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State-nominated Occupation List

Industry skills requirement through state-nominated

skilled migration

APRIL 2016

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RESTAURANT & CATERING AUSTRALIA

Restaurant & Catering Australia (R&CA) is the national industry association representing the interests

of 35,000 restaurants, cafes and catering businesses across Australia. R&CA delivers tangible

outcomes to small businesses within the hospitality industry by influencing the policy decisions and

regulations that impact the sector’s operating environment.

R&CA is committed to ensuring the industry is recognised as one of excellence, professionalism,

profitability and sustainability. This includes advocating the broader social and economic

contribution of the sector to industry and government stakeholders, as well as highlighting the value

of the restaurant experience to the public.

Cover images courtesy of Tourism Australia

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CONTENTS

EXECUTIVE SUMMARY _____________________________________________________________ 4

THE VALUE OF THE TOURISM & HOSPITALITY SECTOR ____________________________________ 5

SA VISITOR ECONOMY & MIGRATION _________________________________________________ 6

CURRENT SKILLS SHORTAGES______________________________________________________ 7

LOCATION & LENGTH OF SKILLS SHORTAGES _________________________________________ 8

STATE-NOMINATED OCCUPATION LIST________________________________________________ 10

CHALLENGES USING THE LOCAL LABOUR FORCE TO ADDRESS SKILLS SHORTAGES ___________ 10

International students and working holiday makers _________________________________ 11

Aging population ____________________________________________________________ 11

Reform of the VET system _____________________________________________________ 11

Difficulty retaining staff _______________________________________________________ 12

CONCLUSION ___________________________________________________________________ 13

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EXECUTIVE SUMMARY

Restaurants, cafes and hospitality providers are an important part of South Australia’s economy.

Cafes, restaurants and takeaway businesses are the largest employer across all tourism-related

sectors in the visitor economy; employing 32,600 South Australians in 2,000 businesses. These

businesses are small businesses; with 92 per cent of café and restaurant owners employing 19

people or less.

Tourism and hospitality businesses rely heavily on labour for productivity, efficiency, and growth.

However, the sector is currently experiencing a shortfall of 38,000 workers nationally, with this gap

expected to increase to 123,000 jobs by 2020. The café and restaurant sector is expected to lead

tourism demand for staff out to 2020, with an additional 93,600 jobs needed across the café,

restaurant and takeaway businesses, an increase of 16.9 per cent.

South Australia will not be immune to this phenomenon, with significant shortfalls and difficulties

in sourcing staff reported across the state. This shortage of skilled and unskilled labour constricts

growth and productivity of many small businesses in regional and metropolitan South Australia.

R&CA also remains concerned over the impact of defunding VET qualifications that are in extreme

need by the sector, and the subsequent flow-on affect this will have on the sectors reliance on the

migration system to address skills shortages.

The availability of skilled labour through Australia’s temporary migration system is therefore of

critical importance to the productivity of South Australia’s tourism and hospitality sector, as well as

achieving the state’s tourism objective of doubling overnight visitor expenditure to $8 billion by

2020.

R&CA’s comments to the State-Nominated Occupation List (SNOL) remain largely unchanged since

its submission in 2015. R&CA’s position remains that Cooks, Chefs and Café and Restaurant

Managers must be retained on the SNOL as a matter of priority. The extension of the SNOL to include

a greater number of hospitality positions including the recently endorsed occupation of Trade

Waiter is necessary to meet chronic shortfalls in labour that already exist, as well as meet the

demand for skilled staff well into the future.

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THE VALUE OF THE TOURISM & HOSPITALITY SECTOR

Australia’s visitor economy is a $113 billion industry, employing close to 1 million people and supporting

267,000 businesses across metropolitan and regional Australia. Deloitte’s Positioning for Prosperity?

Catching the next wave report identifies tourism as one of Australia’s five super growth industries, with

the sector expected to grow more than 10 per cent faster than global gross domestic product (See Figure

1). Australia’s top five super growth industries including tourism have the potential to deliver an additional

$250 billion to the national economy over the next 20 years if these growth projections are realised1.

