Australia remains woefully under-represented with IT skills, according to the recently published AIIA Digital State of the Nation 2023 report. Worse, the areas with the keenest skill shortages are those where skills will be most in demand.
According to the report, skill shortages remain the single biggest inhibitor to business growth in Australia, at 44%. This is ahead of categories like limited access to finance, limited demand for products and services and supply constraints. One-half of Australian organizations are outsourcing IT roles globally due to a lack of local skills, and AI (56%) and cyber security (40%) were the most commonly outsourced skills.
SEE: Explore methods for recruiting skilled STEM talent.
With Australian organizations looking to embrace AI to improve their local and global competitiveness, and with the Australian government cracking down on poor cyber security practices with new regulations and steeper penalties, the inability of Australian organizations to find these skills is rapidly becoming a critical concern.
- IT to become an even more substantial cost center
- Lack of education increases Australian IT skills shortage
- What can be done to address Australia’s skills shortages?
IT to become an even more substantial cost center
Because the skills shortage is so severe, Australian IT pros are in a stronger bargaining position when it comes to salaries and the choice of companies that they work with. Recent research suggests that 93% of tech employers will see their salaries increase in the coming financial year. Furthermore, roughly one in three IT professionals is looking for a pay rise of 10%, and another third believe that a pay rise of even more than that is in line with the value that they add to their organizations.
Despite the pay rises, organizations will also need to contend with churn. One in three employees is currently considering moving on from their jobs, and 50% of workers between 18 and 54 report exhaustion as one of the key reasons.
With most IT teams facing staffing shortages, and it being difficult to fill roles, IT pros are more at risk of overworking to meet objectives, and therefore burnout is even more likely than in other areas of the business.
Lack of education increases Australian IT skills shortage
The AIIA report paints a concerning picture that the education system is performing badly at producing graduates with IT skills. A dismal 3% of respondents to the report thought the education system produces job-ready graduates, and that’s a drop from 2022’s result of 5%.
Furthermore, for the second year running, nearly half (49%) of respondents reported further training is needed for graduates to be effective employees. These results highlight the concerns the AIIA has with Australia’s current ICT training pathways.
Without properly trained graduates stepping into the IT workforce, current IT professionals will continue to command high wages. As a result, organizations will likely struggle to retain them for long periods of time as understaffing continues to create highly stressful work environments, leading professionals to seek work elsewhere.
What can be done to address Australia’s skills shortages?
The government is flagging changes to the skilled migration program, which are designed to make it more affordable for smaller businesses to recruit overseas talent and reduce the processing time to get the skills into the country more quickly.
“It will eliminate the need for labor market testing, which many employers find cumbersome, especially in industries where chronic skill shortages are well-documented,” Absolute Immigration CEO, Jamie Lingham, noted in an analysis of the changes. Though the changes also substantially lift the minimum salary that a person must earn to be considered a skilled migrant, for the tech industry, this limit ($70,000/year) won’t apply.
The government has also extended post-study work rights across a wide range of sectors, including IT, that allow international students to work more hours and remain and work in the country for more years.
Meanwhile, within enterprises, reskilling existing employees to help fill IT shortages is seeing a significant push, both as a retention strategy and as a way to bolster skills within IT teams. According to research by Equinix, more than 80% of Australian businesses are reskilling people into IT workers, with 56% of Australian IT decision-makers looking to reskill workers from similar industries, while 34% are looking to bolster their workforce with recruits from unrelated sectors.
SEE: Discover the benefits and barriers of upskilling versus hiring.
This can be a significant positive for workers, who are being given ample opportunity to skill up in areas where severe shortages allow them a pathway to better salaries. As the Equinix report noted, “the most common sources of reskilled workers are administration and business support (41%), those returning to work after a period of absence (23%), and transportation and warehousing (21%). These reskilled workers tend to help businesses bridge the tech skills gaps by working in an area like IT technician (41%), cloud computing (36%) and data analysis roles (28%).”
It’s also an opportunity for organizations to hit DEI objectives by giving women and those from underrepresented groups the opportunity for skills development and mentorship programs. Research from Randstad suggests that getting better representation in IT will be critical for addressing the long-term skills shortage.
Fully addressing the IT skills shortage, and preparing Australian businesses for the next evolution of tech-driven business, requires the urgent coming together of both enterprise and government. Across the education sector, hiring practices and post-employment training, a lot of work needs to be done to encourage more professionals to add IT feathers to their skills cap.