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‘Global war for talent’: Australia’s great skills shortage

·6-min read
Busy foot traffic crossing a road in the Sydney CBD and the empty streets at the Rocks in Sydney showing the Harbour Bridge in the background.
Employers are facing a massive issue in 2022, with a severe lack of skilled workers. (Source: Getty)

COVID-19 has brought many challenges, but as the nation comes out of lockdowns and the economy is able to reboot, will we be able to keep up?

Yahoo Finance wrote about the ‘brain drain’, where skilled workers were leaving the country to seek opportunities abroad in July and then The Great Resignation back in August.

Both of these events have culminated to bring us here, where we’re faced with a major worker shortage, and the reopening of borders is not going to be enough to fix the problem.

This is an issue that is plaguing employers all over the world, across many different industries.

How did we get here?

This is not a new issue, just one that was simply exacerbated by the pandemic and closed borders.

In fact, Megan Lilly, executive director at AiGroup, told Yahoo Finance a shortage of skilled workers was an ongoing issue for Australia.

“There were already some difficulties in getting the right skills, in the right place, as needed,” she said.

“Some of it was the lack of availability of specialist skills or technical skills. Some of it was labour difficulties just more broadly. And then came the pandemic.”

Lilly said a number of changes happened very quickly when the pandemic hit. One was that companies were forced to digitise at a significantly faster pace than they would have normally.

For some, this meant making technological changes that would have normally taken them five years to do in just one.

This, in turn, led to a much greater need for workers skilled in these digital areas - workers Australia simply did not have.

The second thing that happened was, of course, the closing of the international border.

“We lost our international students and backpackers and at the same time we had people leaving the country, whether it be to find a new opportunity or to return to their home country,” Lilly said.

“So there was a net outflow.”

A concept to illustrate the daily impact of the Covid-19 virus on the public as a whole. A static sign displays messaging regarding the pandemic.
COVID-19 lockdowns heavily affected workers ability to travel for job opportunities. (Source: Getty)

What industries are impacted?

It’s a broad spectrum, with more than half (52 per cent) of Australia’s business leaders saying it’s more challenging to find qualified employees now than pre-COVID.

“While there currently might be no shortage of job opportunities in the Australian professional sectors, there is most certainly a shortage of talent,” Nicole Gorton, director of Robert Half, said.

“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.”

The hospitality industry has also been heavily affected by lockdowns, and even a large business like Guzman and Gomez (GYG) has struggled.

“In our 15 years at GYG, we’ve never seen worker shortages like the ones we’ve seen in the last two years of lockdowns,” GYG CEO Steven Marks told Yahoo Finance.

“Right now, we’re in the middle of the biggest recruitment drive we’ve ever carried out in the history of GYG and, yes, it’s because of our incredible growth, but it’s also because of the international border restrictions that COVID forced Australia to put in place.”

Guzman y Gomez fast food outlet and drive through
Guzman y Gomez has been profitable throughout the pandemic but worker shortage are still causing issues. (Source: Getty)

With the hospitality industry being a major employer for international students and workers, it is no surprise the closing of the international border has caused major issues.

But it’s not just hospitality that has taken a hit. Highly specialised skills are needed as well and that is why it’s so difficult to find people to fill the roles.

“There is a pretty significant shortage of engineering occupations across the economy right now,” Lilly said.

“And the issue with that is you can’t just turn the tap on and develop engineering skills, you need to invest in the pipeline. So we need a strong sustained strategy.”

What can we do to fix the problem?

Obviously, the reopening of international and state borders will help relieve some of the pressure, but it’s not the complete solution.

“We’re coming out of those lockdowns and so people will be able to move more freely to chase job opportunities,” Lilly said.

“But the reality is that we have more jobs than we have people to fill them. So we have a very significant skills shortage emerging for 2022. It will be quite acute.”

The most recent jobs data revealed 138,000 jobs were lost in September, but the most recent Vacancy Report found there were 228,988 available positions nationally.

So there are hundreds of thousands of jobs available, it’s just that there is no-one to fill them.

Marks said part of the issue was Australians being unsure about re-entering the workforce after the events of the past 18 months.

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“Reopening borders is definitely going to help,” he said.

“The other pieces to the puzzle are building confidence locally with job seekers who might be tentative to re-enter the job market, and also attracting international workers to join the hospitality industry in Australia by making more opportunities in skilled roles more accessible to more people.”

But Lilly believes we also need to look at providing more opportunities for people to learn or upskill.

“We really need to focus on building that training and education pipeline to develop more skilled employees, and that needs to continue to be built up over the next few years, not just as a once off,” she said.

“And we also need to really help university graduates to gain skills directly from the workforce to make their transition really efficient.”

What does 2022 look like?

Lilly predicts there will be an acute shortage of workers.

“There is going to be a global war for talent, so we really need to get ahead of that,” she said.

“We need to invest in not only our young people but our existing workers, and offer them upskilling, reskilling and career transition opportunities that keep people effectively engaged in the workplace.”

And, Lilly said, if you combine a strong investment in the workforce with Australia's (generally) favourable weather and desirable lifestyle, we may stand a chance against other nations.

“Australia has a lot of natural advantages,” she said.

“We have good and meaningful jobs, it is a good place to live for a number of lifestyle, personal and professional reasons. But we'll need to be quite proactive.”

How well Australia will be able to compete on this global stage will depend on the investment we pump into the workforce now.

But if you were thinking of changing industries, now might be the best time to re-skill in an area where you’ll be in high demand.

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