January 2022 saw the release of a survey of the expectations CEOs of the Australian Industry Group’s member companies have.

It talks about business experiences in 2021, investment priorities and their expectations for 2022. It also looks at business inhibitors and strategies. Training features as an issue CEOs are concerned with and trying to address.

Training priorities

The survey report suggests that CEOs are focused on “ameliorating skill shortages by investing in staff training and development.” They see one of their major investment priorities as being staff development and training, along with capital investments and investment in new technologies – especially those related to information and communication (ICT). Indeed:

“The prevalence of staff training and development and spending on ICT technologies among the investment priorities of CEOs comes as businesses report skill shortages across a wide and growing range of occupations and as businesses have resorted to digital technologies in adapting to the challenges presented by the COVID crisis.”

There is also an associated research note their Centre for Education and Training has produced that reinforces the issue of staff recruitment and retention. It suggests that 73% felt they would have difficulty in attracting and retaining staff. Over a third felt their major problems would be in one of VET’s key training areas: technicians and tradespersons.

Expected difficulties in finding and retaining staff are seen as highest in construction and mining (87%), while being significant but lower in other industry sectors – for example manufacturing (76%) and services (71%).

A total of 28% of CEOs saw training and development as their highest spending priority in 2022, and 58% saw it as their first or second priority. It also reported that the vast majority (90%) will spend as much or more on staff training this year as in 2021.

Training: what happened in 2021

The survey report found:

“Staff training expenditure increased in 34% of businesses, declined in 25% and remained the same for 41% of businesses in 2021 with a net balance of 9 pointing to a relatively modest overall increase in spending on staff training and development.”

And for 2022?

The survey report found that “staff training expenditure is expected to increase for 48% of businesses,” which is markedly higher than for 2021. Short courses and training times are likely to be the go and the capacity in education and training organisations to provide that training will be important.

Interestingly, though, the research note suggests that:

“many of the skill shortages affecting Australian CEOs at the moment are rigid shortages – those that require lengthy training and development time, such as a 3-5-year degree or an apprenticeship, plus a number of years of ‘on the job’ experience to gain proficiency. These skills require more long-term planning and coordination to ensure an adequate pipeline exists to meet the needs of our rapidly evolving economy.”

So, what seems to be needed is getting the balance right between the availability of longer term and strategic approaches to training coupled with ‘tactical’ and shorter term training responses that meet more immediate needs.

How will businesses respond?

CEOs believe they will respond by upskilling existing staff (26%) or employing apprentices and trainees (17%). As the research note suggests:

“This shows a strong commitment to training and development in general, as well as a vote of confidence in the apprentice and trainee system.”

Other strategies proposed included 15% of CEOs saying they plan to increase wages, focus on retention strategies (12%) and increase workplace flexibility (8%) to “secure and keep the skills they need.”