Australia's tech sector grapples with severe skills shortages

Australia is facing significant challenges due to skills shortages in its technology sector, as revealed by a report from global recruitment agency Hays. According to the report, Australia ranks fourth worldwide for talent deficits, particularly in the technology, banking, financial services and insurance (BFSI), and manufacturing sectors. This places Australia among the top five countries grappling with substantial skills shortages.

The report, titled "The Workforce of the Future: Navigating the Skills Disruption," highlights that this ongoing shortage has been detrimental to Australian businesses. The absence of adequately skilled candidates is causing stagnation in productivity, missed opportunities for innovation, and hampering long-term growth. This trend is expected to continue adversely impacting Australia's competitiveness on a global scale.

Matthew Dickason, CEO APAC for Hays, stated, "To address the growing skills gap in these industries, Australian organisations must understand the global supply and demand of skills and take proactive action to ensure a steady future pipeline of talent. Organisations who implement a global talent strategy will broaden their pool of skilled candidates, dramatically boosting their chances of finding the skills they need."

According to the report's in-depth analysis, the USA, China, India, and Germany are among the top nations boasting robust talent networks across several key sectors. Brazil also features prominently in the technology, engineering, and BFSI sectors, while Japan is identified as a key player in manufacturing and life sciences. Conversely, countries such as New Zealand, Portugal, Canada, the UK, and Switzerland exhibit significant talent deficits, making it challenging for organisations in these regions to find the necessary skilled personnel.

Countries such as Colombia, Malaysia, Hong Kong, and Singapore are emerging as top talent networks, with a notable supply of professionals who possess 0-3 years of experience. This indicates their potential in supporting long-term growth plans and positioning as key talent producers in the future.

India is recognised as the most cost-effective country for offshoring tech skills, being four times cheaper compared to Australia. Alongside India, countries like Romania, Mexico, and Hungary are highlighted as cost-effective talent networks. These nations offer organisations the possibility of accessing skilled professionals at a lower cost while maintaining comparable levels of experience, which is particularly beneficial in an environment of premium skills shortages.

The report underscores that a significant segment of the workforce in many countries has over eight years of experience, with some exceeding 75%. In contrast, in Australia, this proportion is notably lower at 56% for life sciences, 60% for engineering and BFSI, 66% for technology, and 67% for manufacturing. This serves as an early warning that without a robust pipeline of emerging talent, Australia will continue to lose its competitive edge as skilled workers age out of the labour market.

Matthew Dickason emphasised the need for a coordinated approach, saying, "Business leaders are navigating a complex landscape in their quest for the talent needed to help their organisations thrive. Skills shortages, ageing populations, shifting worker expectations, the evolving gig economy, and the rise of skills-based hiring are all factors contributing to this challenge in Australia."

Dickason added, "Business leaders need to create a workforce planning strategy that considers not just the type of talent they need, but where they can source it from, the level of experience needed, and the cost to acquire. Simultaneously, it's essential that the Australian government takes an active role in planning for the skills of the future. This includes fostering in-country talent development and providing skilled migration opportunities. Addressing the skills shortage requires a coordinated effort between the public and private sectors, working together to create a sustainable and competitive workforce. By aligning government policies with industry needs, we can ensure that organisations have access to the talent they need to succeed."