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Skills shortages in Australia

Australia is the second wealthiest nation in terms of wealth per adult. It is currently in its 27th consecutive year of annual economic growth, and the Australian economy continues to expect a consistent growth over the next 20 years.

According to the Department of Jobs and Small Business, the total employment in Australia is expected to increase in 17 of the 19 broad industries over the next five years. In that regard, the total employment is projected to increase by 886,100 new positions by May 2023.

Here are some interesting projections to note:

  • Employment in the Hospitality industry is expected to increase by 12.1%, being an additional 91,000 jobs.
  • The Health Care and Social Assistance industry is projected to make the largest contribution to employment growth by 250,300.
  • The Construction industry is projected to bring the second largest contribution, with employment projected to increase by 118,800.
  • Employment in the Education and Training industry is projected to increase by 113,000.
  • The Professional, Scientific and Technical Services industry is projected to increase employment by 106,600.

Is Australia ready for this growth?

Let’s consider three examples:

The Hospitality Skills Shortage

The Hospitality industry has been steadily growing over the past five years at approximately 1.9%, with the growth attributed to factors such as the growing “foodie” culture, population growth and an increase in consumer demand.

To that end and according to findings from Edith Cowan University lecturer, Dr Edmund Goh, the industry now has a 28% vacancy rate, as older workers retire and the younger generation less willing to fill the vacancies. This means that it is becoming increasingly harder for employers to find long-term, trained and suitable staff.

This situation is even worse in regional areas, where employers are unable to build their business (despite the demand) as they cannot find the suitably qualified staff that they need.

In attempting to overcome this, Hospitality employers are turning to the Temporary Skill Shortage Visa (Subclass 482) (TSS Visa) in seeking skilled overseas workers to fill the various vacancies within their business – the most common being chefs, cooks, bakers, pastry chefs and restaurant managers.

The Construction Skills Shortage

The latest Real Estate Development Trends Report (released by real estate software provider, Altus Group) has revealed that market forces including trade policy, labour shortages and complex approval processes are among developers’ top concerns over the next five years.

There is currently a large number of infrastructure projects occurring along the ease cost of Australia creating a shortage of skilled labour and trade contractors, forcing developers to opt for joint venture arrangements.

This shows that Australia needs to look offshore to source skilled migrants who can contribute to the Australian workforce and economy. This will also help to ensure that local developments are not disadvantaged, which may have an undesirable flow-on effect.

In this context, the TSS Visa enables employers to address labour shortages by hiring skilled workers where they cannot find an appropriately skilled Australian worker. TSS Visa holders have the right to work in Australia in their skilled occupation for their sponsoring employer.

The Strategy of Telstra

Telstra is set to open a new innovation and capability hub in Bangalore later this year. The decision to move many of Telstra’s technical jobs offshore is a consequence of Australia’s own IT talent shortage.

The CEO of Telstra, Andy Penn, has commented that businesses “need these professionals now, but they cannot find in Australia enough of the skills, like software engineers.”

According to the telco chief, Australia can expect a shortage of 60,000 skilled workers in the ICT sector in the next five years.

To develop the IT talent that Australia so urgently needs, Telstra is partnering with Australian universities and is committed to working with the government and other stakeholders in “building a bigger technology talent pipeline within Australia, for the overall benefit of the nation.”

In the meantime, local businesses may consider the Global Talent Scheme pilot launched by the Australian Government to provide easier access to the world’s highly-skilled workers. The framework of this niche pilot scheme is designed to facilitate growth, skills transfer and job creation as well as provide the cutting-edge skills that Australia needs to compete globally.

The Global Talent Scheme pilot may be accessed under the TSS Visa programme.

Whether you are an Australian business seeking to fill a skilled position or a skilled overseas worker wanting to contribute to the Australian workforce and economy, we can assist in finding the best migration solutions to benefit all parties involved.

Article by Corina Chen (Senior Associate), as seen in the April Edition of Club Insights

"The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication."