Exclusive: Workforce skills gap hits critical point in ANZ

Australia and New Zealand are at a turning point when it comes to workforce skills.

That's according to Tony Maguire, Regional Director at D2L, who says shifting demographics, rising demands on professionals and managers, and a lack of action on upskilling are combining to create an urgent need for change.

"The statistics say demand for skills associated with managers and professionals has risen sharply," he said. "In 2024, 69% of businesses reported an increased need for managers' skills. That's up from 43% just two years earlier."

This rapid rise is due in part to companies rebalancing after the disruption of the pandemic. Maguire said businesses are restructuring their operations, and mid- to senior-level managers are under significant pressure to support that process.

He also highlighted a 30% increase in the demand for manager-specific soft skills over two years, calling the trend "massive".

Beyond statistics, Maguire said the workplace is facing what he called a "potential workforce dissonance"—a clash of values, motivations and expectations between generations.

"We've got three waves. One is older workers—people like me—staying in the workforce longer," he explained. "Then we've got millennials, who now make up 45% of the workforce. And behind them is the building swell, Gen Z, who are bringing in completely new values."

According to Maguire, Gen Zs place a high emphasis on diversity, equity and inclusion, with more than half seeing these values as essential in the workplace. And while these weren't previously high-priority drivers, "63% of Gen Z employees now say that culture and values are more important than the paycheck."

He argued this shift could either create disconnection—or be used as a lever to build stronger, more cohesive workplaces through purpose-driven skill development.

"You need to thread together a cohesive set of work cultures that lead to productivity gains based upon a cohesive approach to skills development," he said.

A key part of the solution, he believes, lies in recognising and accrediting skills in a more flexible and accessible way.

He pointed to vocational degrees—credentials offered at the bachelor level through TAFEs and universities—as a model for demonstrating lived experience and evidence of skill attainment. "It's about recognition and value," he said. "How do you personalise that in terms of a professional map, so you can show that growth?"

But he also issued a stark warning: systemic inequalities in employment still exist and show little sign of improvement.

"Employment rates for people with disability are still massively behind those who identify as not having a disability—and there's been no improvement in 20 years," he said. "For Aboriginal and Torres Strait Islander communities, there's been no noticeable change in 30 years. And youth unemployment is still double the national average."

When asked what specific skills are most urgently needed, Maguire cited a broad range—from trades to tech.

"There's quite a bit going around about skills shortages," he said. "Professionals and managers are number two and three on that list, after technicians and trade workers."

He said the shortfalls are especially apparent in infrastructure, where basic frameworks are missing. "The CEO of a trade association recently told me there's no competency framework for concreters. You're just firing the concrete in the pit, but there's actually a lot more to it."

This gap, he said, reflects a larger issue of how fragmented skill development has become across industries. And it's especially difficult for small business operators and sole traders, who may not have the resources to invest in upskilling.

"Most of these guys just need to get to the next gig," he said. "So how do you bring the level of management along with you? That's where associations have a huge role to play—improving strategic and tactical thinking for their members."

One barrier, Maguire said, is the lack of time. With many businesses still in "survival mode" following COVID, upskilling often falls to the bottom of the priority list.

"They're trying to keep the lights on," he said. "But if you're just keeping your eye on the ball, you're not looking specifically at where that ball is going."

He cited research showing that 77% of businesses plan to reskill staff on the job—but questioned how realistic that is.

"In your work day, where do you find the time to do re-skilling?" he asked. "If you've been on the tools all day or in a call centre, you've got to be highly motivated to invest in yourself after hours."

Instead, Maguire suggested that technology can help make learning more accessible—by breaking it into smaller, more manageable modules.

"How do we chunk down learning into more accessible, bite-sized pieces?" he said. "Not just micro-credentials, but just-in-time learning and longer-term journeys, depending on what the learner needs."

He also believes CEOs have a key role to play in identifying and nurturing the right people.

"You're looking for employees who make a real contribution—people with soft skills, leadership qualities, resilience," he said. "Those are the folks that CEOs are looking for. You can always train for the harder business skills."

At an upcoming associations conference, he said he expects to see both types of delegates: those sent to enjoy a break, and others attending to genuinely grow their skills.

"So as a CEO, you've got to be able to respond to different reward structures and development needs."

Asked whether workforce development should be a shared responsibility, he didn't hesitate.

"This really is all a team sport," he said. "You need TAFEs, universities, government and business to all come together."

He added that without this shared effort—and a transparent way to track progress across stakeholders—the system won't work.

"If employees don't see the value, they won't invest the time. If employers can't see a return, they won't support it either," he said.

So what would he say to business leaders wondering what to do next?

"This calls for a different kind of leadership," he said. "One that recognises productivity and the value the workforce brings to the business."

He urged leaders to invest in themselves, understand the data, and empower change from within. Boards must also support CEOs, and vendors should go beyond selling solutions to helping solve real problems.

"There's more pie if we all work together," he said. "An incoming tide lifts all boats."