The café, restaurant and takeaway sector is the largest contributor to SA’s tourism industry; employing

32,600 Australians across 2,000 businesses. The sector generates $2.0 billion in turnover, of which $850

million is attributed to State Gross Value Added and $243 million to the SA tourism industry. Ensuring this

sector continues to prosper is essential for the growth of the broader economy.

1 Deloitte (2013) Positioning for Prosperity? Catching the next wave

2.50

2.52

2.96

3.24

3.25

3.28

3.34

3.42

3.49

3.49

3.53

3.57

3.62

3.70

3.81

3.9

3.95

4.06

4.08

4.11

0.00 1.00 2.00 3.00 4.00 5.00

Media

Manufacturing

ICT

Construction

Mining

Banking

Oil

Telecommunications

Business and property services

Transport and logistics

Public administration

Other education and training

Retail and wholesale

Water and waste services

Wealth Management

International education

Health

Agribusiness

Tourism

Gas

Global growth rate (%)

+ 10% GGDP

Figure 1: Projected annual global industry output growth, 2013-33

Sourc

e: D

elo

itte

Access E

conom

ics

GGDP

- 10%

GGDP

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SA VISITOR ECONOMY & MIGRATION

The availability of appropriately skilled staff is critical to the growth and productivity of the tourism and

hospitality sector. Service Skills Australia’s Tourism, Travel and Hospitality Environmental Scan 2014

highlights that strong domestic demand and a growing tourism base is expected to lead to phenomenal

employment growth in the visitor economy over the next five years, particularly in the café, restaurant

and takeaway food sector2.

The Department of Employment indicates that employment in the cafe, restaurant and takeaway food

sector has a projected five-year employment growth rate of 16.9 per cent, requiring an additional 93,600

workers by November 20193. This is a considerable revision from the 8.9 per cent growth rate or 43,900

jobs projected in 2014. It also represents a significant proportion of the tourism employment demand

expected to 2020 (approximately 123,000 jobs4). In addition, the Department of Employment projections

indicate phenomenal employment growth for key hospitality occupations including chefs, which has a

projected employment growth rate of 20 per cent to November 2019 (See Table 2)5.

The ability of the sector to meet growth in employment will not be met by the local labour force alone.

The design and operation of Australia’s national and state-based migration programmes has a significant

impact on the sectors ability to meet growth targets and projected employment demand. Chronic

shortages of skilled and unskilled labour continues to be a major concern for the sector and requires due

consideration in the design of the SNOL.

2 Service Skills Australia (2013) Tourism, Travel and Hospitality Environmental Scan 2014 – DRAFT, p.21 3 Department of Employment (2015) 2015 Employment Projections, Industry projections to November 2019 4 Deloitte Access Economics (2015) Australian Tourism Labour Force Report:2015-2020, Australian Trade Commission, Austrade, October 2015 5 Department of Employment (2015) 2015 Employment Projections, Industry projections to November 2019

Occupation Code

Occupation

Employment Level – Nov 14 (‘000)

Department of Employment Projections

Projected employment level –

November 2019 (‘000)

Projected employment growth – five years to November 2019 (‘000)

(‘000) (%)

1411 Café & Restaurant Manager 63.4 72.2 8.7 13.8

3513 Chef 89.6 109.6 20.0 22.3

3514 Cook 35.8 39.4 3.6 9.9

4311 Bar attendants and Baristas 82.0 93.0 11.0 13.4

4312 Café Workers 24.1 27.0 2.9 12.0

4315 Waiters 121.3 139.9 18.6 15.3

Table 1: Employment growth projections by hospitality occupation

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CURRENT SKILLS SHORTAGES

In 2015 Deloitte Access Economics released the Australian Tourism Labour Force Report: 2015-2020. This

report succeeds the Australian Tourism Labour Force Report 2011 which quantified and identified the

major skill and labour shortages within the sector. The 2015 report highlights the café and restaurant

sector still has the highest level of deficiencies in relation to skills, retention and recruitment of staff than

any other tourism-related sector (See Table 2 below).

