What can Australian organisations do about increasing shortages in required skills/talent? Work on demand side of equation!

Australia may have survived the global financial crisis relatively unscathed, but will it survive the skills and labor crisis which is now imminent? Both government and business seem ‘stuck’ in trying to solve the crisis primarily through ‘supply’ and/or ‘buy’ solutions. However, effectively working the ‘demand’ side of this challenge is likely to deliver more sustainable and achievable outcomes in accelerated timeframes.


Last year’s workforce effectiveness/productivity rhetoric from the government hasn’t been enough to address the issue of significant labor shortages. Action by government and business is now required quickly if are to avoid ‘running out’ of the people/skills needed to deliver a healthy and growing Australian economy. A quick sample of Australian Financial Review articles from last week highlight a range of themes which outline the imminent and significant risk faced by Australia from increasing labor shortages:

·         Peter Ruehl highlights the challenges of the ‘big Australia’ debate, the weakness of successive Australian governments to address this issue, and the damage being perpetrated to Australia’s future by a myopic, anti-immigrant minority. Over 140,000 skilled migrants remain caught in a bureaucratic logjam while Australia has more work than workers

·         Continued upward wages pressure arising from current talent shortages in the Australian economy, and its consequent impact on Australian competitiveness

·         Predictions of further reductions in Australia’s unemployment rate from 5% to 4.1% in 2011-12 (Australia is an economy approaching near full employment). Talent shortages are here to stay and will only increase in the next 2-5 years.

·         The impact that  Australia’s multispeed economy is having on increasing the negative competition for talent between different industry sectors. Over time, expect key industries to be cannibalised to meet the needs of industries with more compelling value propositions e.g. Manufacturing, Retail, Hospitality industries being used as potential labor sources by the Resources sector

·         The increasing trend to search for executive talent from overseas sources to meet Australian business demand

·         Increasing calls from business to the government that budget measures address Australia’s ability to expand capacity or enhance productivity


While the last point made by the Australian Industry Group’s, Heather Ridout, reads as a bet both ways it also highlights the need to address the two sides of the workforce management equation. In the past, ‘optimisation’ efforts have been primarily about reducing heads to reduce cost. Going forward, ‘workforce optimisation’ needs to be about reducing the demand for more talent, and maximising the output from the talent that already exists. As practitioners, we must help organisations to address the ‘demand’ side of the workforce management equation by focussing on the following:

·         Working out what is really required from an organisation’s human capital (critical roles, critical skills not able to be done through technology/other means), and revising this on an ongoing basis

·         Helping organisations to craft and deliver compelling value propositions to attract and retain the required human capital

·         Segmenting the required human capital to deliver targeted workforce management solutions/interventions

·         Improving the use of automation, processes, technology, and decision support to reduce the need for human intervention

·         Using different methods of management, organisation and motivation to minimise the need for supervision

·         Creating effective and accelerated techniques for inducting, developing and/or re-training individuals and workforces

·         Encouraging the use of outsourced/offshore resources in appropriate ways – effectively utilising ‘contingent’ workforces

·         Leveraging both formal and informal organisational networks to get work done efficiently

·         Improving knowledge and/or intellectual capital management and accessibility across an organisation


Some thoughts for consideration…