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Skills shortage looms large, says Deloitte

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Where is your next worker, asks Deloitte in its recent discussion paper urging businesses to think ahead and prepare solutions for the impending skills shortage.

“A new reality looms,” says Deloitte CEO Giam Swiegers. “The problem in Australia over the coming years won’t be a lack of jobs – it will be a lack of workers.

The smarter companies and businesses are already planning ahead and creating work structures which can adapt to changes in the workforce.

“Leading organisations have already realised this and are engaged in ideas and solutions to get ahead of the game,” he says. “They are already developing larger, more effective workforces, tapping into underutilised workers, getting the most out of the workers who already work for them, and using innovative, new ways to leverage hidden sources of labour capacity.

“Those who respond early and effectively will be best placed to flourish. By making good decisions and executing them well, we can all generate the long-term prosperity we want for our country.”

Chris Richardson of Deloitte Access Economics says current immigration policies are restricting what could be a surge in productivity and profits.

“The world is begging Australia to grow faster, offering us prices for our resources we have never seen before,” he says. “Yet at the same time, Australia has adopted policies that have seen migration fall, doing so just ahead of the biggest surge in retiree numbers this nation has ever seen. That means the next few years will see skill shortages proliferate.”

This, he says, will have hurt the mining and construction industries in Australia.

“That will be felt right across the two-speed economy,” he says. “Miners and construction companies will miss out on the full benefit of the resources boom, and businesses will juggle higher-than-necessary interest rates and inflation, and pay higher wages and higher prices than otherwise for a wide range of skills.

“Things are about to change,” Richardson continues. “Businesses need to realise that the future won’t be like the past; that the competition will be for workers, rather than jobs; that somebody already working for you is more valuable than they have been before; that letting somebody retire without exploring the options to keep them for longer may be a wasted and costly opportunity.”

Within their paper, Deloitte pinpoints the factors which will influence the workforce in coming years.

  • Population – more workers are retiring and migration rates are falling. This means the demand for labour will exceed supply.
  • Participation – businesses will need to look at their participation and retention strategies closely.
  • Productivity – businesses will need to examine how they can motivate employees. For this, business leadership is key.

To assist, Deloitte has devised 12 possible solutions for businesses, which will influence the three factors to business’ advantage. These include:

  • Liaising with education providers to access future skills.
  • Fully utilising one of the biggest untapped sources of competitive talent – women.
  • Tapping labour pools such as skilled migration and outsourcing.
  • Encouraging potential retirees to stay with the company for longer.
  • Seeking out skilled labour in untapped labour pools such as Indigenous workers, migrants and people with disabilities.
  • Incentivising current employees, motivating them for greater productivity.
  • Seeking innovative solutions through technology, such as ‘crowdsourcing’.

However, Swiegers is quick to note that labour issues cannot be solved with a ‘one size fits all’ approach.

“We know these issues are complex. They therefore warrant exploration of the broadest possible range of options, some of which might be considered contentious,” he says.

“We recognise that industries such as manufacturing and retail are struggling in the two-tier economy and cutting back of staff. However, even they won’t be immune from the coming skills crunch,” he continues. “We also recognise that the migration debate is a sensitive one. Even though skilled migrants more than pay their way and in fact generate wealth for our economy, the myth persists that migrants steal Australian jobs. Bringing more skilled migrants to Australia can help to fill the short-term skills gap.”

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Tuesday, November 15, 2011

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