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Building your Workforce

Skill Shortages

Skill shortages are, in most cases, a feature of a strong labour market and tend to arise when there is a strong, growing economy.

Notwithstanding changing rates of economic growth, Tasmanian businesses, for the foreseeable future, are likely to continue to experience skill shortages because of changing workforce demographics. Demographic change will decrease the size of the available labour force, whether skilled or unskilled.

Already many areas of Tasmania have more people leaving the labour market than entering it.

A contemporary definition of skill shortage is:

“when the demand for workers for a particular occupation is greater than the supply of workers who are qualified, available and willing to work under existing market conditions”[1]

This definition of skill shortage makes an important distinction when it defines skills shortage as existing ‘under current market conditions’. Businesses have the power to respond to ‘market conditions’ by offering above-market incentives, increasing their potential to attract and retain skilled labour. It also underpins the Tasmanian government’s belief that attraction and retention of skilled labour is primarily the responsibility of business and industry.

The reality is there is much potential for employers in Tasmania to attract and retain skilled labour though it may well require a shift in attitude. Incentives may include offering above-market salaries or wage rates, relocation expenses, a car, a home - particularly in regional areas where housing is scarce, employment opportunities for partners and/or children, training, career pathway planning and development.

What can your business do?

Your business can improve the way it attracts and retains staff by doing things like:

  • Offering competitive salaries or wage rates
  • Offering relocation expenses, a car, assistance with childcare, housing or accommodation – particularly in regional areas where housing is scarce
  • Improving working conditions, providing mentoring, career pathway planning and development
  • Encouraging staff to have a healthy work-life balance by offering flexible work arrangements, eg part time
  • Demonstrating strong leadership
  • Fostering a culture of inclusive decision making
  • Making your business an ‘employer of choice’

You may need to adopt different strategies for different groups of staff, for example

  • Mature aged workers may appreciate the opportunity to provide mentoring for junior staff, or may need flexible work arrangements to care for elderly parents, or phase in their retirement.
  • Younger staff (eg ‘generation Y’) may have quite different needs. They may appreciate access to quality training, and sponsorship of quality team-building exercises and social events that create a close bond between staff.

The following model (from the Australian Government’s Bureau of Transport and Regional Economics) provides a map of the respective roles of government, employers and employees, including those areas where responsibilities cross over.

For a better understanding of the nature and drivers of skills shortages, and the respective roles of government, employers and employees in addressing skill shortages, go to http://www.btre.gov.au

[1] Shah, C and Burke, G 2003 Skills shortages: concepts, measurements and implications, Centre for the Economics of Education and Training, Monash University