By Kelly Burke

Garry Brack … unions push a cause which “relies on labour shortages to drive wages up”.

ALMOST two thirds of large companies are considering hiring staff from overseas to overcome skills shortages, according to a recent national salary survey by the Australian Institute of Management.

Recruiting difficulties are chronic in construction and engineering, sales and marketing and manufacturing/trades, but primarily at the professional and technical level, not at the blue-collar level.

Nurses, childcare workers, cooks, hairdressers and butchers are also in short supply, according to the most recent skill shortage list published by the federal government.

But Malcolm Tulloch, the state secretary of the Construction, Forestry, Mining and Energy Union, said the labour shortage was a “furphy”. “It’s just a ruse to bring in foreign workers on cheaper rates and drive the wages and conditions down,” he said.

He conceded, however, that there was a problem in the way school leavers were being trained.

“Companies don’t commit to providing resources to train Australian school leavers,” he said. “There has been a neglect in this [area] for well over a decade and now Australia is feeling the pinch.”

The chief executive of the Australian Federation of Employers and Industries, Garry Brack, said Mr.

Tulloch’s comments were pushing the union cause, which relied on labour shortages to drive wages up. As the resources sector continued to expand, the construction industry in particular would suffer increased difficulties in filling jobs because of the higher wages offered by mining companies, he said.

Wilhelm Harnisch, the chief executive of Master Builders Australia, agreed, calculating that in the next five to 10 years, the mining sector would recruit an extra 60,000 to 80,000 workers, and those from the construction industry were a natural fit.

“With a building workforce of a million, it will certainly hit us hard,” Mr. Harnisch said. “It will not be as catastrophic as some are saying, but [it] is a concern.”

Of equal concern was the structural shortage within the industry, he said, as baby boomers retire from the physically strenuous industry and the dropout rate among apprentices continues to be as high as 50 per cent.

Mr. Harnisch said low starting wages, unmet expectations of school leavers and poor training were behind the dropout rate.

A spokeswoman from the Professional Hairdressers Association said her industry had a similar dropout problem, which had created a labour shortage.

“There are complaints about lower wages, but also a lot of salons don’t run their businesses like businesses,” the spokeswoman said. “They don’t really want an apprentice; they just want a helping hand.”
Robin Shreeve, the chief executive of Skills Australia, said there was an urgent need to better train the domestic population.

“We’re urging the government to put more money into tertiary and skills education,” he said. “Specialised occupations can take a long time to meet licensing and regulatory obligations, so short-term skilled migration has to be a balancing factor.”

Source: Sydney Morning Herald

By Seth Borenstein

How America gets people and stuff into orbit is about to be outsourced in an out-of-this-world way.

With the space shuttle’s retirement, no longer will flying people and cargo up to the International Space Station be a government program where costs balloon. NASA is turning to private industry with fixed prices, contracts and profit margins. The space agency will be the customer, not the boss.

At least when it comes to the routine part of going to and from the space station, NASA hopes to rely on companies that will be the space version of FedEx and Yellow Cab.

The company that has been leading the commercial space race is hoping to launch its privately built rocket and capsule to the space station late this year. It won’t carry astronauts, but if all goes well the unmanned ship will dock with the station and deliver food, water and clothing. And its major private cargo competitor may only be a month or two on its heels.

Getting people to orbit on a new American ship is a different story. Some ambitious companies hope to launch astronauts that way in three years, maybe four. Until then, the Russians will fly astronauts on a pay-for-play basis. Some space veterans like John Glenn, the first American in orbit, think five to 10 years is more realistic.

But two of the major players have surprised people before — the tech tycoons who founded PayPal and Amazon.
NASA has hired two companies — Space Exploration Technologies Corp. of Hawthorne, Calif., and Orbital Sciences of Dulles, Va. — to deliver 40 tons of supplies to the space station in 20 flights. The cost is $3.5 billion, about the same price per pound as it was during the space shuttle’s 30-year history.

“It’s time. Once NASA blazes the trail, creates the technology and it’s available for private companies to take advantage of, this is the time” for the private firms to take over, said NASA commercial cargo chief Alan Lindenmoyer.

NASA met with companies wanting to taxi astronauts to the station. The agency hopes the money it saves by not flying the shuttle can be spent on new deep-space missions that will send astronauts to an asteroid and on to Mars.

Six private companies are working with NASA to send ships to the space station — either unmanned cargo ships or eventually astronauts in crew capsules.

For well more than a decade, boosters of commercial space have said they are ready to take over the job of going into low-Earth orbit on their own nongovernment ships, but hadn’t done it.

Now one has: Space Exploration Technologies, which often goes by the name SpaceX and is run by risk-embracing PayPal founder Elon Musk, launched his unmanned Dragon capsule into orbit last December. Now his company is lining up for the first private visit to the space station. The lower and upper stages of the rocket are at Cape Canaveral, Fla. The capsule is almost finished.

