A new report released in mid-September by the Australian Industry Group (AiG) has identified a series of critical skills issues facing Australian businesses in 2018.

Their 2018 Workforce Development Needs Survey Report found that employers face greater challenges finding the skills they need than in 2016. Occupations most frequently reported in shortage were from the Technicians and Trades Workers occupational groups.

What’s the story?

The AiG survey covered nearly 300 companies with over 110,000 employees across the manufacturing, construction, mining and service industries.

There are some key messages here. First, the lack of foundation skills, especially literacy and numeracy is a really big problem. So are the lack of digital literacy and advanced soft skills, including self-management, planning and organising, problem solving, initiative and enterprise skills amongst school leavers and, as they point out:

“it is disturbing that 99 per cent of employers are affected in some way by low levels of literacy and numeracy in their workforce.”

This is an increase on the 2016 survey.

Employers are still experiencing significant difficulties recruiting employees with STEM skills, particularly amongst technicians and trades workers and professionals. Employers of VET graduates rated relevant work experience as the most important factor in building these skills.

The importance of enterprise and employability skills has increased as a recruiting factor for both the higher education and VET sectors since 2016, reflecting a need for workers with transferable skills in order “to navigate constant change”.

How are employers linking to the education sectors?

“Companies stating they intend to increase their links or establish new links with all education and training sectors over the next year has steadily increased from 2014 – 2018.”

So, that’s good news. There have also been a significant increase in links to VET providers since 2016, while the increase in links to higher education is more modest. Links with secondary schools have been maintained. Significantly, employers with no links to education sectors have decreased considerably.

Industry links to VET providers are highest for apprenticeship arrangements and work placements. A substantial proportion of the apprentices, over 40%, are mature aged. Links to secondary schools are mainly through work placements and work experience. In the case of universities, the links have increased for work placements, partnering for research and project work.

How are companies going to meet their skill needs?

The main strategy employers are using to meet skill needs is to retrain existing staff on the job or employ experienced new staff. However, “there has been a significant increase in the strategy to employ workers with basic skills and upskill them.” So there is another training opportunity for providers, but not necessarily for full qualifications. The survey found that employers:

“…have accessed endorsed skill sets for training from consultants (23 per cent), private training providers (22 per cent) and TAFE (18 per cent).”

Finally, the survey found that over 62 per cent of employers believe a lack of leadership and management skills is having a high impact on the business. Again, the figure is up from 2016.  The survey conclude that:

“the most significant capability improvements required by managers are in technology/digitalisation, resulting in managers being prioritised for this training. Reflecting the need for managers to navigate constant change, employers said their capabilities must also improve for problem solving, initiative and enterprise.”