What can be done to address the current skill shortage in Australia?

By Brendan Barker

Driven by the pandemic as well as a series of natural disasters in the last 12 months Australia has experienced an economic downturn and, although not technically in a recession the recovery of the nation is slow.

A survey conducted by the Australian Bureau of Statistics in 2020 identified 1 in 5 businesses – or 21% – in Australia reported having difficulty finding suitably skilled staff. According to that survey:

  • Two thirds (65%) of medium and large business are planning to employ new staff
  • Around half of medium businesses (49%) and large businesses (52%) will need to retrain or upskill existing staff to fill gaps.

In 2021 a little over 1 in 4 business in Australia – or 27% – are having difficulty finding suitably skilled staff. The two most frequently reported reasons for this were:

  • A lack of applicants (74%)
  • Applicants lacking the required skills (66%)

By January 2022, 69% of business with insufficient staff numbers reported an inability to find suitably skilled applicants as the major contributing factor. By April 2022 that number had risen to 84%.

There is a worrying trend coming out of these statistics indicating the pandemic and other events have had a strong impact on our ability to attract and retain suitably skilled staff. According to the ABS unemployment rate data, as of May 2022, five hundred and forty-eight thousand people are unemployed in Australia, but organisations are still having trouble attracting and retaining the right skills.

So, what’s to be done to bridge this gap? Two things need to occur here:

  1. We need to upskill people through qualifications in industries like hospitality, utilities, repair and maintenance, manufacturing, construction, trades and STEM professionals (sciences, technology, engineering and mathematics) and

  2. Organisations also need to invest in building leadership capability within their existing labour pool, which in turn will drive the culture and reputation of the organisation with a view to attracting and retaining people with the right skills and qualifications.

Recent data from the ABS also shows the impact of the great resignation is beginning to hit. Massive numbers of people are leaving their jobs in favour of better opportunities, better work/life balance and/or better work environments. Around 28% of people have left jobs without having another job to go to and as many as 30% of the people leaving their jobs are looking to change careers completely, another reason organisations need to focus on building skills and capability.  

The question then is how should organisations begin to do that? Here are some of the things I believe our organisations can do to begin building the skills and qualifications they need.

Provide opportunities for growth and development at all levels

In the 1960’s, Professor Charles Jennings at Princeton University developed his 70/20/10 principle of learning. In it he identified:

10% of all the learning people do is through formalised learning programs so giving people access to training courses that focus on either technical skills or soft skills allows them to mix and match so they can develop in areas that are individually required.

20% of all learning comes through relationships. From a very young age we learn how to behave, how to communicate and even our own personal values systems through those around us. In most cases our parents and other trusted members of family and community. Even in organisations the daily conversations we have with colleagues allow us to learn and grow, so encourage people to reach out and connect with each other. Create an environment that allows for human connection and the results can be surprising.

70% of all learning comes through practical experience, which in an organisational context really means on-the-job learning. So, when people attend courses and come back with heads full of theory, it means you need to identify or create opportunities to apply that theory in practical situations.

Encourage and support people to build their skills and qualifications

It’s a well understood concept that you can’t train someone who doesn’t want to be trained. You can’t just install information in people’s heads or hook them up to a machine and upload the necessary skills. People need to be trained to build their skills but that means they need to want to be trained.

Many people don’t possess the natural motivation to pursue continued learning, but they can be encouraged, supported and rewarded along the way and indeed, that’s exactly what we should be doing.

When people struggle to balance a job with further education, we can acknowledge that, but I also think we can achieve a lot by devoting some time to just talking with them, listening to what they are struggling with and then providing the necessary support to help them conquer their obstacles and continue moving towards their end goal.    

Provide opportunities for them to practice their new skills

It is often said organisations should provide opportunities for people to practice their new skills upon completion of their training. This is an admirable notion, but it can also be a case of too little too late for some. Providing micro-opportunities for people to practice what they are learning as they are learning it can help to reinforce the positive nature of the learning and allow people to grow and develop throughout the process.

Of course, this means you may need to create said micro-opportunities and this won’t always be easy, but the benefits of doing this far outweigh the challenges of creating them.

Focus on building soft skills as well as technical skills

It is the leadership in the organisation that drives culture, and the leaders need to be the ones consistently encouraging their people to learn and grow. However, according to a Gallup survey conducted in 2021, 58% of people in leadership positions in Australia have never been given any support, training or development opportunities in the specific skills of leadership – and let’s be very clear about this, true leadership requires a set of skills beyond qualifications. Even a Harvard MBA won’t equip people with the nuanced skills required for genuinely engaging leadership. Skills like effective communication, engagement and motivation, diversity inclusion, critical thinking and strategic decision making all require support and development. It’s no longer acceptable to assume people will naturally bring these skills to the role.

There is a current global trend towards inclusive leadership in all organisations which means breaking down culturally stereotypical barriers to embrace diversity across the board. This doesn’t mean looking beyond differences, it means acknowledging and embracing them, but to do this we need to begin to challenge our own individual biases and that is going to take a lot of support.

American business executive, Sheryl Sandberg famously said “build your skills, not your resume”. Given the unpredictable environment in which we find ourselves, I couldn’t agree more. If we wish to achieve growth and expansion for our organisations it is your people’s current skills that will do that, not a detailed list of their experiences.  


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