How to make a difference to Australia's digital skill shortage

The COVID-19-induced reduction in migration has created a shortage of skills in many sectors of the Australian economy, and the impact has been particularly severe on the technology industry.

According to Deloitte Access Economics, 30% fewer temporary migrants with technology skills arrived in Australia in the 2019-20 financial year than the year prior. At the same time, Deloitte estimates Australia will need an additional 200,000 technology workers over the next three years, taking the technology workforce to more than one million by 2026.

It is unlikely that skilled migrants will be able to fill this gap. Nor does Deloitte see Australian universities producing a sufficient number of graduates to meet the annual demand for around 60,00 skilled technology workers.

Employment agency Robert Half has identified shortages of some specific digital skills. Its 2021 Demand for Skilled Talent report said the need for DevOps skills had tripled over the past five years, and it identified a demand for almost double the number of people with SaaS skills.

In recent years, these shortages have been reflected in spectacular salary hikes, well above across-the-board salary increases in other industries. For example, salaries for people skilled in PRINCE2 project management grew almost 30% more than the average, and according to Robert Half, salaries for people with SQL skills grew by nearly 20%.

In short, Australia needs to find some means of fulfilling the demand for technology talent that is both sustainable and scalable, without relying on skilled migrants who are a temporary solution. The answer is short, specialised technology courses and certifications. These courses can give people in-demand technology skills and make them job-ready in a matter of months rather than years, as many university degrees do.

Increased availability and promotion of such courses and certifications would encourage people from all walks of life to retrain for a new technology career. Furthermore, they would be particularly attractive to those workers whose skills are becoming less in demand.

One Australian state, Victoria, is showing the country how it can be done. It is trialling a Digital Skills and Jobs program at a cost of $64 million, with the aim of training and upskilling mid-career Victorians so they can transition into digital careers. Over the next three years, the program will support 5,000 individuals via a six-month program that includes 12 weeks of industry-backed training, followed by 12 weeks placement in a digital role with a participating Victorian business. They will also be mentored throughout the program to help them find long-term employment.

The program has the backing of major employers in the state who will provide the job placement. These employers are only too aware of how the digital skills shortage pushes up their costs and holds back their plans.

There is similar action from the Federal Government. Its Digital Skills Organisation (DSO) is 'developing sustainable employer-led approaches to create a digitally upskilled, job-ready workforce'. According to the website, upskilling the general population represents about 61% of Australia's overall training needs, with 87% of all jobs requiring digital literacy skills.

A hundred data analysts will be trained under the DSO's Digital Skills Organisation Pilot. The pilot program aims to ensure that digital training offered in Australia adequately meets the skills needs of our employers. It hopes to build Australia's technology workforce further to provide a competitive edge needed in the global market. Participants will be given employer-led content and training to make them job-ready.

The DSO's website also highlights the digital skills challenge facing Australia. It points out that Australia ranks very poorly against other nations in digital skills: it is in 40th place.

"We are not currently producing or upskilling enough quality talent at a high enough rate to deliver to the needs of organisations across Australia, large and small," it says. It expects our poor showing will compromise our ability to compete on the world stage against other nations with world-class talent in the digital space.

These initiatives are very welcome, but they will have a minimal impact on the overall skill-shortage facing Australia. Many more initiatives are needed by states and territories to meet the economy's growing demand for digital skills across all industries and to make sure Australia moves up, not down in the digital skills rankings.

COVID-19 has clearly made Australia's skills shortage worse. As the impacts of the pandemic diminish, we will be presented with both a warning of what the future holds if we do not act, and an opportunity to make positive change, by introducing initiatives that train up more people in digital skills.

The Victorian Government's initiative clearly shows the appeal of free digital skills training and job placement assistance for those who are unemployed or at risk of losing their jobs. It's time to scale up these projects right across the country and build up Australia's technology workforce.