

Yes 34% 47% 52%

No 66% 22% 14%

Unsure - 27% 33%

Table 34: Organisations' views on skill shortages

8.1 Engineering specialisations where shortages will occur Table 35 indicates that the three most likely specialisations that will experience a skills shortage are signalling and communications, rolling stock, and track and structures. Survey respondents wrote in the 'other' box a number of additional areas where shortages were predicted to occur and these included data handling, recording and on-board electronics, noise and vibration, overhead line design, and rail logistics.

Area % of organisations expecting a shortage in

this area N=28

signalling & communications 50%

rolling stock 43%

track & structures 32%

business liaison & management 21%

train control & operations 14%

workshops 11%

planning & economics 11%

power supply for electric traction 10%

terminals 5%

other 19%

Table 35: Organisations' views on the specialisation in which shortages will occur

8.2 Engineering specialisations required for new projects Organisations planning major projects over the next 10 years were asked what engineering specialisations would be required. Table 36 reports the results which reveal that the largest specialisations required are rolling stock, signals and communications, and track and structures.

For large projects, in which areas will professional engineering staff be required?

N=12

Percentage

rolling stock 67%

signalling & communications 50%

track & structures 33%

train control & operations 17%

business liaison & management 17%

power supply for electric traction 8%

terminals 8%

workshops 8%

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 34 planning & economics 3%

other, maintenance, project management 17%

Table 36: Engineering specialisations required for new projects

8.3 Staff turnover About 33% of rail organisations stated that they were not concerned with staff turnover. This is despite the fact that some organisations are experiencing a shortage of engineers, and many are predicting a future shortage. For those organisations which are taking measures to reduce staff turnover, the range of measures included: • attempting to reconcile engineering career paths with management career paths especially with

respect to remuneration, • reviewing staff performance targets and training needs, • stability in management, • offering overseas training and challenging careers, • improving career progression, work environment and conditions, • enhancing career development opportunities and introducing an employee share scheme, and • hastening the rail reform process to reach relative stability.

8.4 Obtaining engineering staff for large projects Table 37 indicates that 77% of organisations expect to get the number of engineers they require from the existing pool of Australian rail engineers. The second most nominated source was from overseas. For organisations undertaking large projects, from where do you

expect to source the additional professional engineers? N=13 Percentage

it is the contractor's concern and not ours 8%

from the existing pool of Australian rail engineers 77%

from overseas 62%

from a tertiary institution or other training provider 54%

Table 37: Engineering specialisations required for new projects For organisations undertaking large projects (N=13), 85% had not developed plans to guarantee the availability of the required number of professional engineers.

8.5 Obtaining engineering staff for large projects From the survey of rail organisations, 68% of rail sector organisations also work in other industry sectors. From the survey of rail organisations, on average each rail organisation which employs engineers can transfer 3 engineers to work on rail projects. Obviously these engineers will not be spread evenly across all of the rail engineering specialisations nor will all of them be available for redeployment to rail projects without a time lag.


9 Foreign trained engineers

9.1 Sponsored foreign engineers Over the last 5 years, 23% of organisations (N=43) sponsored foreign engineers to work in Australia on working visas or relocate here under the skilled migration category. About 70% of the ten organisations which sponsored foreign engineers did so to overcome a skills shortage. Table 38 shows that 60% of the sponsored foreign engineers spoke English as their native language. If you have sponsored foreign engineers to work in Australia in the last

5 years, was their native language: N=10 Percentage

English 60%

a language other than English 30%

both 10%

Table 38: Language of sponsored foreign engineers

9.2 Future sponsoring of foreign engineers About 29% of organisations (N=42) are currently considering sponsoring foreign engineers to work in Australia on working visas or relocating them here under the skilled migration category. Of these 12 organisations, 67% of them are doing this to overcome a skills shortage. In other words, 19% of all rail organisations are currently considering sponsoring foreign engineers to work in Australia as a means of overcoming a skills shortage.

9.3 Organisations experience with foreign trained engineers Within the last 5 years, 41% of organisations (N=44) employed engineering staff who were trained overseas and who have had limited engineering work in Australia. The most common countries mentioned were UK followed by USA. Other countries mentioned can be grouped under: • Eastern Europe (Russia, Romania, Serbia, Poland, former Yugoslavia) • Western Europe (Germany) • Asia (China, Hong Kong, India, Malaysia) • Sub-continent (India, Sri Lanka) • Central and South America (Chile, Peru, Colombia) Table 39 shows the relationship between training and native language. The amount of training by non-native English speakers is greater than for native English speakers.