“What we want to do is get back into space as quickly as possible and as sustainably as possible,” said former astronaut Garrett Reisman, who now runs SpaceX’s “Dragon Rider” program.

And maybe a month or two later, Orbital hopes to have its first test flight to the station. First, it has to finish building its launch site at Wallops Island, Va., which should be done in just a few weeks. Then later this year it will have a test launch of its new rocket, the Taurus II, and finally it will use that new rocket to launch its capsule, Cygnus, to the space station, said company spokesman Barron Beneski.

“Just like a person hires FedEx to deliver a package across the country and you pay him 50 bucks, we’re delivering a 2,000-kilogram package to space, a few hundred miles above Earth, for a fixed price,” Beneski said.

Four companies are building spaceships to take astronauts to the space station on a pay-per-seat basis. They are all constructing ships that would be launched on top of private rockets.

http://www.ctpost.com/news/article/Future-of-spaceflight-NASA-is-outsourcing-the-job-1480903.php

The global outsourcing industry, including offshoring and onshoring, is estimated to reach $464 billion in 2011, a 9.2-percent increase from 2010’s $425 billion. The year 2010 has seen stronger growth at 13.9 percent from 2009’s $374 billion.

This is according to the 2011 year-end forecast report of Canadian-based ICT research and advisory think tank, XMG Global as part of its mid-year review of the global outsourcing market.

The race to be the top offshoring destination continues in 2011 between China and India as providers seek other markets outside Europe and the US.

XMG Global said it estimates total revenue of the offshoring segment to amount to $144.8 billion.

India will capture 42.5 percent of the offshore market to reach $61.5 billion in revenues, while China will continue to lag India with revenues reaching $45.7 billion equivalent to 31.5 percent of the market, XMG said.

The Philippines will still hold the third spot with estimated revenue of $10.7 billion capturing 7.4 percent share, the analyst firm said.

According to XMG Global chief analyst Lauro Vives, “The US economy, which remains to be a large market for offshoring, is still on the road to recovery with a forecasted 2011 GDP growth rate of 2.6 percent, slowing down from last year’s 2.9 percent.”

The report added that Indian and Philippine providers, which are highly dependent on the US market, feel the effects of the US dollar depreciation. China, with a strong East Asian client base like Korea and Japan, is less affected.

The 2011 earthquake that hit Japan has only temporarily halted outsourcing contracts, XMG said. The disaster may in fact open more opportunities as Japanese companies consider increasing offshoring contracts for non-core operations to reduce business risk, it added.

China also has a stronger hold in the domestic BPO market. In 2010, more than 75 percent of service outsourcing revenue is from the domestic market. Chinese companies are looking at outsourcing locally as an option to compete globally, XMG said.

Indian outsourcers are also starting to realize the importance of the growing domestic market. Indian service providers such as Tata, Infosys, Wipro and Satyam, which used to shun the domestic Indian market three to four years ago in favor of higher revenues from the US and UK, are now looking to diversify their client base.

The Philippines is likewise taking steps to gain more of the offshoring market share from non-English speaking countries. The Board of Investments announced in July 2011 that it would be teaming up with IBM Philippines to conduct research and implement programs to build the multi-lingual talent pool of the country for business process outsourcing.

Vives concluded, “Given the continued growth of competition and increasing demand from other countries besides the US and Europe, XMG Global expects a sustained displacement and redistribution of market share not only between India and China but in other emerging outsourcing destinations such as Brazil, Mexico and Malaysia.”

Source: Newsbytes

Optus will supply Sydney Water with a range of fixed, mobile and managed telecoms services

By Hafizah Osman

Telco service provider, Optus Business, has signed a four-year managed services contract worth nearly $30 million to deliver whole-of-business telecommunications services to Australia’s largest urban water utility, Sydney Water.

The contract merges the telecommunication services delivery to Sydney Water from a multi-supplier to single supplier model.

Under the agreement, Optus will supply Sydney Water with a range of fixed, mobile and managed services.

This includes fixed and mobile voice and data carriage, Optus Evolve network connectivity for 67 Sydney Water sites, local and wide area network management, in-bound voice services to support contact centres and service management and maintenance.

The preliminary contract term is four years, with a condition to lengthen it for a further four years.
Systems integrator, Dimension Data, will be partnering with the companies to provide certain service components.

Optus Business managing director, Rob Parcell, said the collaboration with Sydney Water adds to its track record of offering outsourced and managed telecommunications services to enterprise and government.

“This is a strategic partnership that leverages our Optus Evolve and mobile networks to help Sydney Water deliver operational efficiencies,” he said.

Source: Arnnet

Telstra will send 160 jobs overseas as part of an ongoing company restructure.

A spokesman said some of the telecommunication giants administered services will be sent to India following a nine-month tender process.

“As a result of a long-standing tender, some administrative back of house functions are proposed to be performed by industry pundits based overseas”, she said she described it as a service ‘consolidation’ adding the move will be finalized within three months.

New hosted technologies could overtake traditional outsourcing model.

New cloud computing solutions are changing the nature of IT outsourcing in London and across the globe, an industry expert has argued.

