Skill shortages have been a persistent issue for the Australian economy, impacting productivity and economic growth in several industries. The problem has been further exacerbated by the COVID-19 pandemic, which has led to border closures and restrictions on migration, resulting in a decrease in the availability of skilled labor. This article will delve into the issue of skill shortages in Australia, its impact on the economy, and the measures taken by the government to address the problem.
Skill shortages in Australia
Skill shortages have been a long-standing issue in Australia, with certain industries experiencing significant skill gaps in recent years. According to a report by the Australian Industry Group, over 75% of businesses in Australia are currently facing skill shortages, with the problem most acute in the healthcare, construction, and manufacturing sectors. The Australian Bureau of Statistics (ABS) reports that the number of job vacancies has been increasing since the pandemic-induced downturn in 2020, with job vacancies in February 2022 at their highest level since records began in 2009. However, there is a shortage of skilled workers to fill these vacancies, leading to reduced productivity and increased labor costs for businesses.
The Impact of skill shortages on the Economy
The impact of skill shortages on the Australian economy is significant, affecting both economic growth and productivity. The lack of skilled labor hinders the growth of businesses and industries, reducing their capacity to meet demand and fulfill orders. This, in turn, leads to a decline in the competitiveness of the affected industries, which can have broader implications for the national economy. Additionally, skill shortages result in a reduced output per worker, leading to lower productivity and higher labor costs for businesses. This ultimately impacts economic growth and job creation, further exacerbating the problem of skill shortages.
The measures taken by the Australian government
The Australian government has been proactive in addressing the issue of skill shortages, implementing several measures to bridge the skill gap and increase the availability of skilled labor. The government has introduced various initiatives, including education and training programs, migration policies, and industry-specific programs to address the shortage of skilled workers.
Education and training programs
The government has implemented several education and training programs to address the skills gap in Australia. The Vocational Education and Training (VET) system is designed to provide education and training to individuals to meet the needs of the labor market. The government has also implemented the Industry Training Fund (ITF) to support training programs for industries experiencing skill shortages. Additionally, the government has invested in apprenticeship and traineeship programs to provide on-the-job training for individuals seeking employment in various industries.
The Australian government has also implemented migration policies to address skill shortages in the country. The Skilled Migration Program is designed to attract skilled workers from overseas to fill skill gaps in the Australian labor market. The program includes various visa categories, including the Skilled Independent visa, Skilled Regional visa, and Employer-Sponsored visa. Additionally, the government has introduced the Global Talent Program to attract highly skilled individuals to work in Australia. Recently passed out graduates from different engineering colleges can also apply for a work visa immediately after completing their studies. Check with us how this is possible.
The government has implemented industry-specific programs to address skill shortages in critical sectors, such as healthcare, construction, and manufacturing. For instance, the government has established the Health Workforce Scholarship Program to address skill shortages in the healthcare sector. The program provides scholarships for health professionals to undertake further training and education. Additionally, the government has introduced the Skilling Australia Fund to support the training of apprentices and trainees in critical industries.
The healthcare industry is one of the largest employers in Australia, with around 1.5 million people working in the sector. The aging population and increased demand for healthcare services have created a significant gap in the availability of skilled healthcare workers. According to the Australian Government’s Job Outlook, the healthcare industry is expected to grow by 11.3% between 2019 and 2024, with around 250,000 job openings expected in the sector over the same period.
The shortage of healthcare workers is particularly acute in regional areas, where it is often challenging to attract and retain qualified healthcare professionals. The Australian Medical Association (AMA) estimates that by 2030, there will be a shortage of around 125,000 nurses and 2,700 doctors in the country. The AMA also estimates that Australia will need to train an additional 3,000 doctors and 25,000 nurses each year to meet demand.
The shortage of skilled healthcare workers has significant implications for the Australian economy. According to a report by Deloitte Access Economics, the healthcare sector contributed around $154 billion to the Australian economy in 2017-18, equivalent to around 8.2% of GDP. The report also found that the sector supported around 1.6 million jobs or around 13% of all employment in Australia.
Information Technology Industry
The information technology (IT) industry is another sector that is facing significant skills shortages in Australia. The demand for skilled IT professionals has increased rapidly over the past few years, driven by the growth of cloud computing, big data, and artificial intelligence. According to the Department of Employment, Skills, Small and Family Business, the IT sector is expected to grow by around 11% between 2019 and 2024, with around 21,000 new jobs expected in the sector.
