‘Skill shortage’ myth-busting

The December Skills Shortage Quarterly (SSQ) report is out now.

The December 2023 quarter spotlight piece covers some skill shortage facts. The term ‘skill shortage’ is often used interchangeably with other terms, such as labour shortages, qualification shortages, skills gaps in the existing workforce, or high turnover.

In the report, we show how Jobs and Skills Australia define the term ‘skill shortages’ and provide insights into the possible causes and potential impacts on businesses and the economy. We also unpack some prevalent misconceptions around skill shortages.

Economy wide factors may cause skill shortages, such as tight labour market, major government spending, or changes in the demographic structure of a population.

For businesses, the most common impact of skill shortages is increased workload for current staff members and increased recruitment costs, while at the economy-wide level, skill shortages can lower productivity growth.

The report also shows that fill rates are rising, gradually, since a trough of 58% in September 2022. In metropolitan areas fill rates (66%) remain well above that of regional areas (59%), indicating skill shortage pressures in regional areas are becoming more pronounced.

Fill rates for Skill Level 1 and 3 occupations remain low which may imply that skill shortage pressures remain for occupations like Education Professionals and Health Professionals (Skill Level 1) and Electrotechnology & Telecommunications Trades Workers and Automotive & Engineering Trades Workers (Skill Level 3).

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