The proportion of restaurant and café businesses identifying recruitment deficiencies is nearly double

that of other sectors. The main reason given for recruitment difficulties was the lack of access to workers

with the required skills. Further, 81 per cent of restaurant and café businesses identified skills

deficiencies in potential staff, 12 percentage points above the national average. Moreover the report

revealed that South Australia had the highest number of businesses reporting skills deficiencies at 75 per

cent6.

The sector also employs a larger proportion of international workers than the national average with 15

per cent of workers being from overseas compared to the national average of 10 per cent7.

6 Deloitte Access Economics (2015) Australian Tourism Labour Force Report:2015-2020, Australian Trade Commission, Austrade, October 2015, p. 31.

7 Deloitte Access Economics (2015) Australian Tourism Labour Force Report:2015-2020, Australian Trade Commission, Austrade, October 2015, p. ix-x.

Metric Accommodation Attractions Restaurants & Cafes Other

Businesses reported as seasonal 44% 49% 59% 47%

Average # employees 21 22 21 11

Vacancy rate 5% 4% 9% 10%

Turnover rate 51% 42% 88% 61%

% identifying recruitment deficiencies

39% 36% 71% 38%

% identifying retention deficiencies 27% 22% 52% 30%

% identifying skills deficiencies 66% 59% 81% 64%

Top deficiency identified Capability management

Experience opportunities

Capability misalignment

Experience

Top occupation affected by deficiency

Cleaner

Tour guide

Chef

Hospitality Worker

Table 2: Recruitment, retention and skill deficiencies across tourism sub-sectors

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LOCATION & LENGTH OF SKILLS SHORTAGES

The Deloitte Access Economics Australian Tourism Labour Force Report 2011 indicated that shortages

of skilled and non-skilled labour will continue to affect a majority of Australia's top tourism regions,

including South Australia. Adelaide, South East South Australia and the rest of South Australia8 are all

expected to experience demand that exceeds the available supply of hospitality workers. While only

projected to 2015, R&CA believe these indicative supply shortages are still representative of the

shortages experiences by the sector.

As the following tables demonstrate, South Australia is experiencing above average vacancy rates, with

the Rest of South East South Australia and Rest of South Australia in the top five destinations facing the

greatest difficulty in filling vacancies9. Employment growth projections and current skills shortages

identified in this submission will not be met by the local labour force alone. Skilled migration is, and

will continue to be, one of the core mechanisms for sourcing labour within the sector now and into the

future.

8 Note: Tourism regions as defined by Tourism Research Australia for the purposes of the IVS & NVS 9 Deloitte Access Economics (2011) Australian Tourism Labour Force Report – Labour Force Profile (Part 1), p. vi, vii and xi

Estimated tourism labour shortages

Mega Region

Vacancy

Rate

Diff. to Australian

average

Employed

persons est.

Above average

vacancies est.

Northern Territory 16% 14% 5,356 743

Rest of WA 13% 12% 5,100 600

Northern and inland NSW 13% 11% 32,780 3,564

Southern NSW including ACT 12% 11% 32,141 3,389

Eastern Victoria 12% 10% 14,617 1,531

Rest of South East South Australia 11% 10% 5,684 558

Melbourne and Port Phillip Bay 10% 8% 86,120 7,318

Southern Western Australia 10% 8% 42,668 3,380

Rest of South Australia 10% 8% 4,031 317

Western Victoria 9% 7% 18,265 1,307

Rest of Queensland 8% 6% 19,330 1,214

South Coast, Sydney and surrounds 5% 3% 10,8335 3,585

Adelaide and Adelaide Hills 4% 3% 27,554 703

South East Queensland 4% 3% 77,692 1,954

Australian tourism industry 9% 7% 500,500 35802

Table 3: Indicative supply shortages by tourism region

Source: ABS 2010, DAE forecasting model and survey results

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Reported time to fill vacancies

