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.
“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.”