The shortage of skilled IT workers has become a significant concern for Australian businesses, with many struggling to find qualified candidates for critical positions. According to a survey by the Australian Computer Society, around 85% of IT businesses in Australia have experienced a skills shortage in the past 12 months. The survey also found that the shortage of skilled IT workers is limiting the growth of the sector, with businesses unable to take on new projects due to a lack of staff.
The shortage of skilled IT workers is also having a significant impact on the Australian economy. According to a report by the Australian Computer Society, the IT sector contributed around $100 billion to the Australian economy in 2019, equivalent to around 5.1% of GDP. The report also found that the sector supported around 663,000 jobs or around 5.4% of all employment in Australia.
The average salaries of skilled workers in this industry has doubled in the last 2 years. This made Australia a competitive destination to USA in providing job with high income and consistency.
The construction industry is another sector that is facing significant skills shortages in Australia. The demand for skilled workers in the construction sector has increased rapidly over the past few years, driven by the growing population and increased demand for housing. According to the Department of Employment, Skills, Small and Family Business, the construction industry is expected to grow by around 6.2% between 2019 and 2024, with around 42,000 new jobs expected in the sector.
The shortage of skilled construction workers has become a significant concern for the industry, with many businesses struggling to find qualified workers for critical positions. According to a survey by the Australian
Education and Training
The education and training sector is another industry that is facing a significant shortage of skilled workers. The demand for teachers and trainers has been driven by the growing student population and the need for upskilling and reskilling of the workforce. According to the Department of Education, Skills, and Employment, the number of job vacancies in the education and training sector increased by 7.3% in the 12 months to August 2021.
Agriculture and Horticulture
The agriculture and horticulture industries are facing a significant shortage of skilled workers, which is affecting the productivity of the sector. According to the National Farmers’ Federation, the agriculture sector needs an additional 100,000 workers by 2030 to meet the growing demand for food and fiber. The shortage of skilled workers has led to delays in harvesting and planting, which is affecting the overall productivity of the industry.
The mining industry is another sector that is facing a significant shortage of skilled workers. According to the Minerals Council of Australia, the mining industry needs an additional 20,000 workers by 2024 to meet the growing demand for minerals and resources. The shortage of skilled workers has led to delays in mining projects, which is affecting the overall productivity of the industry.
After many years the Australian mining industry has tied up with some of the trade-supplying countries like India, Philippines, Korea, and Vietnam to facilitate them to work in Australia with lesser requirements.
Hospitality & Tourism
The Australian hospitality, tourism, and entertainment industry is also suffering due to the skill shortage problem. These industries are highly dependent on skilled workers in various fields such as chefs, restaurant managers, hotel staff, tour guides, and entertainers. The lack of skilled workers in these industries is having a significant impact on the overall economy of Australia.
According to a report by Tourism Research Australia, the tourism industry in Australia is expected to grow at an average annual rate of 4.1% from 2019 to 2029. This growth is expected to generate employment opportunities for an additional 123,000 workers in the industry. However, the industry is currently facing a significant shortage of skilled workers, which is likely to affect the growth potential of the sector.
Similarly, the hospitality industry is also facing a significant shortage of skilled workers. According to the Restaurant and Catering Industry Association, the restaurant industry alone is expected to face a shortfall of around 123,000 workers by 2025. This shortage is expected to have a significant impact on the growth potential of the industry.
The entertainment industry is also suffering from a lack of skilled workers. According to a report by the Australian Government’s Department of Employment, the creative arts and entertainment industry is expected to grow by 4.4% from 2019 to 2024, which is faster than the average growth rate for all industries in Australia. However, the industry is facing a significant shortage of skilled workers in various fields such as music, theatre, and film production.
Many regional restaurants got closed due to the skill shortages and this made the local minimum wages shoot up to survive in the industry. This ultimately lead to the recruitment of skilled people from international popular destinations to support the local shortages.
Measures were taken by the government to support the skill shortages
The government of Australia has expedited the old pending applications and has cleared most of them at the rapid face and made many of the pending applications processed in record time by automatic their processing system. They have also started giving TSS (temporary skill shortage) work visas within 2 months of time which were previously taking close to 4 months. They have also streamlined the process for accredited employers and brought down the number of steps to make the process easy and faster. They have been always conservative in providing visas to the right skilled person who can contribute to the Australian economy. They also started giving multiple 485 visas for the onshore and offshore applicants who have recently completed their studies in Australia. So now most of the students are able to work in Australia for close to 3 years to 5 years on this 485 temporary graduate visa under different eligibility conditions.
So do you want to know whether your skill is in demand in Australia? and check if you are eligible for a skilled work visa or a temporary skill shortage work visa send your resume for assessment by clicking the bellow button.