Mega Region

<= 4 weeks

> 4 weeks

<=8 weeks

> 8 weeks

Could not fill

Total

difficulty

Eastern Victoria 5.7% 2.9% 1.5% 3.3% 13.4%

Rest of South East South Australia 4.4% 2.8% 2.4% 3.3% 12.9%

Rest of Western Australia 4.7% 2.9% 1.5% 2.6% 11.6%

Rest of South Australia 2.8% 2.1% 1.2% 3.0% 9.1%

Western Victoria 2.6% 1.7% 1.4% 2.5% 8.2%

Northern and inland NSW 3.2% 2.6% 0.8% 1.6% 8.2%

Melbourne and Port Phillip Bay 3.0% 1.8% 0.3% 2.8% 8.0%

Rest of Queensland 4.3% 2.0% 0.4% 1.2% 7.9%

Northern Territory 3.6% 1.6% 0.5% 1.8% 7.6%

Southern NSW including ACT 2.2% 1.8% 0.6% 1.5% 6.0%

South East Queensland 2.4% 1.2% 0.7% 1.5% 5.9%

Southern Western Australia 1.8% 0.9% 0.7% 1.6% 5.0%

South Coast, Sydney & surrounds 1.4% 1.0% 0.3% 1.0% 3.6%

Adelaide and Adelaide Hills 1.1% 1.0% 0.4% 0.7% 3.2%

Australian tourism industry 2.5% 1.5% 0.7% 1.7% 6.3%

Accumulated labour demand for top 10 regions 2012-2015

Accumulated

demand for

skilled workers

Accumulated

demand to be met

through alternative

sources

Accumulated

demand for

workers

% all demand

Sydney (NSW) 8,478 13,037 16,946 30%

Melbourne (VIC) 6,337 10,298 13,281 23%

Experience Perth (WA) 2,303 4,304 5,396 10%

Brisbane (QLD) 1,848 3,450 4,331 8%

Adelaide (SA) 1,502 3,123 3,670 6%

Gold Coast (QLD) 356 616 784 1%

Greater Hobart (TAS) 315 666 761 1%

Mid North Coast (NSW) 297 609 671 1%

Canberra (ACT) 281 489 622 1%

Tropical North QLD (QLD) 242 439 513 1%

Subtotal (top 10) 21,960 37,031 46,975 83%

Total 25,927 45,782 56,676 100%

Source: DAE survey results. Note: As a proportion of all employees in the region

Table 4: Reported time to fill vacancies in 2010 (where there was a difficulty)

Table 5: Accumulated labour demand 2012-15 by top 10 tourism regions

Source: DAE labour force model.

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STATE-NOMINATED OCCUPATION LIST

South Australia requires a flexible and responsive migration system that actively addresses the labour and

skill shortages of its fastest growing industry sectors, including tourism and hospitality. Addressing these

needs through the state-nominated occupation list (SNOL) is necessary to meet expected employment

growth, as well as achieve the state’s tourism objective of doubling overnight visitor expenditure to

$8 billion by 2020.

Cooks, Chefs and Restaurant & Café Managers must remain on the SNOL as a matter of priority. Further

consideration should also be given to the inclusion of Trade Waiter on the SNOL following its recent

national endorsement. The reasons for this are threefold: demand currently exceeds supply for these

occupations and is expected to do so well into the future, with regional South Australia experiencing a

greater level of difficulty sourcing staff; the sector by nature has a high attrition rate, with a declining

source of available young workers to fill vacancies; and while reform of the VET system will produce

effectively trained staff in the future, the number of apprentices will not be sufficient to meet the sheer

volume of vacancies that already exist.

Skilled migration will therefore continue to be an important part of addressing labour shortages in the

sector.

CHALLENGES USING THE LOCAL LABOUR FORCE TO ADDRESS SKILLS SHORTAGES

A considerable body of work exists examining alternative sources of labour to alleviate shortages in the

tourism and hospitality sector other than skilled migration10. Alternative sources of labour include

international students and working holiday makers, apprentices, and non-traditional workers including

mature-age workers, indigenous employees and workers with a disability. However, the ability of these

workers to provide a suitable pool of labour to address shortages is contingent upon the number of

vacancies that currently exist, visa requirements for overseas students and workers, and the time required

to effectively train and develop appropriate candidates.