According to Ellen Daley, vice-president at Forrester Research, traditional outsourcing is in its death throes and will be replaced by innovative new cloud-based technologies, Live Mint reports.

The IT specialist suggested that standard outsourcing projects are not achieving the cost advantages they used to, while hosted services are offering new efficiencies.

A recent study by Forrester found that the majority of its US and European clients are not saving the amount they expected through IT outsourcing.

Some also expressed frustration about the quality of work.

According to Live Mint, Ms. Daley also observed that more and more large corporations will turn to IT outsourcing in London to improve operations and cut everyday costs.

However, Jagdish Dalal, managing director at the Association of Outsourcing Professionals, recently argued that outsourcing is still a strong business decision that can be used to cut costs.

Source: iHotDesk

Your Taxes at work – the highlight video from the 2010 GCC Awards dinner.

By Eli Greenblat – Sydney Morning Herald

Myer chief Bernie Brookes.

Myer will nearly double its direct outsourcing of fashion, homewares and merchandise from China to $200 million.

MYER will nearly double its direct outsourcing of fashion, homewares and merchandise from China to $200 million a year by 2016 to help support its aggressive store roll-out program and profit from the growing proportion of sales generated by its Myer exclusive brands.

The MYER group already administered $70 million in outsourcing from the region with a $50 million contract with Li & Fung, the world’s biggest manufacturing-outsourcing company.

Mr. Brookes said Myer would soon open an office in Shanghai and a second in Hong Kong to co-ordinate the increase in outsourcing by Australia’s biggest department store with 40 staff in each location to be led by Myer’s general manager of sourcing, John Amm, who has recently relocated to China with his family.

A labourer at a textile mill in China, where wages and conditions for factory workers are surging, putting pressure on prices.

Much of the outsourced product will find itself in Myer’s exclusive in-house brands, which last financial year contributed more than 17 per cent of sales and are earmarked to keep growing as they deliver premium margins for the business.

China has long been a prime destination for retailers seeking cheap products to fill their shelves and aisles; however, Mr. Brookes warned that inflationary pressures in the burgeoning world power due to higher wages, evolving labour conditions and rising commodity prices could soon flow through to steeper prices at the checkout.

“They [factories] are all looking for price increases later in the year, for the next summer stock, and I think depending on how much cotton goes into a garment and depending on where the factory is [in China], we are going to see some inflationary pressure out towards the end of the year out of China,” Mr. Brookes said.

“When the new stock arrives, October, November, for summer, as that arrives it will be repriced at a higher level.”

Mr. Brookes, who has been travelling to China up to three times a year for the past 25 years, said on his recent visit with other Myer directors that he noticed a shift in labour costs and general working conditions.

“The biggest change I saw now is in labour laws, and you are now seeing people work 44 hours a week as the sort of mandatory hours, seeing people earn rates that have double and triple time when they work over the 44 hours and have Sunday shifts where they get double and triple time.

“So Western world labour laws have caught up with China, and we are seeing therefore an increase in labour costs, and increases in electricity, and that is what is putting the pressure on prices.”

William Fung, co-founder and head of Li & Fung, said recently that wages and conditions for factory workers were surging and he has predicted China’s overall wages bill would lift by 80 per cent over the next five years.

Apart from supplying Myer, Li & Fung does billions of dollars a year in work directly and indirectly for other retailers including US supermarket giant Wal-Mart and, locally, Coles and Woolworths.

Mr. Brookes and his board met with 65 suppliers in Shanghai, holding a conference and dinner at the Four Seasons hotel where discussions were held on moving $50 million in outsourcing currently undertaken done by Li & Fung to direct control by Myer, then on to new suppliers.

It was only the second time Myer had held a board meeting outside Australia, with the first held last year in Hong Kong.

The initial five-year contract with Li & Fung was signed in 2006 as Myer was cut away from the Coles Myer group and restructured by its private equity owners.

In Shanghai, Mr. Brookes and his team updated the 65 suppliers about Myer’s progress, retail conditions in Australia and the details surrounding the expiry of the Li & Fung deal.

Mr. Brookes said higher input costs for outsourcing manufacturers in China was a key theme of his meetings.

“[Factories] are having to pay more for labour, with overtime rates and minimum hours and standard rates, paying healthcare, and so an average employee would pay 44 per cent on costs to the government for pensions and sick pay and illness pay; a lot of those have gone up,” he said.

“Pressure on costs and entitlements, pressure on the base wage – and rightly so – seeing an increased standard of living of the factory worker in China, which I think is not only much needed but also quite exciting.”

Mr. Brookes said some outsourcing was moving geographically within China to keep a lid on rising labour and raw material costs.

“The cycle [in China] is enormous, changes every couple of years, and the changes I have seen is a move away from the Pearl River delta area, which is the south China area, and everybody is moving north where the electricity prices are cheaper, where the cost of resources and labour is significantly cheaper and there are a number of incentives by some of the local governments to relocate factories.”