Skill Shortages: The Australia Story

Global Employability

For governments and businesses, trying to formulate the right labour policies is like, as an EY article described it, trying to arm wrestle with an octopus–there are just too many arms! Policymakers will have to negotiate among existing skills in the country, potential skills that will emerge from within the country, and fill the gaps with the migration of skilled workers.

A structural gap

Since BP (Before the Pandemic, if you are wondering), Australia has been one such country that has been dependent on the migration of skilled workers to meet its requirements. While this is good news for prospective global students and professionals, Australia has been struggling with a severe structural shortage even before the days of COVID.

It is natural to wonder why. Australia is the home to some of the top universities in the world across disciplines. Students from all over flock to the land down under just to experience university life there. Then why this structural shortage?

Economists Masters, Barnaba, and Mecmenamin suggest a few reasons:

  • A noticeable mismatch between the skills available and those required
  • Overqualified graduates from top universities who are looking for prospects abroad, and
  • Low occupational mobility

Adding COVID to this…

The cracks in the system were exacerbated by border closures. The gaps are so wide that it could cost its economy $10 billion in the next four years. To this, you add health issues, pandemic fatigue, and isolation requirements, you will realise that the workforce has been massively hit. 73 % of Australian businesses expect that they will have difficulty finding and retaining skilled labour in 2022. Experts fear that the widening gap will make the economy sluggish in the upcoming years.

Sectors affected

  • Health
  • Engineering
  • Trade
  • Digital Skills

The concern is that if the country doesn’t start addressing these gaps now, the ramifications of it will be felt well into the next decade. It takes 3-4 years or more to get the necessary educational qualifications plus the time it takes to master the actual skill.

The gap in digital and soft skills is all-pervasive. If an organisation or an employer is confident that they would not face a digital skill shortage in the next decade, they are probably underestimating how much digital and data skills will take over. A study published by an Australian consulting firm, Korn Ferry has shown that the digital shortfall can go up to 2.2 million in 2030.

Way ahead…

Essentially, Australia is in need of a solution that is both sustainable and scalable. Skill imports and migration is only a band-aid. Short specialised technology courses and certifications, support from organisations and the government seem to be the way ahead. With such a large mismatch, conscious investment into skill development, at the government and organisational level to build domestic talent is becoming increasingly essential.

For the migrant populace, protective policy measures can retain skill and talent in the country. Going beyond temporary work permits (Temporary Skill Shortage Visa is a real thing!), offers of permanent residencies, easing dependent visa applications will go a long way in retaining international talent in the country.

Date added

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Global Employability


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