Level of training provided by the

organisation when the foreign engineer

was employed

Native English

speakers (N=16)

Examples of training Non-native

English speakers

(N=14)

Examples of training

None 44% 21%

A little 32% • Product, PC, project management

• Company induction & standard procedures

• Training was on the job

• AIM courses & some special technical courses

57% • electronics in the railway environment

• company introduction & mentoring

• time given to attend English as a Second Language and TAFE courses

• additional support to ensure that systems are understood

• writing & presentation skills

• training in required rolling stock competencies

• Company induction & standard procedures

A lot 12% • railway orientation

• guidance from experienced staff

21% • guidance from experienced staff

• step by step detail in bogie design

• railway orientation

Not stated 12%

Table 39: The relationship between training and English language ability Table 40 shows the length of time that foreign engineers from English and non-English speaking backgrounds take to reach the same productivity as a similar level engineer who was trained and worked in Australia. This indicates that non-native English speakers take about twice as long as native English speakers to achieve the same productivity level. The number of months organisations consider the foreign engineer achieved the same productivity as a similar level engineer who was trained and

worked in Australia?

native English speakers (N=16)

weighted time (months)

non-native English

speakers (N=11)

weighted time (months)

0 months 23% 0 0% 0

1-3 months 38% .46 25% .5

4-6 months 31% 1.55 42% 2.1

7-12 months 7% 0.7 25% 2.5

13+ 0 0 8% 1.2

Weighted average 2.7 6.3

Table 40: The relationship between productivity and English language ability


10 Retired and former rail engineers Of the 94 survey respondents who now no longer work in the rail sector, 39% had retired and 61% became employed in another sector. Table 41 divides this group by their former work sector and engineering qualification.

Category Public sector Private sector Number with degree or above

Number with diploma or below

Former rail sector engineers N=57 38% 62% 72% 28%

Retired N=37 50% 50% 30% 70%

Table 41: Former rail engineers broken down into their former work sector and engineering qualification

10.1 Details of former rail engineers now working in another sector Table 42 reveals that 44% of engineers who left the rail sector for another sector went into an engineering area. There were a range of 'other' occupations and these included farming, horticultural contractor, university lecturer, child care, retail sales and unemployed.

If you went to work in another industry, what was your new occupation? N=55

Percentage

engineering 44%

engineering management 31%

non-engineering management 9%

other 16%

Table 42: Former rail engineers' occupations in their new sector Table 43 reveals that 33% of engineers left the rail industry in search of new challenges. If you work in another industry, why did you leave the

rail industry? N=49 Percentage

new challenges 33%

forced due to company restructure 18%

promotion 8%

higher salary 6%

better conditions 2%

combined & other reasons 32%

Table 43: Reasons for leaving the rail sector Table 44 states the sectors in to which the former rail engineers moved. Industry sector to which the former rail engineers

went to Number of engineers

Construction, civil & structural engineering 10

Road & Transport 5

Mining 4

Manufacturing 3

Government 3

University teaching 2

Unemployed 2

Electrical 1

Aerospace 1

Automation, instrumentation & control 1

Telecommunications 1

Computer 1

Chemical 1

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 38 Other 13

Table 44: Industry sector to which the former rail engineers went to About 86% of the 51 former rail engineers who currently are working in other sectors stated that they would consider returning to the rail sector.


11 Modelling the industry This section develops two models which describe rail engineering skills supply and demand. The models are the: • rail engineering labour supply model, and • rail engineering occupational demand model. The purpose of these models is to approximate the rail engineer labour market and identify the impact on the labour market as a result of specific action, such as an increase in rail projects or training more engineers. The model does not address specific rail specialisations although Section 11.4 examines the employment situation for the two most important engineering specialisations; signalling and communications, and rolling stock.

11.1 Rail engineering labour supply model Figure 3 describes the labour supply in the rail sector. Each of the simplified model's elements are discussed below. The purpose of the model is to identify the most significant factors in the supply of rail engineers. The information can then be used to prioritise responses to bring supply and demand into equilibrium.