R&CA seeks to outline some of the key challenges faced by the sector in filling current vacancies through

alternative sources of local labour:

10 Deloitte Access Economics (2013) Australian Tourism Labour Force Report – Labour Force Profile (Part 1) 2011, p. xviii;

Service Skills Australia, Tourism, Travel and Hospitality Environmental Scan 2014 – DRAFT

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International students and working holiday makers

The tourism and hospitality sector supports the integration of international students and working holiday

makers into the Australian hospitality workforce. However, visa requirements only allow international

students to work a maximum of twenty hours per week, with working holiday makers only able to work

for an employer for up to six months. Tourism and hospitality professions are not included as one of the

industries which allows workers to extend their visa into a second year by working in regional Australia.

Aging population

The tourism and hospitality sector has traditionally been characterised by a younger workforce, with

45.7 per cent of workers aged 15-24, compared to 16.8 per cent for all other Australian industries11.

However, as a result of an ageing population, the proportion of younger people available to work in the

sector is in decline. The availability of staff at the junior or frontline level continues to be an area of great

concern among senior tourism executives12.

Reform of the VET system

Considerable work is being done to increase local workforce participation through the Vocational

Education and Training (VET) system. However, research by the Centre for the Economics of Education and

Training suggests that from 2006-2016, Australia will require an additional 2.5 million people with VET

qualifications, 1.7 million of which will need to be qualified at Certificate III level or above13.

In addition, a Service Skills Australia survey in 2009 found that some training programs were not providing

individuals with the skills and knowledge that employers require14. While VET reform has addressed some

of these issues, the reality remains that the number of qualified workers produced through the VET system

will simply not be enough to meet current and future demand for skilled workers.

Furthermore, R&CA remains concerned by changes to the VET system in South Australia, and the impact

defunding critical qualifications will have on the sector and its subsequent reliance on the migration

system. R&CA’s position remains that positions funded under the WorkReady program must be based on

need and demand by growth sectors such as hospitality.

11 Service Skills Australia (2013) Tourism Travel and Hospitality Environmental Scan 2011, p.17 12 Tourism & Transport Forum (2009) Tourism Industry Sentiment Survey, October 2009 13 Business Council of Australia (2007) Restoring our Edge in Education, p8 14 Service Skills Australia (2009) Tourism, Travel and Hospitality Environmental Scan 2009, p.13-14

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Difficulty retaining staff

The Deloitte Access Economics report found 46 per cent of businesses experience problems retaining staff.

Continual training and the promotion of talent are considered two key aspects in retaining staff, and

reducing the cost associated with high staff turnover. However, the Deloitte Access Economics report

found that only 20 per cent of businesses pursue structured career paths as a strategy to retain staff15. A

major contributor to the lack of career pathways is the large number of businesses that are small or micro-

sized.

15 Deloitte Access Economics (2013) Australian Tourism Labour Force Report – Labour Force Profile (Part 1) 2011, p. iv - v

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CONCLUSION

R&CA welcomes the opportunity to comment on South Australia’s state-nominated occupation list. The

tourism and hospitality sector is currently experiencing chronic shortages in skilled and non-skilled labour,

with these shortages expected to increase to 123,000 by 2020. Current skills shortages are likely to be

further exacerbated by employment growth expected in the sector over the coming years.

South Australia has not been immune to these labour shortages, with regional South Australia having

greater difficulty in sourcing labour. Indeed, the most recent release of the Deloitte Access Economics

Tourism Labour Force Report revealed South Australia has the highest level of skills deficiencies amongst

its staff than any other state.

As a labour intensive industry, the tourism and hospitality sector requires appropriately skilled labour for

productivity, efficiency and growth. As the above analysis demonstrates, the demand for skilled hospitality

workers will not be met by the local labour force alone. Skilled migration is, and will continue to be, one

of the core mechanisms for sourcing labour now and into the future.

Migration policy must be at the forefront of solutions to ease labour and skills pressures in South Australia.

R&CA advocates retaining Cooks, Chefs and Restaurant Managers on the SNOL, while extending the SNOL

to include a greater number of hospitality occupations such as Trade Waiters to address chronic shortages

affecting the sector.

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RESTAURANT & CATERING AUSTRALIA

PO Box 121

SURRY HILLS NSW 2010

T | 1300 722 878

F | 1300 722 396