Mobilising Defence’s forgotten external workforce

Mobilisation is suddenly important, not least because the new Strategic Defence Review “must outline the investments required to support Defence preparedness, and mobilisation needs to 2032–33.” In board terms, mobilisation involves quickly expanding Defence and sharply increasing its rate of effort. The government considers that Australia may no longer have 10 years warning of a conflict and a war might happen in a much shorter time frame. All this is made painfully real by the war in Ukraine where the Ukrainians are rapidly mobilising while under fire and with 15 to 20 per cent of their country occupied by Russians. 

The Review will undoubtedly consider ADF expansion, but this would miss a crucial part of modern Australia’s defence capability. Australia, like many other countries, has chosen to outsource numerous functions that in last century’s wars were undertaken by uniformed personnel. Any future force expansion undertaken will now need to also greatly expand the external workforce undertaking the many outsourced functions. Marcus Hellyer’s latest budget analysis shows that Defence relies on a so-called “fifth service”, an external workforce of some 35,000 that comprises contractors, consultants and service providers. This is about 30 per cent of Defence’s total workforce. 

In a big war, such as a rerun of World War II or as Ukraine is experiencing now, history suggests the overall defence workforce can only grow to about 10 per cent of the size of the overall population. For Australia, that translates to an expanded defence external workforce of about 760,000. For planning purposes, Australia’s defence external workforce in a time of mobilisation will fall between todays’ peacetime 35,000 and a worse case of 760,000.  The Strategic review then simply has to set out how such an expansion will take place.  

This expansion will involve a mix of retaining those already in it when mobilisation begins; making the best use of the staff available; and lastly bringing in more from the wider society. 

Retaining fifth service staff during a mobilisation may be more difficult than it first appears as Australia’s defence industry will be expanding as well and will be in need of skilled workers. Poaching would be rife. Government regulations could be devised to limit staff movement between the fifth service and those favoured defence industry companies that accord with overall strategic priorities. However, this does represent a considerable constraint on individual freedom of employment and would be unpopular.   

A different path might be using the UK’s sponsored reserve model. Many support and some combat-enabling functions of the British armed forces are outsourced with some deemed potentially critical during times of crisis or conflict. Companies that win such tenders can have, as a contract condition, that they guarantee service provision through specified key employees having to be reservists. On mobilisation, the individuals would stay in the same positions but become uniformed staff to avoid being vulnerable to poaching. 

The middle ground in an expansion is to make the most effective use of the staff already employed. Steadily improving productivity can mean getting more output from the same numbers of people and thus avoiding the requirements to bring more staff on board during a mobilisation. 

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There is an unspoken assumption that companies undertaking outsourced defence work will invest to raise worker productivity; but with these contracts often only several years long, the necessary investment may not bring an adequate return on the capital used and not occur. Moreover, the next tender issued for the work several years later could be written using the first as a template and overlook requesting productivity improvements. By that time, the staff writing the successive government tenders will have little understanding of the outsourced function, and are unlikely to be aware of the latest technology or productivity improvements being used for such tasks. Outsourcing can unintentionally lead to productivity stagnation.

The most obvious source of new staff is from overseas although there are issues such as availability, suitable skillsets and security clearances. However, bringing in migrants to work in other similar industries across society may free up their workforces to then move into the defence sector. For example, bringing in aviation engineers from offshore to maintain civilian aircraft might release engineers with an Australian citizenship for defence work. 

In this, skilled Australian workers are unlikely to move between states for employment for protracted periods and so taking work to these workers may be needed. A distributed workforce model may be necessary and while there are management and technology challenges, being able to access those living in non-traditional locations may open unexploited workforce resources.

In any mobilisation, the supply of people with experience of the defence sector will be quickly exhausted. Bringing new staff into defence will require them to complete rapid training programs. Ideally, these would be focused on solely what was essential for them to undertake the position they have been employed for. For this, the technology of the emerging fourth industrial revolution (4IR) could help to expedite training including through large online learning packages possibly using virtual and augmented reality. This would be a sizeable undertaking to prepare, but bring real benefits in speed of mobilisation.

This is not 1942 when Japan attacked. Society and Defence are different. Mobilisation will involve expanding Defence’s external workforce not simply World War II’s widespread conscription. The Strategic Defence Review will need to at least define the scale and nature of the problem. In this, there is a big role for the companies providing defence’s external workforce to think about the issues involved in some future rapid expansion. Leaving until war begins may be rather too late.   

Dr Peter Layton is a visiting fellow at the Griffith Asia Institute, an associate fellow at the Royal United Services Institute and the author of Grand strategy.