Skills Shortage holding back Australian business
- 48% of SMEs believe there is a clear skills shortage in their sector.
- 62% of SMEs say university and college graduates are not ‘job ready’.
- Around 1 in 3 SMEs said self-motivation, adaptability and services orientation will be the types of skills needed most in coming years.
- 68% of Australian SMEs worry Australia isn’t properly training our workers.
A serious skills shortage is hampering business growth and opportunity in Australia with new research finding that Small to Medium Businesses (SMEs) cannot find the right staff to grow their company.
The second report in NAB’s Moments that Matter: Understanding Australian SMEs whitepaper series, jointly undertaken by global firm IPSOS and the NAB Economics team, has found almost half of SMEs believe there is a clear skills shortage in their sector. Nearly 62% say university and college graduates are not ‘job ready’ and 68% of Australian SMEs worry Australia isn’t properly training our workers.
Angela Mentis, Chief Customer Officer of Business and Private Banking at NAB, says the research builds on the first report of this series, which explored the state of play for Australian SMEs and found customer satisfaction matters most for business owners.
“Despite high business confidence and conditions we are finding SMEs are reluctant to expand and say a skills shortage is holding them back,” she said.
“This second chapter is a stark reminder that SMEs – the lifeblood of the Australian economy – need the right support in order to prosper and develop. SMEs are central to community and job creation and as a country we need to know what is stopping them from taking that next leap,” she said.
“More than 70% say they believe Australia is a great place to have a business – but they are being hampered by a number of factors including workers with out-dated skills. They are telling us the ‘soft skills’ workers will need over the next five to 10 years are self-motivation, adaptability and services orientation.”
To fill the current skills gap, 1 in 4 SMEs are employing skilled migrants, particularly larger SME businesses, but interestingly the research found the abolition of 457 visas for skilled migrants would not have a marked effect across the board.
SMEs in telecommunications, health services and transport and storage saw the biggest impact from the proposed 457 visa changes and Western Australia was affected the most, presumably reflecting the role migrant workers played during the state mining sector boom. Those in rural towns thought it would have little negative impact, suggesting there is sufficient capacity in the domestic labour market to meet their needs.
“This report suggests that SMEs are adapting to changing workforce conditions but require more support in skilling their workers and in hiring graduates who are ready to hit the ground running,” Ms Mentis said.
“As a major employer in this country, we know our workforce dynamics are changing- and that skills that we need in the next five to 10 years are critical to our success. We recently announced*hyperlink digital online applications to replace the traditional CV, because we recognise that the skills of tomorrow are better communicated via digital platforms such as video. A piece of paper just can’t relay that information,” she said.
Ms Mentis said the second chapter of the whitepaper was another step forward in making sure that NAB is plugged into the changes that are occurring on the front line.
“Small businesses make up between 95 and 97 per cent of all Australian businesses and the success of Australian SMEs is an important public policy issue given its impact on the broader national economy,” she said.
“We know NAB has an important role to play and that is why will keep talking and listening to our businesses, but we need the whole of the community – government, academics, policy makers – to come together so we can all better support SMEs to take that next leap.”
The skill shortage is hampering growth
More than 70% of SMEs believe Australia is a great place to have a business and be successful. However, the skill shortage is hampering growth, with 48% of SMEs believing that there is a clear skills shortage in their sector and 62% of SMEs say university and college graduates do not have the skills to be ‘job ready’.
Australia’s future workforce is under threat
Nearly 70% of Australian SMEs worry Australia isn’t properly training our workers and more than 50% say we are losing our best and brightest overseas.
Workers will need to develop new skills to adapt to changing industries
The report found 1 in 3 SMEs believe the ‘soft skills’ workers will need will be self-motivation, adaptability and services orientation.