Sometimes, North Queensland business owner Aymon Vagulans thinks: “What’s the point of having a business?”
Skills shortages, stifled productivity and the rising costs of power all contribute to a perfect storm that’s crippling many in his shoes.
Mr Vagulans, General Manager of NEM Group, a Townsville-based steel processing and fabrication services company, said: “There needs to be more incentive for small-to-medium businesses to want to be in business.
“It’s getting harder and harder to make a dollar. Everyone looks at you and says: ‘Look at this facility you’ve got, you’re turning over millions.’
“Turnover may be high, but the profit margins are low, owing to the rising costs of production.
“There’s not as much incentive to run a business as there used to be.”
“Trying to get skilled workers into the country is so hard,” Mr Vagulans said.
There are that many taxes and levies. It seems like at every step, there’s another hurdle.
“We went through the process last year of trying to bring some skilled workers in, and it all became too much and too expensive.
“We ended up pulling out, even though there were potential candidates.
“A cost-effective, user-friendly system to bring skilled workers into the country would go a long way towards fixing our shortages of skilled labour.”
It doesn’t help that fewer companies are putting on apprentices these days, Mr Vagulans said.
“We put on three to four a year, so we’ve always got anywhere from between 10 or 12 apprentices at any one time at various levels: first, second, third and fourth years.
“Some big companies in Townsville used to put on 50 to 60 a year. They're not doing it anymore.
“While there is funding and subsidised training, there needs to be more incentives around putting on apprentices.”
The other side of the apprentice problem is finding young people “willing to do the hard yards and the trades we're offering”.
“There aren’t as many ‘kids’ as there used to be who want to engage in that type of work,” Mr Vagulans said.
“Then you have to get these apprentices through their training — up to four years — and then hopefully retain them for a year or two after that, so you get some benefit out of putting them through, which is not always the case.
“We're at the point where if we can get a couple of years out of them, that’s great, and if we can’t, we go: ‘At least we've developed another tradesperson, and they’re in the industry now.'
“Hopefully, they’ll cycle back through at some stage, and we get that benefit back.
“We’re doing the best we can to fill our skills shortage.”
The upshot of these problems — the hurdles with skilled migration and the need for further incentives to take on apprentices — is a hit on business productivity.
“You can't complete as much work as you’d like,” Mr Vagulans said.
“You could put more work through your facilities if more labour was available, but you can only take on the work you can facilitate.”
Mr Vagulans has been with NEM Group for about 18 years. He joined the company as a first-year apprentice when he was 24 after seven years’ military service and worked his way up the ranks to become a part owner.
“Ten years ago, or even further back, there was enough work to go around, everyone made good money and there were enough workers,” he said.
“You didn't have the competitiveness between companies that exists now, where workers are being poached, and profits are decreasing with companies undercutting each other to get work with the slimmest of margins.
“There’s a certain-sized resource pool, so everyone’s fighting for the various trades: boilermakers, fitters, electricians etc.
“You’re paying higher rates to retain workers to do the work.
“Everyone’s in the same boat.”
“Energy costs are another big issue, and they continue to increase,” Mr Vagulans said.
“As a manufacturing business, we’re a high-energy consumer and get absolutely smashed when it comes to power bills.
“There's no respite there, and it doesn’t look like prices are going to go down anytime soon.
“If making power cheaper isn’t an option, businesses need help with batteries and storage.
“Something needs to happen; companies can’t keep absorbing this cost.”
“Sometimes you think: ‘What’s the point?’ At the end of the day, after you’ve paid your bills, what’s left over? Not much.
“There’s a lot of work to keep the doors open.
“But, we do. That’s 65 people from reception and admin to HR and accounts, operators, trades and truck drivers.
“Put a couple of businesses like ours together and you’ve got 1000 workers.
“We need the sort of changes that keep these businesses healthy and open for business.”
Aymon Vagulans spoke to Ai Group Communications Manager Wendy Larter
