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Combating skills gaps has proved a consistent threat to organisations in recent times. Being agile, as well as smart about countermeasures, is the best way that leaders can pull through these tough times.
In fact, Australian HR Institute (AHRI) chief executive Sarah McCann-Bartlett recognises skills gaps as “the most pressing issue for employers right now”.
This view is supported by AHRI’s June Quarterly Australian Work Outlook report, which revealed that 20 per cent of workers aren’t proficient in their role, and 57 per cent believe these skills gaps are having a negative impact on productivity.
Compounding the skills issues is the tight labour market and high employee turnover, serving as a perfect storm of suffering for many businesses.
“There are a number of issues. If you bring all of the data together, it tells a compelling story on skills in the workplace. It’s still a very tough labour market, and there’s very high employee turnover,” McCann-Bartlett said.
“The average turnover rate is 15 per cent; 32 per cent of organisations are reporting the annual average is over 20 per cent. High turnover means you have skilled employees leaving an organisation, leaving a skills gap. This continues to be there until you train employees to be fully competent in their role.”
Driving high turnover is a strong employment market, noted McCann-Bartlett. This means employees are spoiled for choice, and they know it. However, the cost-of-living crisis is also playing a role, forcing many to seek increased wages to remain afloat amid a grim economy.
Demand for talent is expected to grow in the coming quarter, with net employment intentions of +36, up from +33 recorded in the March quarter. Currently, 40 per cent of those recruiting noted experiencing trouble doing so, up from 38 per cent last quarter.
So, how can employers tackle these seemingly insurmountable issues? Listening to the wants and needs of employees is a start, and according to McCann-Bartlett, they want training.
“Apart from wages, employees are really looking at upskilling opportunities. They want training. Workers are leaving employers for upskilling and training opportunities and career growth,” she said.
“We’re only at the early stages; bridging the skills gap, it isn’t going to happen overnight. Employees will need further upskilling.”
To assist in reducing the skills gap, competency must be achieved. Through onboarding and upskilling, employers can fast-track time to competency and get skilled workers contributing as fast as possible.
According to McCann-Bartlett: “Time to competency has two aspects: one is time and one is are they actually competent. They have to be supported with the onboarding and upskilling process.”
Thankfully, many are realising the potential of skills development, with 37 per cent of organisations planning to increase training investment in their organisation in the next 12 months, while just 6 per cent intend to cut their training budget.
The final piece of the attraction/retention puzzle is benefits. Seeing a surge in popularity post-pandemic, the power of benefits can be a lifeline for organisations that are unable to offer inflated wages.
“Employers are telling us that in order to address recruitment difficulties, they’re upskilling employees they have, and they’re also looking at wage increases and improving benefits,” said McCann-Bartlett.
“Employee benefits and EVP will continue to be really important. What that looks like for each organisation and employee will be different. One size doesn’t fit all. Employees are saying, ‘we want training and upskilling opportunities’, but it’s the balance of what the employees want and what employers need.
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Benefits include any additional incentives that encourage working a little bit more to obtain outcomes, foster a feeling of teamwork, or increase satisfaction at work. Small incentives may have a big impact on motivation. The advantages build on financial rewards to promote your business as a desirable employer.
Training is the process of enhancing a worker's knowledge and abilities to do a certain profession. It aims to enhance trainees' work behaviour and performance on the job.
Turnover in human resources refers to the process of replacing an employee with a new hire. Termination, retirement, death, interagency transfers, and resignations are just a few examples of how organisations and workers may part ways.
Jack Campbell
Jack is the editor at HR Leader.