* Graduates (20-80/year) * Technologists who have upgraded their skills (21/year) * Foreign rail engineers on working visas (0-5/year) * Immigrant rail engineers (0-10/year) * Australian rail engineers returning home#

Inflows

Outflows

Rail engineering labour supply model (Professional rail engineers)

80 engineers change employers within the rail sector

each year**

Outflows

* Move into non-engineering management in the rail sector (18/year) * Retirement (17/year) * Death and disability (18/year) * Move into another sector (18-47/year) * Australian rail engineers moving overseas**

Expansion pools

* Former rail sector engineers (75-200) * Experienced rail engineers who are working in rail sector organisations on non-rail projects (360) * Non-rail sector engineers#

# for explanation, refer to Sections 11.1.5 and 11.1.13 ** for explanation, refer to Sectsion 6.1

Figure 3: A simplified rail engineering labour supply model


11.1.1 Graduates The limited data on graduate numbers (Section 4.2) makes it impossible to make an accurate estimate of the numbers of new graduates who enter the rail sector each year. The best guess that the researcher can make is that the figure is between 20 and 80 graduates a year. 11.1.2 Technologists who have upgraded their skills About 14% of technologists are currently undergoing formal education (Section 5.1). Assuming that it takes 3 years of part-time study for technologists (who already have a Diploma) to get a Bachelor of Engineering, and that the number graduating are evenly spread across each year, then about 4.7% or 21 (ie 0.47x450) technologists a year are gaining a Bachelor of Engineering. 11.1.3 Foreign rail engineers on working visas In 1997-1998, 835 foreign engineers were sponsored by Australian organisations to work in Australia after the organisations demonstrated that there was a shortage of the required speciality (Appendix 11). As the government does not collect statistics on which industry sponsored the engineers, it is impossible to know accurately how many were rail engineers. However discussions with staff of the Department of Immigration and Multicultural Affairs, and Department of Education, Training and Youth Affairs have led the researcher to conclude that the number is probably between 0 and 5 a year. 11.1.4 Immigrant rail engineers In 1996-97, there was a net migration gain of 800 engineers. In 1995-96, net migration was around 1,300.4 As the government does not collect statistics on the engineering specialisation of migrants, it is impossible to know accurately how many were rail engineers. However discussions with staff of the Department of Immigration and Multicultural Affairs, and the Department of Employment, Education, Training and Youth Affairs have led the researcher to conclude that the number is probably between 0 and 10 a year. This figure is supported by an analysis of the foreign engineers who applied to have their qualifications assessed as a part of the process to migrate to Australia. According to the IEAust, which is commissioned by the Federal Government to assess the qualifications of foreign engineers, of the 2,189 successfully assessed qualifications in 1997, only 3 of the applicants had rail engineering qualifications. In the first 7 months of 1998, of the 1018 engineers assessed, only 1 had rail engineering qualifications. 11.1.5 Australian rail engineers returning to Australia No reliable figures could be obtained specifically for this category. Although some information is collated from the Entry Cards which travellers fill in when they return to Australia from overseas, this information is unreliable as it is based on self-description. In addition, the figures will vary considerably each year as projects start and finish. As there has not be a noticeable 'rail brain drain', it is assumed that the number of engineers who leave Australia is minimal or in balance with Australian engineers returning to Australia. 11.1.6 Former rail engineers who can re-enter the rail sector Every year, between 18 and 47 engineers leave the rail sector for work in another sector (Section 7). Of these, 86% said they would consider returning to the rail sector (Section 10.1), ie between 15 and 40 engineers. As most specialised engineering skills atrophy if not used, these ex-rail engineers would only be able to re-enter the rail sector without retraining within a few years of leaving it. For the purposes of this study, that period is considered to be 5 years. This means that over 5 years, between 75 and 200 former rail engineers are available to re-enter the rail sector (ie 5x15 and 40) at any given time.

4 Department of Employment, Education, Training and Youth Affairs, 1998, Supply and demand for scientists and engineers, Canberra, pp. 9.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 41 11.1.7 Experienced rail engineers who are working in rail sector organisations on

non-rail projects There is a significant pool of experienced rail engineers who can readily transfer their expertise to rail projects with minimal skills upgrading. These engineers are employed by organisations which work in the rail sector and at least one other industry. About 77% of rail organisations employ engineers (ie 175 organisations), and about 69% (ie 120) of these work in 2 or more sectors. From the survey of rail organisations, each of these organisations, on average, can transfer 3 engineers to work in the rail sector (Section 8.5). This means that there is a maximum of 360 engineers who could transfer to the rail sector. Obviously these engineers will not be spread evenly across all of the rail engineering specialisations nor will all of them be available for redeployment to rail projects without a lag in time. 11.1.8 Non-rail industry experienced engineers An unknown number of experienced non-rail engineers from other industry sectors join the rail sector each year. This category makes up the largest expansion pool as it contains virtually all professional engineers in Australia. This group requires on average 7.7 months of training and experience before they reach the productivity level of a similar level engineer who has been in the rail industry for several years (Section 6.3.2). It is worth noting that this time is extended to over 2 years for several of the rail specialisations. 11.1.9 Move into non-engineering management in the rail sector About 9% of rail engineers intend to leave engineering practice and enter non-engineering management within 5 years (Section 7). Assuming that their predictions are true and are averaged out over 5 years, this means that about 1.8% of rail engineers leave per year. This translates to about 18 a year. 11.1.10 Retirement Section 7.2 indicates that on average 17 engineers retire each year. 11.1.11 Death and permanent disability The standardised national yearly death rate for all Australians is 6.2 per 1000.5 On average this means that 6 rail engineers die each year. Assuming that the permanent disability rate is twice the death rate, the total for death and disability is 18 a year.6 11.1.12 Move into another industry sector Every year, between 18 and 47 engineers leave the rail sector (Section 7) and are either employed in another sector or are unemployed. 11.1.13 Australian rail engineers moving overseas No reliable figures could be obtained specifically for this category. Although some information is collated from the Entry Cards which travellers fill in when they return to Australia from overseas, this information is unreliable as it is based on self-description. In addition, the figures will vary

5 Australian Bureau of Statistics, 1997, Deaths, Australia 1997, Catalogue No. 3302.0. 6 This assumption is based on the fact that there are 26 cases per 1000 workers yearly of seriously compensated work related injury or disease. This figure includes not only workplace fatalities (5-6 per 1000) but also incidents that resulted in permanent disability or non-permanent disability (at least 5 days off work). National Occupational Health and Safety Commission, 1997, Compendium of Workers' Compensation Statistics 1995-1996, Sydney.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 42 considerably each year as projects start and finish. As there has not be a noticeable 'rail brain drain', it is assumed that the number of engineers who leave Australia is minimal or in balance with Australian engineers returning to Australia. 11.1.14 Engineers changing employers within the rail sector About 8% of the workforce will change employers each year (Section 6.1). This means about 80 engineers change employers each year. (As noted in Section 6.1, the 8% figure is strongly influenced by the large number of long-serving employees. If an organisation does not have long-serving employees, then the figure increases to about 30%.) 11.1.15 Summary of statistics Table 45 summarises the inflow and outflows. Because of the approximations within these statistics, it is not reasonable to draw any conclusion from the absolute numbers. The only conclusion that should be drawn from the model is that rail engineering supply is most sensitive to: • inflow-the number of experienced rail engineers who are working in rail sector organisations on

non-rail projects • inflow-the number of former rail engineers who can re-enter the rail sector • inflow-the number of graduates employed each year • inflow-the number of technologists who upgrade their skills each year • outflow-the number of engineers who move into another industry sector • outflow-the number of engineers who move into non-engineering management in the rail sector • outflow-the number of engineers who retire This information is used in Section 13: Options for addressing the skills shortage. Inflow or outflow

Group Number of engineers

Inflow 11.1.1 Graduates 20-80

11.1.2 Technologists who upgrade their skills 21

11.1.3 Foreign rail engineers on working visas 0-5

11.1.4 Immigrant rail engineers 0-10

11.1.5 Australian rail engineers returning to Australia in balance with 11.1.13

11.1.6 Former rail engineers who can re-enter the rail sector 75-200 (expansion pool)

11.1.7 Experienced rail engineers who are working in rail sector organisations on non-rail projects

360 (expansion pool)

11.1.8 Non-rail industry experienced engineers unknown (but significant)

Outflow 11.1.9 Move into non-engineering management in the rail sector -18

11.1.10 Retirement -17

11.1.11 Death and permanent disability -18

11.1.12 Move into another industry sector -18-47

11.1.13 Australian rail engineers moving overseas in balance with 11.1.5

Table 45: Summary of inflow and outflows of rail engineers

11.2 Rail engineering occupational demand This section examines the engineering employment impacts of rail construction projects (Section 11.2.1) and railway equipment manufacturing projects (Section 11.2.2). 11.2.1 Employment generated from rail construction projects This section discusses the employment consequences of rail construction projects for engineers. For the purposes of this section, construction projects are defined to cover route design, earthworks, track laying and signal installations. The section only discusses the direct and not the indirect employment consequences.

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 43 Below are the assumptions used in this section: • An average engineer's remuneration package is $65,000 per year (±10%) • The average engineer turns over work valued at 2.8 times their salary a year (±10%). • An average of 8% of a new rail construction project is spent on professional services which

include architectural, project management, engineering design and environmental impact statement services (±10%).

