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Australia’s CEOs have made some progress towards addressing skills shortages, but more can still be done. This includes having a clear vision of the skills that will be required in future, upskilling their existing workforces, collaborating with educators and other institutions, and taking a strategic approach to talent retention.
Automation, data analysis, artificial intelligence and other emerging technologies are heralding a new world of work. Each and every person deserves to have the awareness, understanding and capability to thrive in this new world. And, for many, that will require the learning of emerging skill sets.
Australia’s CEOs are increasingly aware of this issue. 78% say that availability of key skills is a top threat to growth, up from 71% last year.
Our ‘New World. New Skills’ survey showed 60% of Australian adults are worried that automation is putting jobs at risk - yet there is readiness among Australians to learn. 69% of adults are prepared to learn new skills or completely retrain in order to improve their future employability (this figure jumps to 77% among 18–34 year-olds).
Business leaders can help solve this skills mismatch, yet only 23% of people say that upskilling is happening within their workplace.
One of the greatest challenges with upskilling is defining the skills required, and 31% Australia’s CEOs (ahead of 27% of global peers) say they’re making progress here. This process is most effective when there is a clear vision of where the organisation is heading and the specific skills required to take it there.
Technology is an enabler of growth. But growth also requires curious leaders who embrace change, broaden their own knowledge and role model technology. In Australia, more than a third of CEOs say that progress is being made around improving workers’ and leaders’ knowledge of technology and its potential implications (36% compared to 29% of global peers).
However only half of Australia’s CEOs (15% versus global 31%) say their upskilling programmes have been very effective at achieving greater innovation and accelerated digital transformation. And while 38% of local CEOs say progress is being made to establish upskilling programmes, only 13% say they’ve made significant progress.
Amidst a chronic shortage of existing talent, Australia’s employers face escalating costs associated with hiring and retaining rare talent. Simultaneously, they have a responsibility to protect their existing workforce to ensure future prosperity for all.
For employers, a logical response to this is to upskill their existing workforce. In 2018 a slight majority of Australian CEOs (54%, global 67%) recognised their ongoing reskilling responsibility, agreeing they should retrain employees whose tasks and jobs are automated by technology.
But recent PwC research suggests that Australian workers are less likely to be upskilling at work than their global peers.
Only 23% are currently upskilling through their employer, which places Australia as the second least likely across the globe - behind the UK - to have people upskilling through their employer.
Where a pipeline of talent doesn’t currently exist or is still being built, the local market relies on the ability to attract employees from overseas. In 2015, 31% of CEOs felt that cooperation between governments was leading to greater movement of skilled labour between markets. Today that figure has more than halved to 14%.
This could reflect current visa restrictions and the scrapping of the 457 visa program for skilled migration in favour of a new visa with tighter restrictions. While the government has taken steps to ease sponsorship visa restrictions, many CEOs remain uneasy.
Of the 80% of Australia’s CEOs concerned about over-regulation as one of the top threats to growth, one in five (22%) cite immigration and global talent flows as an area of regulation they are most concerned about. It appears that fresh solutions are required to ensure red tape does not prevent much-needed talent flows.
Organisations need to become part of Australia’s skills solution. Employers must collaborate with schools, universities, government and even competitors to build and prepare tomorrow’s workforce.
However, nearly a third of local CEOs (30%, global 22%) say they’ve made no progress in collaborating with academic/government institutions on the skills needed for the future.
Business leaders can help repair Australia’s skills pipeline from classrooms to workplaces by providing educators with a more complete picture of the future skills that will be required. This can help shape curricula, and inform further collaborations between universities and businesses (e.g. industry co-designed learning or even individualised project-based learning such as short module credit learning).
Local progress is also being made where businesses are collaborating with one another to grow the talent pools that industries require. Government can provide further support by incentivising sectors to join forces in this way.
While upskilling is one part of the challenge, another is holding on to employees once they have been upskilled. To do the latter, employers need to know what makes their people tick.
Organisations need to understand how different segments of workers want to work. That includes identifying how views, values and perspectives differ across generations. For example, as the workforce becomes increasingly transitory, some employees are expecting more bespoke and tailored development opportunities.
Staff retention is certainly helped by equipping people with technical skills, but employees also have a range of other expectations. The prospects of retaining top talent are enhanced when employers also anticipate needs around working conditions, ways of working, flexibility, incentives, leadership, tailored development, corporate culture, values and inclusiveness.
In terms of diversity and inclusion, Australia’s CEOs are relatively upbeat. 40% of local CEOs (compared with 26% of global peers) say significant progress has been made when implementing diversity and inclusion strategies to attract a wide range of talent and ensure inclusiveness.
Organisations are competing for key talent and skills, and so an investment in the ‘whole’ employee experience is integral. The benefits of upskilling programmes; stronger corporate culture and employee engagement, higher workforce productivity, improved talent acquisition and retention, differentiate organisations out in the marketplace.
refer to the business strategy and vision to define the (soft and technical) skills that will be required in future, then identify the skills gaps and mismatches
understand the opportunities with emerging technology and improve workers’ and leaders’ knowledge of technology and its potential
engage with educators and government to prioritise the required skills
understand the value of diversity and inclusion. Remove any systemic barriers preventing the organisation from attracting and retaining top talent
engage government to help ensure greater movement of skilled labour between markets.
Partner, People & Organisation Consulting, PwC Australia
Tel: +61 (3) 8603 6504
Head of Content and Thought Leadership, PwC Australia
Tel: +61 (2) 8266 0252