Australia’s employers are facing critical skills shortages and almost all are reporting low levels of literacy and numeracy among employees. They are also encountering difficulties in recruiting employees with STEM skills and in areas such as business automation, Big Data and artificial intelligence solutions.

These findings are revealed in the Australian Industry Group’s recently-released 2018 Workforce Development Needs Survey Report which says “major skills pressures” are looming at a “critical time for industry transformation”.

“Without an education and training sector that can adapt quickly to the needs of the digital economy Australia’s business sector will suffer competitively into the future,” it adds.

Major “pressure points” identified in the survey include:

  • Skills shortages: 75 per cent of respondents reported skills shortages, a jump from 49 per cent in the previous survey in 2016, most often in the technician and trades worker category.
  • Literacy and Numeracy: 99 per cent of employers (up from 96 per cent in 2016) say they are affected “in some way” by low levels of literacy and numeracy in their workforce.
  • Leadership and Management: 62 per cent “believe a lack of leadership and management skills is having a high impact” on their business (up from 56 per cent in 2016).

Ai Group Chief Executive Innes Willox said it was clear that “new approaches to education, training and re-skilling” were needed “to maximise the benefits of the digital economy”.

“This is particularly important as employers reshape workforce capabilities and seek higher level skills, advanced technical and soft skills, digital literacy and changed management know-how.

“Without conducive policy settings and closer collaboration between industry and education sectors to drive education and training that adapts quickly to the needs of the digital economy, Australia’s business sector will suffer competitively into the future.”


Demands on workforce capabilities and cultures

The report says business leaders are dissatisfied with the basic numeracy and literacy levels of over one-fifth of school leaver entrants.

“It is also a concern that dissatisfaction levels are high for the self-management, planning and organising, problem solving, initiative and enterprise skills of school leavers,” it adds.

As businesses adapt to new technologies and changed conditions “they are facing new demands on their workforce capabilities and cultures”.

“Imperatives include higher level skills, advanced technical and soft skills, digital literacy and changed management capabilities to effectively negotiate autonomous work roles and partner with machines. Frequent re-skilling is becoming a constant.”

Employers are taking action, however, with growing numbers intending to increase expenditure on training this year. There has been a “significant increase” in internal company training and in “support from supervisors and mentors to boost literacy and numeracy skills”.

The report notes that “dissatisfaction with higher education graduates” among employers had decreased since the previous survey in 2016.

“Satisfaction levels were highest for higher education graduates, followed by VET graduates, and lowest for school leaver applicants.”


Contributing to the business culture

For higher education graduates, dissatisfaction by employers, while relatively low, was highest with regard to self-management, planning and organising (13 per cent), basic literacy (9 per cent), team work/communication (8 per cent) and knowledge of chosen career (8 per cent).

The report says the most important recruiting factor for higher education graduates “is the contribution the graduate will make to the business culture”. Some 38 per cent of respondents reported they plan to increase or establish new links with the higher education sector this year.

The most important form of support in order to link with universities, it says, is in “accessing examples of student activities that could assist the business, followed by a relevant point of contact at a local university, and information on supervising and mentoring students”.

Read the report in full here