An ongoing shortage of high-level skills means that Australia’s labour market is yet to find balanced ground, according to our latest Hays Global Skills Index. The question being asked is “can it deliver the high-skills needed?”
The Index, which assesses the efficiency of the skilled labour market in 30 countries, or its ability to supply skilled labour, found that in Australia the labour market is still not producing the right skills pipeline.
The Index scale ranges between 0 and 10, with the higher the Index score the greater the difficulty for employers in findings skills. A score greater than 5 indicates skill shortages; less than 5 indicates few if any signs of skills shortages.
The score of 5.5 for Australia suggests employers face difficulty when recruiting for high-skill jobs.
As the Abbott Government settles down here in Canberra, boosting employment should be a priority. But central to this is arguably the biggest thorn in the side of Australia’s labour market: the ongoing shortage of higher level skills.
Yet while unemployment is expected to rise in 2014, as confirmed by Treasurer Joe Hockey earlier this month, employers still struggle to attract highly skilled and experienced professionals.
It is a bitter paradox caused by employers being unable to find the skilled workers they need, particularly in more technical areas such as IT, construction and engineering. Demand is not evident in every function in every region of Australia, but we are seeing sustained demand for high-skill professionals.
So instead of a balanced labour market where employers can easily recruit, retain or replace their key talent at generally prevailing wage rates, a shortage of professionals for jobs in high-skill industries and high-skill
the job market needs to deliver the talent necessary for businesses and ultimately societies to thrive.
occupations is still evident.
Skills gaps can manifest themselves through wage pressures, a talent mismatch and/or supply. Our Index looks at all three areas. Of interest in Australia are the three scores for wage pressure.
Australia’s high ‘overall wage pressure’ score of 7.1 shows the country is expected to face overall wage pressures above historic norms. We expect to see growth in wages across the whole economy, after allowing for inflation. While overall real wage growth is expected to be down slightly from last year, this indicator continues to add upward pressure to the overall Index score of 5.5 for Australia.
There is also a widening in pay differentials between high and low-skill industries, as the score of 8.0 for ‘wage pressure in high-skill industries’ shows. New Zealand received the highest score possible of 10.0 for ‘wage pressure in high-skill industries’, exacerbating the problem for this part of the world.
Australia is also seeing a widening gap in pay differences between high-skill and low-skill occupations, as indicated by the score of 6.0 for ‘wage pressure in high-skill occupations’.
According to Hays, in Canberra the top five skills in most demand are:
In summary, the job market needs to deliver the talent necessary for businesses and ultimately societies to thrive. It is critical for Australian education authorities and businesses to work closely to ensure the education system is designed to provide students with the skills that their future employers require.
The Hays Global Skills Index can be viewed at www.hays-index.com/2013
For your copy of the 2013 Global Skills Index, please contact Jim Roy Hays in Canberra on 02 6257 6344. www.hays.com.au
