New research by Hays has found 88 per cent of organisations in Australia are experiencing a skills shortage, 78 per cent of employers believe the skills shortage will impact the effective operation or growth plans of their organisation, and 40 per cent say the impact of skills shortages has intensified in the past 12 months.
Employers say the impact will be greatest on productivity (63%), increased workloads for existing staff (62%), project delivery (59%), growth and or expansion plans (49%), employee engagement and morale (46%), employee turnover (44%), revenue and profit (41%) and customer service (also 41%).
The key drivers of the skills shortage, according to employers, are a lack of people with the necessary qualification/s or experience (77%) and increased competition from other employers (64%).
“Australia’s skills shortage narrative is well entrenched in our labour market, but this year our survey shows its impact continues to intensify in many industries,” says Matthew Dickason, CEO Asia Pacific at Hays.
“There’s growing concern among employers about the lack of skilled professionals in today’s labour market. Despite these challenges, vacancy activity remains remarkably resilient. After normalising from last year’s historic peak, today’s headcount expansion plans suggest current economic uncertainty will not impact all workforces.
“It’s clear we’re heading for a skills recession as a shrinking talent pipeline threatens the effective operation and growth plans of organisations.
“With the skills shortage predicted to last well into the 2030s, employers must guard against the long-term impact.”
How employers are addressing the skills shortage
There are some common steps employers are taking to address the skills shortage, with three quarters of employers offering higher salaries than planned to attract skilled candidates.
In addition, 62 per cent are upskilling staff to help overcome skills gaps, while 37 per cent are considering employing or sponsoring overseas candidates, up from last year’s 7 per cent.
Diversity, equity and inclusion initiatives, streamlining the recruitment process and improving employer branding are other strategies employers have adopted.
“While investing in their own strategies is crucial to remain competitive, employers must take a wider view and work together to address the skills shortage crisis,” says Matthew.
“The issue of skills shortages isn’t specific to one organisation or industry but is a systemic problem impacting the entire labour market. We must shift mindsets and collaborate to address skills shortages collectively.
“These findings highlight the need for employers, the government and educational institutions to work together to address the root causes of the skills shortage and build a strong future workforce.”