The talent mismatch is continuing to grow in Australia as the tech sector grapples with the increasing skills gap, a new study has found.
The Hays Global Skills Index 2019/20 published in collaboration with Oxford Economics, offers a guide to the most significant trends currently facing the global labour market, with research undertaken into 34 major economies around the world, including Australia.
The study looks into the macro trends, challenges and opportunities facing the workers and employers in these economies, using seven key indicators: education flexibility, overall wage pressure, labour market participation, labour market flexibility, talent mismatch, wage pressure in high skilled industries and wage pressure in high skill occupations.
Each economy is given an aggregated score from each of these indicators being measured out of 10, with one being a low pressure point and 10 being high.
Australia received a score of 6 in the index, with a vast increase in the talent mismatch between the skills jobseekers have and those employers want for the sixth year straight.
This shows that it is increasingly difficult for Australian employers to hire people with the right skills for the jobs on offer, something that has especially hit the tech sector recently.
“Despite an existing pool of labour, our index shows that it’s harder for employers to secure the right talent now than it was a year ago,” Hays Australia managing director Nick Deligiannis said.
“This mismatch is focused on high-skilled industries and roles that require highly-skilled professionals, such as engineering, technology, financial services and professional services.”
Australia is facing a massive tech talent gap, with 100,000 more tech workers needed by 2024, according to ACS’ Australia’s Digital Pulse 2019.
Upside of upskilling
The report found that between 2018 and 2030, the contribution of digital to Australia’s GDP will have grown by 40 per cent, and employers could see the benefits of over $11,000 per year for each employer that gets upskilled in technology.
Technology has also meant that there is less demand for lower skilled jobs due to the rise of automation and machine learning, Deligiannis said.
“In contrast, demand is falling in low-skill industries and for low-skill workers who do not regularly upskill and who perform routine and repetitive tasks that can be automated,” he said.
“Given the rapid pace of technological advancement, this imbalance will continue to escalate unless employees invest in their upskilling, and employers redesign jobs and reskill displaced workers. Without such actions, the labour market will continue to struggle to keep up with the skills employers need.”
This is the highest score for Australia in the Index’s history, with the country feeling significant pressure in terms of wages in high-skill industries and talent mismatch.
The previous highest score for Australia was 5.9 in 2012.
The new report suggests that the Australian labour market has come under “greater strain” in the last year.
“Over the past year we’ve seen skills shortages intensify and the talent mismatch widen,” Deligiannis said.
“It’s no wonder then that Australia’s overall Hays Global Skills Index score has climbed for the fourth consecutive year.
“Employers in 2019-20 must find other compelling ways to attract, retain and engage staff, including reinvesting in training, career development and genuine work-life balances.”
Around the world
The report found that the exponential growth of artificial intelligence and machine learning is having a significant impact across the economies studied, and is driving the “disappearance of the mid-skilled job” and a “hollowing out of the labour market”.
The Hays Global Skills Index found that this talent mismatch is also being felt around the world, especially in technology industries, with this indicator increasing in 16 of the 34 economies investigated.
Governments and businesses need to invest in education, life-long learning and reskilling programmes in order to urgently address this issue, the report found.
“Developing skillsets for workers that are less vulnerable to the forces of outsourcing, automation and globalisation should help ease some of the overall downward pressure on wages,” it said.
“The boost in human capital from training will also increase productivity which should in turn stimulate wage growth.
“There is also a real opportunity for businesses to work with educational institutes to ensure the skills of tomorrow are being taught and people are suitably ready for the world of work.”