Insight: How to tackle the skills shortage crisis

If anyone had any doubt that 2022 has been a tough year for employers, even a quick glance at the latest National Skills Commission report would have been enough to set them straight. Contained within the pages of this year’s Skills Priority List was a set of statistics that reinforces why so many businesses are struggling to fill roles and forcing some to reduce operating hours and reconsider growth ambitions.

The report revealed the number of occupations struggling to fill positions had almost doubled from 153 to 286 in only a year, meaning nearly a third of all Australian sectors are facing serious worker shortfalls. Furthermore, job vacancies grew more than 40% to 309,900 in 12 months and created an environment where more than half of the 20 largest employing occupations are facing serious labour shortages.

Little wonder the National Skills Commission has warned Australia is facing a “staggering” skills shortage, with almost half of all businesses reporting they are increasing wages, salaries or bonuses for existing staff to mitigate workforce shortages.

What is causing the skills shortage?

While the likes of the McKinsey Global Institute were raising concerns about a pending global skills gap as early as 2017, the COVID-19 pandemic has expedited its arrival.

On the back of border closures and travel restrictions, Australia experienced a net outflow of almost 89,000 people in the 2020-21 financial year – the most number of people to leave the country since World War I. This included huge declines in international students and working holidaymakers who traditionally bolster lower-rank roles, while the number of temporary skilled migrants also fell significantly.

This has been compounded in recent times by social phenomena such as The Great Reshuffle and The Great Resignation that see many people reconsidering their approach to work, life and careers. Be it swapping old jobs for new, exploring study opportunities or taking time out from the workforce altogether, the result is the same for employers – an increasingly difficult recruitment market and all the headaches that come with it including:

• being forced to pay higher wages;
• an inability to scale operations;
• the need to put growth or expansion plans on hold; and
• profitability concerns due to all these factors.

How to combat the skills shortage

Rather than dwelling on the negatives, proactive businesses should consider the current climate as a chance to think outside the square when it comes to workforce management.

Invest in training: the best job candidates are often those right under our nose. Offering training to existing employees is a great way to fill gaps across an organisation and has the added effect of boosting morale among team members. Promoting one’s commitment to training is also a great advertisement for potential recruits.

Implement a referral program: depending on the size of your organisation, you may have access to a significant number of colleagues waiting to help you fill vacant positions. Word of mouth remains one of the best kinds of advertising so look to promote an internal referral program that rewards team members for recommending potential hires or reaching out to their networks.

Consider a remote worker: imagine filling a role without worrying about the likes of recruitment, compliance, payroll and HR matters. Innovative firms such as Flexhive are making that a reality by placing highly curated, highly qualified and work-ready remote talent into roles at a third of the cost of contingent hiring locally. All you have to do is choose the right candidates from shortlisted profiles and use a simple step-by-step guide to integrate them into your business.

Summary

The combination of the skills gap, labour shortages and wage pressures means finding quality candidates is not going to get easier any time soon. For that reason, businesses need to adapt to the changing times and tailor their recruitment and retention strategies to meet the realities of the modern landscape. Whether it’s identifying and nurturing internal talent or teaming with an external specialist in remote workers, the time for innovation is now.

Download your free 2023 Labour Market Trends Report from here.

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