The 2018 Hays Global Skills Index says Australia’s talent mismatch between the skills jobseekers possess and those employers want has increased for the fifth consecutive year. The report, published in collaboration with Oxford Economics, shows that despite an existing pool of labour, employers are finding it harder to secure the right talent, particularly in high skill industries and for roles that require highly-skilled professionals. According to Hays, increased job opportunities in highly skilled industries and technological advances are behind this struggle to keep pace with labour market demand.
“Demand for highly-skilled professionals and in high-skill industries such as IT, engineering, financial services and professional services now far surpasses demand in low-skill industries and for low-skill workers who perform repetitive tasks that can be automated (see the ‘wage pressure in high-skill occupations’ and ‘wage pressure in high-skill industries’ indicators below),” said Nick Deligiannis, managing director of Hays in Australia & New Zealand. “At the same time, the available labour force is shrinking (‘labour market participation’). Given these findings, all professionals must continuously upskill to remain relevant and employable in our increasingly automated world of work.”
Australia’s increase to 5.7 on the overall Index – up from 2017’s 5.5 and the highest since 2012’s peak of 5.9 – shows increased pressure in the job market. i.e., 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, each scored out of 10 (1 being an extremely low pressure point, 10 being an extremely high pressure point). They include:
- Talent mismatch: Australia scored 5.6. This figure has risen for five consecutive years (up from 5.2 in 2017, 4.5 in 2016, 4.2 in 2015, 4.1 in 2014 and 4.0 in 2013), which shows that readily available candidates are less likely to possess the skills employers want;
- Wage pressure in high-skill industries: Australia scored 8.7, a high pressure score that shows wage pressure in high-skill industries is rising much quicker than in low-skill industries relative to the past. This suggests there is a shortage of talent in high-skill industries;
- Wage pressure in high-skill occupations: Australia scored 6.2, suggesting there is a shortage of highly-skilled professionals;
- Labour market participation: Australia scored 5.2, up from 4.8 last year and 3.8 in 2016. A rise of 1.4 points over two years shows increasing pressure, underscored by rising vacancy activity and fewer working age people looking or available for jobs;
- Overall wage pressure: Australia scored 5.0, which shows that employers are holding tight and keeping salary increases restrained rather than using remuneration to compete for talent;
- Labour market flexibility: Australia scored 4.4, which suggests our labour market legislation is fairly flexible.