A lack of workers: The new reality

Deloitte has launched a major discussion paper – Where is your next worker? that urges Australian businesses and the government to act now to get ahead of the looming skills shortage.

The paper is the first to be published under Building the Lucky Country – Business Imperatives for a Prosperous Australia, a long-term Deloitte initiative to drive debate and action on issues critical to Australia’s future.

“A new reality looms. The problem in Australia over the coming years won’t be a lack of jobs – it will be a lack of workers,” said Deloitte CEO Giam Swiegers.

“Leading organisations have already realised this and are engaged in ideas and solutions to get ahead of the game. They are already developing larger, more effective workforces, tapping into underutilised workers, getting the most out of the workers who already work for them, and using innovative, new ways to leverage hidden sources of labour capacity.

“Those who respond early and effectively will be best placed to flourish. By making good decisions and executing them well, we can all generate the long-term prosperity we want for out country and our children,” he said.

Chris Richardson of Deloitte Access Economics commented, “The world is begging Australia to grow faster, offering us prices for our resources we have never seen before.

“Yet at the same time Australia has adopted policies that have seen migration fall, doing so just ahead of the biggest surge in retiree numbers this nation has ever seen. That means the next few years will see skill shortages proliferate.

“That will be felt right across the two speed economy. Miners and construction companies will miss out on the full benefit of the resources boom, and businesses will judge higher-than-necessary interest rates and inflation, and pay higher wages and higher prices than otherwise for a wide range of skills.”

Richardson believes things are changing and in the future competition will be over workers rather than jobs. Businesses must start to understand the value of the employees they already have: “letting somebody retire without exploring the options to keep them for longer may be a wasted and costly opportunity,” he added.

Where is your next worker? highlights the positive actions that business and policy makers can take to maintain momentum as workers become harder to find. It offers 12 ‘levers’ which businesses and government can use to solve the skills problems and boost growth prospects. These levers lie within a framework economists refer to as the ‘3Ps’ or the three supply side drivers of economic growth:

  • Population – as retiree numbers surge and migration rates fall, demand for labour will exceed supply. With competition to be for workers rather than jobs, businesses must consider innovative ways to access the skills and labour they need for today and tomorrow.
  • Participation – Businesses need to closely look at their participation and retention strategies if they are to address the skills shortage.
  • Productivity – Business leadership is critical. For example, some studies show employee disengagement costs more than $39 billion a year in lost productivity.

The 12 ‘levers’ cover a broad range of options for business and government and include:

  • Working with education providers to access future skills, and shaping courses to suit business needs;
  • Fully utilising one of Australia’s biggest untapped sources of competitive talent – women;
  • Growing labour pools through skilled migration and considering outsourcing;
  • Tempting retirees back to work – or encouraging them to stay on in the first place;
  • Lifting the participation of groups such as indigenous workers, migrants and people with disabilities;
  • Taking engagement to the next level, making existing employees the most productive workers of all; and
  • Using innovative solutions and technology, including ‘crowdsourcing’ to address business needs.

Swiegers acknowledges the issues are not straightforward and that there is no easy solution.

‘We recognize that industries such as manufacturing and retail are struggling in the two-tier economy and cutting back on staff. However, even they won’t be immune from the coming skills crunch.

“We also recognise that the migration debate is a sensitive one. Even though skilled migrants more than pay their way and in fact generate wealth for our economy, the myth persists that migrants steal Australian jobs. Bringing more skilled migrants to Australia can help to fill the short-term skills gap.”

[Source: Recruitment Extra: December 2011 – January 2012 Edition]