• An average of 50% of the professional services are supplied by rail engineers (±10%). • There is a linear relationship between man-years of work and the value of projects, (ie economies

of scale are ignored). This means that for a construction project worth $1 billion dollars, $80 million will be spent on professional services of which $40 million will be spent on services supplied by rail engineers. The $40 million will require 220 man years of professional rail engineering services (ie $40/($65,000x2.8)). The margin of error is 40% so the true figure should be between 308 and 132 man years per billion dollar project. The total amount of railway construction in 1997 was about $1.2 billion (Appendix 8), so there should be about 264 engineers employed in railway construction. With the downsizing of the construction functions within the rail transport sector, most of this employment would be expected to be found in the rail sector services category. As this category contains about 300 engineers, the above calculations appear reasonable. The relationship between the value of construction projects and the required number of man-years of railway professional engineers to complete them is plotted on Figure 4.

Value of projects ($ billions)

Man-years of railway professional engineers

Relationship between value of construction projects and the required number of man-years of railway

professional engineers to complete them

100 200 300 400 500 600 700

1.0

1.2

2.0

Region of uncertainity

Figure 4: Railway construction projects and their demand for rail engineers


11.2.2 Employment generated from railway equipment manufacturing projects This section discusses the employment consequences of railway equipment manufacturing projects for engineers. For the purposes of this section, railway equipment manufacturing projects are defined as design and production of rolling stock, signalling equipment, communication equipment and products that are unique for the rail sector. The section only discusses the direct and not the indirect employment consequences. Below are the assumptions used in this section: • An average engineer's remuneration package is $65,000 per year (±10%) • The average engineer turns over work valued at 2.8 times their salary a year (±10%). • An average of 10% of a railway equipment manufacturing project is spent on professional services

which include architectural, project management and engineering design services (±10%). • An average of 70% of the professional services are supplied by rail engineers (±10%). • There is a linear relationship between man-years of work and the value of projects, ie economies

of scale are ignored. This means that for a railway equipment manufacturing project worth $1 billion dollars, $100 million will be spent on professional services of which $70 million will be spent on services supplied by rail engineers. The $70 million will require 385 man years of professional rail engineering services (ie $70/($65,000x2.8)). The margin of error is 40% so the true figure should be between 539 and 231 man years per billion dollar project. As the total amount of railway equipment manufacturing projects in 1995-1996 was about $657.2 million,7 there should be about 253 engineers employed in the sector. As this category contains about 200 engineers, the above calculations appear reasonable. The relationship between the value of equipment manufacturing projects and the required number of man-years of railway professional engineers to complete them is plotted on Figure 5.



Relationship between value of equipment manufacturing projects and the required number of man-years of railway professional engineers to

complete them

100 200 300 400 500 600 700

1.0

0.7

2.0

Region of uncertainity

Figure 5: Railway equipment manufacturing projects and their demand for rail engineers 7 ANZSIC 2823 Railway Equipment Manufacturing turnover, Australian Bureau of Statistics, 1995-96, Manufacturing Industry ABS8221.0, pp. 23.


11.3 Occupational demand for rail projects The following section combines the findings of Sections 11.1 and 11.2 to predict the employment consequences over time. In addition to the assumptions which were used when deriving the figures in Sections 11.1 and 11.2, the following additional assumptions were used in this section: • There is a total of 500 rail engineers in the rail services and railway equipment manufacturing

categories. • For a $1 billion rail project, 50% is spent on construction and 50% is spent on railway equipment. • 30% of engineers who currently working in rail services and railway equipment manufacturing

organisations but not undertaking railway engineering can be transferred to rail engineering projects within one year. This translates to 108 engineers (360x0.3=108) (Section 11.1.7). The 30% figure is used because the other 70% are assumed to work in organisations in the rail transport category or are committed to projects lasting for more than one year.

• 30% of former rail engineers could return to the rail sector within one year. This translates to 60 engineers (200x0.3=60) (Section 11.1.6). The 30% figure is used because the other 70% are assumed to be unable to be tempted back or cannot return within one year due to their contracts.

These assumptions result in the following relationships: • For a $1 billion rail project, 110 man-years of rail construction engineering and 192 man-years of

rail equipment manufacturing are required. That is a total of 302 man-years for a $1 billion rail project.

• The rail construction and rail equipment manufacturing categories can attract, in any single year, 168 experienced railway engineers who currently work on non-rail projects in and out of the rail sector. This means that the total number of experienced engineers can expand from 500 to 668, ie a 34% increase (168/500). This figure appears reasonable as rail construction increased by 30% between 1996 and 1997 (Appendix 8) and only limited shortages were reported.

The relationships are plotted on Figure 6. It shows that there are sufficient experienced rail engineers available in Australia to complete $2.2 billion dollars of rail projects each year. Obviously the assumptions and omissions, such as economies of scale and substitution of para-professionals for professional engineers (Section 3.1), mean that this figure should be used with caution. The major conclusion from this analysis is that there are sufficient experienced rail engineers to meet the demand for engineers resulting from a 34% increase in rail projects in one year with only localised shortages. However an increase of over 34% in one year will probably result in significant shortages. In addition, after two or three years of yearly growth of about 30%, a significant shortage of experience rail engineers will probably occur.




Relationship between the value of rail projects and the required number of man-years of railway professional engineers to complete them

100 200 300 400 500 600 700

1.0

2.0

The expansion

pool

The upper limit of the total dollar value of rail projects undertaken in one year using the existing and expansion pool of experienced

rail engineers in Australia

2.2

Current number of engineers in rail

equipment manufacturing & rail

sector services

Figure 6: The limit of rail projects based on the number of experienced rail engineers

11.4 Employment situation for signalling and communications, and rolling stock

In examining any potential rail engineering shortages, the two most important specialisations are signalling and communications, and rolling stock. These areas were identified as the ones in which organisations most expected shortages to occur in and also the areas where the largest number of staff was needed to complete new projects. There are two main differences between these two specialisations and the other rail specialisations. Firstly, both require specialised training. For professional engineers, a minimum of 1.5 years of training is required before an engineer would be considered having the required signalling and communications, or rolling stock specialisation, while for graduates it is 3 years. Secondly, as the organisations utilising these specialisations are less likely to work in other sectors than say, organisations specialising in structures and track, they have fewer experienced staff who are working on non-rail projects and who could transfer to rail projects. These two distinctions have two consequences. Firstly the expansion of skills supply using the existing skills base will be less than the 34% as identified in Figure 6. If a greater expansion is required, training is the only practical solution. However due to the training period, there would be a time lag before the specialists become available. It is also worth noting that during the training period, the amount of work completed by the supervising engineer will be less than before the trainees were hired become some of the supervising engineer's time is required for teaching and supervising.


12 Organisation's views on addressing the skills shortage When organisations were asked to prioritise measures which could address a skills shortage, the list in order was: • introduce post-graduate units and courses on rail engineering • increase the number of graduates from TAFE & universities • increase skilled migration Other suggestions from the organisations included: • developing substantial work experience programs for students with the rail sector • introduce rail engineering into elective subjects at TAFE and university before graduation to

encourage people into the industry • increase salaries to increase the attraction of engineering as a profession • encourage mentor systems in organisations • raise the profile of rail engineering • increase staff retention When organisations were asked to prioritise who should be responsible for developing medium and long-term strategies to eliminate the projected shortage, the list in order was: • team approach of industry, government and professional associations • industry associations • professional associations • each organisation • tertiary institutions


13 Options for addressing the skills shortage The study has provided sufficient evidence to indicate that the existing skills shortage will increase if the volume of rail sector work increases and the rail sector does not implement strategies to address the shortage. Strategies should be focused on the dominating factors as identified in Section 11.1.14. By dividing the actions to address these factors into short and long-term strategies (Table 46), and by utilising information provided by individual engineers and organisations, each organisation and the rail sector as a whole can identify the most effective action for combating shortages. Term Sensitive factors in rail skills supply Action to counter the factor

Short-term outflow the number of engineers who move into another industry sector

13.1.1 Reducing the number of engineers who move into another industry sector

outflow the number of engineers who move into non-engineering management in the rail sector

13.1.2 Reducing the number of engineers who move into non-engineering management in the rail sector

inflow the number of former rail engineers who can re-enter the rail sector

13.1.3 Attracting former rail engineers who now work in another sector

inflow the number of experienced rail engineers who are working in rail sector organisations on non-rail projects

13.1.4 Redeploying experienced rail engineers who are working in rail sector organisations on non-rail projects

outflow the number of engineers who retire 13.1.5 Retaining engineers who would otherwise take early retirement

Long-term inflow the number of graduates employed each year

13.2.1 Increasing the number of graduates in the rail sector

inflow the number of technologists who upgrade their skills each year

13.2.2 Increasing the number of technologists who upgrade their skills each year

Table 46: The division of actions into short and long-term.

13.1 Short term actions In the short-term, there are three dominating factors which can be addressed. These can be addressed by organisations directly without needing industry-wide agreement. 13.1.1 Reducing the number of engineers who move into another industry sector Graph 11 revealed that the main reasons why rail engineers leave the rail sector. They are to seek new challenges, retirement and being forced to leave due to company restructuring. Better conditions and higher salary rated very low as reasons for leaving the rail sector. Recognising these reasons, organisations should consider a number of activities to eliminate them. These activities could include: • identifying and providing the challenges sought by each engineer which also benefit the

organisation. Examples of these include: • project management opportunities, • linking key performance indicators with the challenges being sought to ensure that the

organisation and engineer focus on the desired outcome, • temporary placement with upstream and downstream organisations, • overseas postings, • post-graduate courses, • in-house self-improvement training, • working on advanced technology development projects.

