While Australia is creating plenty of new jobs, helping in part to lower the nation’s official unemployment rate, that’s only telling part of the story about what’s going on in the labour market right now.
As pointed out by the Reserve Bank of Australia, among others, the decline in unemployment rate seen in recent years has masked an increase in labour market slack, essentially people in the workforce whose labour is not being being fully utilised.
In the minutes of the bank’s October monetary policy meeting, released earlier today, board members noted that Australia’s underemployment rate, which captures workers who would like to work more hours, “had increased over the past year”.
It also noted that “part-time work had accounted for all of the increase in employment since the beginning of the year, with full-time employment having been little changed”.
That fits with latest information from the Australian Bureau of Statistics that revealed Australia’s underemployment rate, at 8.6%, was at at the highest level on record in August.
The nation’s underutilisation rate — combining unemployed and underemployed workers — also increased, rising to 14.3%, well above the levels seen during the peak of the global financial crisis back in 2009.
It all points to heightened levels of labour market slack, an excess of workers to available labour demand, which has contributed to the recent deceleration in Australian wages growth.
And that fact has been further reinforced by the latest ManpowerGroup annual Talent Shortage Survey, released earlier today.
As a result of the abundance of labour available to employers right now, it’s seen the number of Australian firms reporting problems with finding workers with appropriate skill levels fall to a near-decade low.
According to survey, capturing responses from over 1,500 employers around the country, the proportion of firms reporting skill shortages fell by 4% to 38% this year, the lowest level reported since 2007.
The survey revealed a lack of experience (23%), lack of available applicants (21%) and lack of hard skills (20%) were the top three reasons why Australian firms were unable to fill positions at present.
According to Richard Fischer, managing director at ManpowerGroup Australia and New Zealand, “the results reveal a slight softening in Australia’s labour market”, a view that fits with recent data released by the ABS, particularly surrounding underemployment.
While abundant labour is helping to lessen skill shortages in some industries, Fischer says that there’s “still challenges for employers when it comes to sourcing and securing the right talent”.
“Looking at the current economic outlook for Australia, it’s unlikely this talent shortage figure will continue to drop significantly.
“Especially when looking at highly skilled industries such as the IT sector, where demand is likely to rise even further in the coming years as roles around integration of mobile application, solutions and cloud computing rapidly increase.”
After analysing the findings of the survey, the group produced a list of the jobs cited by firms as the hardest to find workers with suitable skill levels, comparing the results to those seen in the previous survey conducted in 2015.
As has been the case in the past 10 surveys, skilled trades topped the list for difficult roles to fill.
“Previously, this was linked to creation of roles through the mining boom. Now, although we continue to unwind from this period, we have shifted into a construction bonanza, driven by large infrastructure projects across Victoria and New South Wales,” says Fischer.
“This has seen sustained demand for specialist skilled trades and engineers.”
In an attempt to address skill shortages in these areas, Fischer says that 76% of employers indicated that they were now training and developing existing employees to fill available positions.
Upskilling workers, in other words.
“With so many new fields emerging, it’s becoming increasingly more difficult for organisations to find the right talent with the needed experience,” says Fischer.
“As a result, organisations are choosing to invest in upskilling and traineeships. If employers can’t find the perfect fit, they seek the ‘teachable’ fit and invest in their employees.”
Fischer believes this “learnability”, as he’s coined it, “will help individuals become and stay employable throughout their career journey, and materialises a trend we believe will continue over the coming years”.