Recruitment Market Segment LS
Recruitment Market Segment RS
Tuesday, 26 September 2017 20:05

Employers struggle with skills matching to meet demand: Index Featured

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There is a talent mismatch between the skills jobseekers possess and those employers want, according to a new report showing that despite an existing pool of labour, Australian employers in high-skill industries still find it difficult to fill jobs that require highly-skilled professionals.

According to recruitment firm Hays, increased job opportunities in highly-skilled industries and technological advances are behind the struggle to keep pace with labour market demand.

Hays assessment of the market was made in its latest Global Skills Index published by the firm in collaboration with Oxford Economics.

“Employers in industries such as IT, engineering, financial services and professional services have higher demand for talent than those in low-skill industries (see the ‘wage pressure in high-skill industries’ indicator),” says Nick Deligiannis, managing director of Hays in Australia and New Zealand.

“The significant expansion of the wage gap between high- and lower-skill occupations year-on-year also underscores the talent mismatch. New technology is rendering routine and repetitive jobs redundant and leading to greater demand for higher-skill workers relative to medium- and lower-skill workers.

“Wages for the former (such as in digital, engineering, senior accounting and estimating) have continued to grow at around the same rate year-on-year, while lower-skill occupations experienced much slower wage growth (see the ‘wage pressure in high-skill occupations’ indicator).”

Hays says Australia’s increase from 5.1 to 5.5 on the overall Index — the highest since 2013 — shows increased pressure in the job market, and it’s harder to secure the right talent now than it was a year ago.

The Index is calculated through an analysis of equally weighted indicators. Here’s how Australia fared and what Hays says about the results:

Talent mismatch: Australia scored 5.2, up from 4.5 in 2016, 4.2 in 2015 and 4.1 in 2014, which shows that readily available candidates are now less likely to possess the skills employers want.

Wage pressure in high-skill industries: Australia scored 8.8, up from 8.0 in 2016, 2015 and 2014, suggesting that wage pressure in high-skill industries is rising much quicker than in low-skill industries relative to the past. Thus there is a shortage of suitable talent in high-skill industries.

Wage pressure in high-skill occupations: Australia scored 6.2, up from 3.9 in 2016, suggesting there is a shortage of highly-skilled professionals.

 Overall wage pressure: Australia scored 4.9, down from 6.7 last year, which shows that while wage pressure is evident, employers are holding tight and not using salary to compete for talent overall.

Labour market participation: Australia scored 4.8, suggesting that there are less people looking for work thanks to recent growth in the number of jobs.

There are also positives for our labour market: The education flexibility score of 4.1 shows our education system is well equipped to meet future talent needs while the labour market flexibility score of 4.3 suggests our labour market legislation is fairly flexible.

“Australia’s fluid job market is delivering career advancing opportunities, but the talent required for these roles is changing,” says Deligiannis.

“Highly-skilled professionals are sought over those who perform routine or repetitive tasks that can be automated.

“At the same time, the labour force is shrinking and is less likely to possess the skills employers want. Add wage stagnation and Australia’s overall score has returned to 5.5, a figure not seen since 2013.”

To view the Hays Global Skills Index click here, and for details of the particular skills in short supply go to the latest Hays Quarterly Report.

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Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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