• developing a career plan for each engineer which directly addresses their needs and ensures that the organisation is aware of them,

Engineering for rail sector growth: A report on engineering rail skills supply and demand in Australia Page 49 As organisations which are restructuring offer a source of experienced rail engineers for organisations which are expanding, relationships could be developed between the two organisations. Invariably restructuring organisations will be pleased to help their engineers get work in expanding organisations. 13.1.2 Reducing the number of engineers who move into non-engineering

management in the rail sector Table 32 revealed that the main reasons why engineers move into non-engineering management in the rail sector is because they are seeking new challenges, and for graduates, because of promotion. Organisations should consider a number of activities to eliminate these reasons. In addition to activities listed in 13.1.1, other activities could include: • providing an alternative promotion stream in technical engineering and project management areas, • increasing the status of technical engineering within the organisation. 13.1.3 Attracting former rail engineers who now work in another sector Table 27 revealed that the main reason why experienced engineers move into the rail sector is because they are seeking new challenges. The same will be true for former rail engineers who now work in other sectors. As former rail engineers would not require the same degree of training and would have a higher initial productivity rate compared with non-rail engineers, part of the associated savings from hiring former rail engineers could be used to fund relocation expenses and other incentives. One of the difficulties facing organisations wanting to hire former rail engineers is trying to locate them. Ways to do this, besides advertising in newspapers, include: • use of the ENGSEARCH engineering employment service (www.ieaust.org.au), • direct mailing former rail engineers using lists provided by the IEAust and Institution of Railway

Signal Engineers. 13.1.4 Redeploying experienced rail engineers who are working in rail sector

organisations on non-rail projects The redeployment of experienced rail engineers who are working in rail sector organisations on non-rail projects is decided within each organisation on the basis of best returns, strategic direction and other issues. However, organisations should consider this expansion pool as a strategic reserve that may be very valuable in a turbulent labour market. 13.1.5 Retaining engineers who would otherwise take early retirement A short-term strategy to retain experienced engineers is to discourage staff from taking early retirement or to stay on after retirement age. This is best done by offering them incentives to stay. In addition to activities listed in 13.1.1, other activities could include: • working part-time, • mentoring graduate engineers, • encourage the engineers to transfer their profession knowledge via rail conferences and in-house

seminars. 13.1.6 Increasing the number of foreign engineers sponsored by organisations to

work in Australia One way of increasing the number of engineers entering the rail sector is to increase the number of foreign engineers sponsored by organisations to work in Australia. Section 9.2 indicates that 29% of organisations are currently considering this option. While the professional associations and unions will accept small numbers of foreign specialists being brought into Australia, increasing the number substantially will result in a political campaign to slow this down, especially if it is considered that the sponsorship is being used as a substitute for training Australian engineers.


13.1.7 Increasing the number of experienced engineers employed from other sectors in the rail sector

The main difficulty in hiring experienced engineers who do not have rail specialisation is that they need training and have lower initial productivity than experienced rail engineers. Ways to overcome this difficulty include: • encouraging them to undertake rail specialisation courses before commencing employment, • organising distance education and residential schools for specialisation.

13.2 Long term actions For long-term strategies to work effectively, a rail sector-wide program is required. This is necessary to stop some organisations benefiting from the work of others through poaching trained staff. See Section 13.3 regarding the rail sector-wide program. In the long-term, there are two dominating factors which can be addressed. 13.2.1 Increasing the number of graduates in the rail sector Combining the answers in Tables 13 and 14, it appears that the main reason for not hiring more graduates is instability in the amount of work. Assuming greater stability occurs in the rail sector over time, the other main impediments to hiring graduates are their lengthy training periods and the organisations' lack of staff to supervise the graduates. A number of survey respondents suggested solutions to these and other impediments to hiring more graduates. These include: • employing graduates part-time and on short-term contracts. This could be done by forming a Rail

Group Training Scheme where the graduates are employed by the Scheme and hired out on an as needs basis to rail organisations. Not only does this allow greater flexibility for organisations, but it also increases the skills of graduates as the Scheme ensures that they are rotated through various organisations. The Scheme would be modelled on the self-funding Apprentice Group Training Schemes which currently employ over 23,000 apprentices Australia-wide and offers them to more than 30,000 organisations of which 50% have less than 5 employees,

• organising rail work experience over vacation periods for under-graduates, • organising rail specific courses with TAFEs, universities and private providers, • encouraging TAFEs and universities to offer sandwich courses which have a semester or year long

work experience component, • reducing the learning curve time by developing a structured graduate training program. This could

be done with other rail sector organisations to ensure that graduates are exposed to all types of rail engineering work. The IEAust can assist in developing graduate training programs.

