The skill shortage – how bad is it?

Everyone from the local newsagent to the Prime Minister is talking about it.  But what do they really mean?  What skills exactly are in short supply?  If we can identify the problem, why can’t we do something about it?

We need to look at different industry sectors to gain a greater understanding of where critical shortages lie.  It is also possible to identify geographical regions of Australia that have particular needs.

Skill shortages are fuelled on a number of fronts.  A growing economy with low unemployment, the growth of new or structural changes in existing industries and the ageing of the workforce all have a massive impact on the skills and dynamics of the labour market.

The Department of Employment & Workplace Relations surveys industries across the country and finds in many cases nationwide shortages of skilled labour. 

Shortages range from childcare workers, to accountants, nurses and health specialists, teachers and workers in the engineering, electrical and construction trades.  Information and communication technology skills come in for a significant mention.

Process and systems management, database, risk and customer relationship management are prominent ICT sectors displaying a shortage of skilled practitioners.

It should be noted there is a difference between a shortage of trained or qualified labour and a difficulty in recruitment. 

Recruitment difficulties can occur even when there is a supply of adequately skilled candidates.  This phenomenon can be due to the level of remuneration and other working conditions, location of the employer, hours of operation or general perception of the industry or employer.

The research done by the Department of Employment & Workplace Relations was undertaken in March and July 2006.  It revealed recruitment difficulties for business skills and some ICT streams outside the main business capitals of Melbourne and Sydney. 

A major problem for the economy occurs when recruitment difficulties extrapolate to skill shortages.  Due to poor perceptions of particular occupations, young people are no longer attracted to undertake study or training in the field.  Teachers and childcare workers are a good example.

There is no doubt the skill shortage in Australia is serious.  And it will only worsen as the skilled, older workforce moves into retirement.  Skilled trades people in particular will be in short supply. For example, the average age of brick layers is currently 50.

Targeted training programs are underway, but the lead times involved and the presence of a top-heavy older workforce, constrain efforts to bridge the gap.

Employers must respond by investing in the training and development of their existing workforce.  Share workplace knowledge and encourage promotion from within.  HR managers must design strategies to retain the older element of their workforce beyond the minimum age for retirement.

Employers must also honestly assess their own operations and recruitment efforts.  Is it a true skill shortage they suffer or a recruitment difficulty?  How does their remuneration structure, work conditions and reputation stack up?  Action in these areas might open up a pool of previously dismissive, but qualified candidates.