An Ai Group survey has found that nearly three quarters of CEOs expect skills and workforce constraints to be among their greatest challenges for the year ahead.
73% of CEOs surveyed said they expect difficulties finding and retaining skilled labour this year.
When CEOs were asked where they predicted the greatest difficulties finding and retaining staff in 2022, they responded with a long and varied list, spanning labourers, Technical and Trades Workers and Professionals. This shortage of skills right across the value chain speaks of a deep and widespread skills problem.
When asked about the factors they expect to constrain their business in 2022, over a third of CEOs cited skills issues. It was the third most cited response after COVID-19 activity restrictions and supply chain issues.
The two most common approaches cited to dealing with the issue were upskilling existing staff (26%) and employing apprentices and trainees (17%). This shows a strong commitment to training and development in general, as well as a vote of confidence in the apprentice and trainee system.
The next most cited strategies could be seen as responses to the tight jobs market, with 15% of these CEOs stating they plan to increase wages, focus on retention strategies (12%) and increase workplace flexibility (8%) in a bid to secure and keep the skills they need.
Skills shortages are leading many to invest in developing their existing talent pool, as well as improving conditions of employment to ensure they remain a desirable employer of choice. There was also a recognition of the need to hire graduates or entry level workers and upskill them to the level required, with 11% of responses citing this as a strategy to be pursued in 2022.
The survey also tells us that Australian CEOs are responding to current conditions with a necessary and deliberate focus on their existing workforce. The vast majority (90%) intend to spend at least as much on staff training and development in 2022 as last year, with almost half (48%) expecting to spend more.
Ai Group contends that to avoid skills shortages becoming a significant handbrake on productivity and economic growth, pressure points need to be alleviated in the short term, and structural change in the education and training system must be tackled in the medium term.
Collective investment in skills development is needed; a coordinated map that shows how domestic graduates combined with skilled migration can meet projected jobs growth should be established; the apprenticeship model must be strengthened and expanded, including higher level apprenticeships; and opportunities to combine learning with on-the-job experience across the tertiary sector should be increased.
Centre for Education and Training Research Note
The full Ai Group CEO Survey is available here
It is based on responses from the CEOs of 346 private-sector businesses across Australia in October 2021. Together, these businesses employed 119,827 people (378 people in each business on average) and had an aggregate annual turnover of around $74 billion in 2021. All Australian states and all major non-farm private-sector industries are represented in this year's CEO survey.
Brett contributes to the Centre’s ongoing research and policy development projects. As the Centre’s main data collector and analyst, he is interested in finding and drawing links between various datasets and developing evidence-based policy that can lead to improved system performance and productivity growth.
