Skills shortages are again looming large as a major risk for business and pose real problems for companies in terms of production and service delivery – a situation which is forecast to intensify as businesses work hard to mitigate the risks.
Recent research into more than 400 companies found that more than one-third believe there is a high to extreme risk of skills shortages negatively impacting on businesses operations this year. This level of concern increases to almost half of all companies by 2015.
“While skills shortages have never totally gone away, they are set to intensify with a vengeance and are arguably the number one threat to our economic growth,” said Heather Ridout, chief executive of Ai Group, which conducted the research in conjunction with Deloitte.
While companies learnt painful lessons from past downturns and hoarded their skilled staff, the magnitude of the problem today requires new strategies and renewed effort at a whole new level, the research suggested.
“Of particular concern is that shortages are intensifying in occupations associated with manufacturing, construction and engineering, which are pivotal to the Australian economy. These occupations are based on skills which have a long development lead time, are in high use across the economy and whose absence puts industry at high risk,” said Ridout.
While managing skills shortages is a high priority for almost 40 per cent of businesses, they also believe that investing in skilling is a shared responsibility between government, business and individuals, she added.
Regional managing partner of Deloitte Consulting Asia Pacific, Gerhard Vorster, said the credit crunch was a mere blip compared to the chronic skills shortage that continues to restrict Australia’s growth potential.
“Despite the lack of talent, standing still is not an option. CEOs committed to driving growth need to win the race for talent or risk being overtaken by the competition,” said Vorster, who recommended undertaking a workforce planning review to identify the critical skills employers require now and in the future.
“The good news is that Australia’s education and training providers are keen to collaborate with business to help secure a pipeline of skilled talent,” he said.
“While addressing the supply of talent, employers must also address their own demand. Those that fail to innovate around processes, systems and working practices are going to face a very bleak future.”
According to more than half of businesses, the reason for these vacancies is a lack of both the occupation specific skills and the underpinning skills and experience among applicants, which is “hugely frustrating to business”, according to Ridout.
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