Skills Shortages In Australia
Skills Shortages In Australia
According to a recent survey by the Australian Bureau of Statistics (ABS), around a quarter of Australian businesses reported that they were unable to find suitable staff to fill existing vacancies.
When asked about the reason behind this, 74% of businesses mentioned a lack of applicants, and 66% said that applicants did not have the required skills for the jobs.
The results of this survey show that this shortage is not limited to a narrow range of industries. 38% of businesses in the accommodation and hospitality sector reported great difficulty in finding employees with the right skills. Similarly, 37% of utility services, 36% of repair and maintenance, 35% of manufacturing, and 32% of construction companies mentioned that they were facing a similar issue.
The data, therefore, is clear on one thing: the Australian economy is currently facing a skills shortage across most major sectors. Unless this gap is bridged quickly, it will slow down the growth of important industries and hamper innovative ventures aiming to maintain Australia’s position as a technologically advanced nation.
Let’s dive deeper into the skills shortage to understand what skills businesses are having a tough time sourcing for, and how this entire situation developed.
What are the most in-demand skills?
The Australian Government announces a Priority Migration Skilled Occupation List (PMSOL) every year to highlight the most in-demand professions in the country that require skilled migrants to meet that demand.
The latest list consists of 44 occupations that are required to support Australia’s recovery from COVID-19. These occupations generally fall into the following categories:
Nurses and medical staff: for aged care, critical care, emergency, mental health
Software programmers: application engineers, full-stack developers, UX designers
Construction workers: project managers, surveyors, technicians
Pharmacists: hospital, industrial, and retail pharmacists
Management professionals: managing directors, management accountants
Skilled trades: chef, cartographer, veterinarian
Engineers: mechanical, electrical, civil, mining, petroleum, and transport engineers
Has the foreign workers gap had an impact?
The Australian economy depends on a large number of foreign workers, i.e. people from overseas working in Australia on temporary visas. Along with that, industries also rely on skilled immigrants to make up for the short supply of skills and workers.
However, as the first few cases of COVID-19 started appearing in Australia, the government pursued a policy of imposing lockdowns and closing both national and state borders in a bid to curtail the spread of the virus and keep Australians safe.
As a result of this, hundreds of thousands of foreign workers have left Australia in the last 18 months, and there has been an 85% fall in net overseas migration in 2020-21 as compared to the migration levels in 2018-19.
All of this means that there has been a sudden reduction of the labour force (both skilled and non-skilled) available to Australian industries, which are now facing shortages and operating at less than full capacity.
The contribution of rapid growth and investment
Although the foreign workers gap has significantly impacted the shortage of skilled labour in Australia, it is not the only factor contributing to the shortage. Several Australian industries have also been experiencing a considerable rate of growth, raising the demand for trained and skilled workers in those sectors.
The rising care economy
The healthcare industry of Australia has grown tremendously over the last few years due to the ageing population, and this growth does not seem to be slowing down anytime soon.
In the next 50 years, the country is expected to be spending twice as much as it does currently on healthcare per person, and three times as much on aged care per person.
Consequently, registered nurses, doctors, mental health professionals, and other healthcare workers are consistently short in supply in Australia.
Large-scale investments in the growing manufacturing industry
In the wake of the damage caused by COVID-19, the Australian government decided to strengthen the country’s economy and make it more resilient by investing heavily in the manufacturing industry.
The $1.5 billion Modern Manufacturing Strategy announced in October 2020 aimed to provide support to weakened industries and fund innovative R&D projects that would make the industry disaster-proof and give Australia a competitive advantage in the global market.
Spurred on by support schemes and the availability of investment opportunities, the manufacturing industry staged a remarkable comeback, achieving the highest PMI (Performance of Manufacturing Index) in February 2021 since March 2018, i.e. before the pandemic began.
A huge proportion of the skills shortage faced by the manufacturing sector can be attributed to these factors. With more R&D projects kicking off and industries expanding production, there is a greater demand for highly skilled professionals to fill the available vacancies.
As more people get vaccinated and the government moves to ease border restrictions, part of the skills shortage in Australia will be dealt with through the influx of foreign workers and immigrants.
However, stakeholders at all levels - government bodies, manufacturers, educational institutes, and workers - will have to plan and adapt their policies and decisions to meet the changing demands of Australia’s rapidly growing manufacturing sector.
At Segen, we are committed to playing our role in bridging this skills shortage. With a vast network and tailor-made recruiting solutions, Segen is poised to help organisations find the right talent to help them succeed and grow.