• reducing the learning curve time by introducing an active mentoring program which has additional requirements such as public speaking and CAD training.

A critical issue in graduate training is to ensure that the sector attracts high quality undergraduates. There are a number of ways to do this. They include: • advertising the rail sector growth and excellent employment potential, • developing rail specific courses which are seen as leading directly to work in the rail sector, • offering rail sector under-graduate scholarships on the condition that the graduate works in one of

the sponsoring organisations for 4 years. While this condition is not legally enforceable, it introduces moral pressure and promotes the idea that the rail sector only wants the best under-graduates.

13.2.2 Increasing the number of technologists who upgrade their skills each year There is considerable potential in increasing the number of engineering technologists who are undertaking courses to become professional engineers. Not only will these staff have a very practical focus and years of work experience, they are more likely to increase their loyalty to the organisation. Therefore organisations should encourage their technologists to undertake training and consider offering financial and time incentives for the training.


13.3 Rail sector-wide strategy As all rail organisations will benefit from reducing any future skills shortage, all organisations in the sector should bear the cost of the shortage elimination strategy. Otherwise some organisations will be at a competitive advantage as they will not bear training and development costs, yet will have access to a pool of skilled engineers. Many of the elements of the strategy are listed in Sections 13.1 and 13.2. There are a number of principles which the strategy must conform to. They are: • The strategy should be developed through consensus by all stake-holders; ie rail companies,

government, professional associations and training providers. • Government's role should be limited to assisting with the strategy development and moral support. • Market forces should be used to provide competition in the provision of education services. • The vast majority of rail organisations should sign up to the strategy. • The signatories to the strategy should be given preference by government and other signatories. • Financial arrangements should reflect the fact that both organisations and individual engineers

benefit from training. • Arrangements should reflect the fact that the rail sector consists of large, medium and small

organisations and all of them have different needs.


14 Conclusion The study identified a number of factors which indicate that a shortage is likely to occur. The study also identified the reasons for the problem and suggested solutions. While individual rail organisations can undertake effective actions to address short-term shortages, the only effective long-term solution is a rail sector-wide approach. So it is now up to the rail organisations to collectively recognise that this problem will effect them all and develop a targeted shortage elimination strategy.

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Rail in Australia is set to perform much more of the nation's transport task. To realise its potential, rail infrastructure will need to be upgraded which requires a significant number of both skilled rail engineers and technically competent managers. Underpinning the renaissance of rail will be a renewed emphasis by all sectors of the rail industry on education, training and research.

Philip Laird, National Chairman, Railway Technical Society of Australasia

"Rail is emerging as the transport mode of early 21st century and the engineering team can earn their passage by providing the skills needed by employers. New rail technology demands that we develop innovative approaches to professional development for rail engineers. We must explore all options, including group training schemes, post-graduate distance education courses and rotational placement, and then implement the best." Joe Abercrombie, President, Institution of Engineers, Australia

"Rail in Australia is set to perform much more of the nation's transport task. To realise its potential, rail infrastructure will need to be upgraded which requires a significant number of both skilled rail engineers and technically competent managers. Underpinning the renaissance of rail will be a renewed emphasis by all sectors of the rail industry on education, training and research."

Philip Laird, National Chairman, Railway Technical Society of Australasia

"Rail is emerging as the transport mode of early 21st century and the engineering team can book their tickets on the industry's expansion by having the skills needed by employers. New rail technology demands that we develop new approaches to career advancement for rail engineers. We must explore all options, such as group training schemes, post-graduate distance education courses and rotational placement, and implement the best."

Joe Abercrombie, President, Institution of Engineers, Australia

Australasian Railway Association

The renaissance of rail is gathering pace in Australia and around the world. To facilitate that process we must plan for the availability of experienced engineers, engineering technologists and engineering officers. While individual companies are taking initiatives to mitigate against immediate shortages, it is in our own best interests as an industry to develop a longer term strategy to properly resource our continued growth. Ray McCutcheon, President, Australasian Railway Association

"This report categorically confirms the anecdotal evidence that the existing shortage of signal engineers is getting more acute. While this global shortage will reflect in short-term benefits to the individual via higher wages, it will undermine the sustained growth of the industry. By the professional associations, industry and education providers working together, we can build on our excellent human resources and develop an Australian rail sector which will be internationally cost competitive and export orientated." Malcolm Menadue, Chairman, The Institution of Railway Signal Engineers (Australasian Section)

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