Australia’s productivity is being significantly impacted by skills gaps, with 57% of employers facing challenges, according to a recent AHRI report. The study, based on insights from 607 senior business leaders across various sectors, reveals that nearly one in five employees (19%) are considered “not proficient” in their roles. This issue is particularly pronounced in the public sector, where 24% of employees fall short, compared to 18% in the private sector.
The rapid integration of AI and other advanced technologies has exacerbated these challenges, necessitating continuous updates to skills once considered lifelong. Today, the World Economic Forum estimates the half-life of a skill to be around five years.
Despite these obstacles, employers are taking proactive measures. Over three-quarters (77%) are actively enhancing their talent pipelines. Key drivers of skills gaps include evolving business needs (44%) and the dynamic skills landscape (42%). Factors such as a lack of skilled candidates and insufficient investment in training (each cited by 25% of employers) further compound these challenges.
Employers are responding with increased investment in training, particularly in technical skills (26%). They are also leveraging initiatives like mentoring schemes (38%) and apprenticeships (30%) to nurture talent internally. Notably, more than two in five employers (41%) are turning to overseas recruitment to address skills shortages, with intentions to increase these efforts in the coming year.
Navigating these complexities requires a strategic approach. Regular skills gap analyses and tailored HR strategies are essential for sustainable talent management and organisational success.
