Australia is currently in the middle of a severe skills shortage as the country grapples with job vacancy rates 46.5% higher than February 2020, prior to the start of the pandemic. New research by specialised recruiter Robert Half shows more than half (52%) of business leaders believe it is more challenging to find qualified employees compared to pre-pandemic conditions.
Coming into the new year, bridging the skills gap will be a matter of urgency to sustain business recovery, but COVID-19 continues to present major challenges to businesses. Nearly half (47%) of business leaders believe the pandemic has increased the skills shortage in Australia, and this rises to 54% among CIOs. Only one-third (33%) of business leaders believe that the availability of skills has remained at the same level as before the pandemic.
Employee caution and business growth creating increased competition for talent
As businesses continue to prioritise vital digital transformation and recovery, attracting and retaining niche skillsets will be a top priority in a tight and competitive talent pool. At the same time, the reduced flow of foreign talent is placing mounting pressure on the limited domestic skills supply to fuel business growth initiatives.
Increasing competition for talent is the top reason for the rising skills shortages according to almost two thirds (63%) of Australian business leaders. More than half (54%) refer to the increased demand for specialist skills to explain the rising skills shortages, followed by existing skillsets not keeping pace with digital transformation (23%), and an inability to recruit overseas talent (23%).
Employee acquisition and upskilling key to bridging talent gap
A third of businesses (34%) say the need for new skills is the top mid-to-long-term consequence of the pandemic for their recruiting strategy, fuelled by COVID-19’s acceleration of digital transformation. As new and more advanced transformation initiatives become a top priority for businesses, there has been rising demand for new skills to support the transition to remote working for entire workforces and the virtualisation of existing services.
The preferred method to close the skills gap for more than half (51%) of Australian business leaders is hiring additional full-time employees. However, as existing employees favour the security of their current employer and the flow of foreign talent is limited, 41% of businesses are turning to their available talent stack by reskilling existing employees through internal training and professional development initiatives.
“While there currently might be no shortage of job opportunities in the Australian professional sectors, there is most certainly a shortage of talent. Until the flow of foreign talent is reintroduced back into the Australian labour market, employers will continue to be challenged by demand for specialised workers exceeding the supply,” says Nicole Gorton, Director of Robert Half in announcing Robert Half’s latest survey results.
“In the short term, without a steady flow of migratory skills, companies with robust and competitive remuneration strategies, well-rounded hybrid capabilities, cutting-edge technology stacks that are in-line with global standards – particularly for technology professionals – as well as clear succession and career development strategies in place will be well positioned to forge ahead in the race for local talent. Above all, businesses should streamline their hiring processes to become more efficient and transparent, so they stand the best chance of securing quality candidates ahead of the competition.”
“With high competition for talent unlikely to relent any time soon, businesses should hire permanent employees on attitude, behaviour, and potential. They should recruit from a talent pool of candidates whose skills levels are slightly less developed than the role requires with the intention of developing technical capabilities internally through upskilling and professional development. While providing training and upskilling initiatives will improve the chances of successfully futureproofing the workforce, it’s also more cost-effective than hiring new employees and known to increase employee satisfaction, engagement, and retention,” concludes Gorton.