Australia’s skills gap costly, wasteful and widespread: a report on the nature and depth of skills shortages in manufacturing

The Australian Industry Group’s (Ai Group’s) skills policy statement, ‘World class skills for world class industries’ (indexed at TD/TNC 83.252) highlighted that ‘Australia would face a skills crisis in the next five years as the existing workforce retires and the number of new tradespersons are insufficient to fill the gap’. This review further explores skills gap and the findings indicate that the skill shortages faced by industry are here and now. Among the findings are: 86% of firms regarded skills enhancement as very important/important to their business competitiveness; 28% of productivity improvement over the next two years was expected to come from skills enhancement; one in two firms surveyed were experiencing difficulties in obtaining skilled labour; skilled vacancy rates were inversely related to firm size, with small firms having the highest vacancy rate; national skill shortages are estimated to be 21,000 positions; companies are considering a range of options to deal with skills shortages, including retraining existing staff, lifting capital intensity, and engaging additional apprentices/student placements; almost 60% of firms said they would focus on retaining existing staff and on average, companies spend around $650 per employee on training, with this figure likely to rise over the coming years; around 17 apprentices are employed for every 1,000 employees; apprenticeship uptake is highest in sectors facing shortages; Queensland had the highest rate of apprentices, while the two traditional manufacturing states, Victoria and South Australia, had the lowest rate; apprenticeship rates are inversely related to firm size, with small firms having a higher participation rate; over 73% of firms indicated they had one or more student placements; student placements were generally inversely related to skills shortages, with sectors having the highest skills shortages experiencing the lowest rate of student placements.

The Australian Industry Group’s (Ai Group’s) skills policy statement, ‘World class skills for world class industries’ (indexed at TD/TNC 83.252) highlighted that ‘Australia would face a skills crisis in the next five years as the existing workforce retires and the number of new tradespersons are insufficient to fill the gap’. This review further explores skills gap and the findings indicate that the skill shortages faced by industry are here and now. Among the findings are: 86% of firms regarded skills enhancement as very important/important to their business competitiveness; 28% of ...  [+] Show more