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Australia and skill shortages: the answer is close to home

Australia is always confronting workforce skill shortages of some kind – but at least part of the solution is right in front of us, with upskilling and reskilling workers via workplace learning and development (L&D) one path towards better meeting demand.

Deloitte Access Economics has recently explored the business return on learning and development for DeakinCo. and, along with the productivity benefits on offer from greater skills development, the research suggests (emphatically) that L&D also contributes to higher employee retention.

Informed by a survey of 200 large Australian businesses, the research categorised organisations into four levels of learning maturity – Laggard, Beginner, Intermediate, and Advanced – based on 13 unique indicators spanning four pillars of learning: strategy, culture, measurement, and structure.

It found that 87% of businesses could do more to enhance their L&D efforts, with just 13% classified as Advanced learning organisations (Chart 1).  And when comparing attrition rates across businesses, the research found that Advanced learning organisations reported an average attrition rate of 14%, compared to almost 25% for Laggard organisations – 1.8 times higher.

Chart 1: Learning maturity among Australian businesses

Source: Deloitte Access Economics business survey

Latest job vacancy data from the Australian Bureau of Statistics shows there are currently 423,000 job vacancies across the country – 86% higher than pre-pandemic levels recorded in February 2020. Migration as a well-established source of skills is starting to flow back, but strong international competition, and a significant backlog of skill needs, means the war for talent remains acute.

Australia’s skill shortages have been compounded by rapid digitalisation since the onset of the pandemic. Indeed, nearly three quarters of businesses agreed that L&D became more of an organisational priority due to COVID-19. And though most employees may have some level of digital literacy, 26% of all businesses surveyed reported digital literacy as a key skills gap.

The research further supports the connection between employee engagement and business performance. In this vein, many businesses are supportive of the concept of a four-day work week. In fact, more than four in five (84%) of those surveyed either agreed or strongly agreed that a four-day work week could help boost employee productivity and wellbeing.

Interestingly, the research also found that organisations more advanced in their approach to L&D were much more likely to strongly agree that a four-day work week could help boost employee productivity and wellbeing – with 76% of Advanced organisations strongly agreeing, significantly higher than the 40%-45% recorded for Laggards, Beginners and Intermediate organisations.