Michael Pascoe

Bagging the so-relaxed-they’re-asleep-at-the-wheel Government over skills shortages last week is a privilege reserved for voters, not businesses. Corporate Australia has no-one to blame but itself for the skills crisis.

What’s coming painfully home to roost is the ugly flock of consequences from a generation of bonus-culture management taking short-term decisions to boost their immediate pay packets.

The bonus culture of vastly inflated salaries for the chosen few is a full brother of the cut-costs-at-any-cost and the outsource-everything cultures. Together, these have meant slashed training budgets, ditched apprenticeship positions and reduced full-time head counts throughout the nation. Slashing immediate costs was the path to higher bonuses – never mind the long term impact.

The trouble with a cascading climate of outsourcing is that, by the time the actual job gets down to the floor, it’s some individual sole trader doing it with no time or money for training anyone.

And it’s not just the headline-grabbing technical skills either. Rio, for example, ditched a whole layer of management training as an unnecessary cost – but then found there is a big gap between the skills of a mine manager and senior executive.

We are reaping the rewards of letting CFOs effectively run companies for the decade coming out of the last recession. Adding to that was the coincidence of the wave of public sector corporatisations and privatisations – the “fat” trimmed from the countless government bodies in the process was often a protective layer of skilled people the private sector traditionally called upon when good times rolled.

So don’t cry for the corporate sector as it surrenders some of its profit share to labour – it’s a cost that business incurred in the 1990s when it was cutting its investment in people.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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