Technology is part of the solution to Australia’s massive skills shortage

Out-Law Analysis | 03 Oct 2022 | 2:58 pm | 3 min. read

Australian firms are increasingly turning to automation and digitisation as a solution to the country’s massive shortage of skilled workers.

Australia’s unemployment rate sits at 3.9 per cent, the lowest in nearly 50 years, according to the Australian Bureau of Statistics (ABS), with more than 423,000 job vacancies currently being advertised. But a third (31%) of businesses say they are finding it difficult to hire suitable workers. More than half (59%) of firms struggling to find staff say the problem lies with applicants not having the required skills, while more than three quarters (79%) blamed a lack of applicants.

Labour and skills shortage

ABS data shows that the healthcare and technology industries are struggling to find workers due to a longer-term shortage of skills in Australia. Meanwhile, the hospitality, tourism, manufacturing and trades sectors, hit hard by labour shortages as a result of the pandemic, are not seeing the numbers of international students and holidaymaker visa holders who usually help to fill job shortfalls.

Net migration

Net overseas migration figures show that more than 88,000 people migrated from Australia during the 2020-2021 financial year – the highest number since the first world war. Alongside massive falls in the number of student visa holders and working holidaymakers travelling to Australia, the number of temporary skilled migrants also fell. Overall, Australia’s levels of long-term arrivals are not expected to reach pre-pandemic levels until late 2023 at the earliest.

Meyer Lisa

Lisa Meyer

Senior Associate

To truly harness the potential of technology as a tool to boost productivity and address Australia’s skills shortage, Australian businesses need digital infrastructure that is fit for purpose

Amid a global shortage of skilled workers, Australia’s relatively niche geographic position might be putting off some applicants, as might its relatively small population and economy. In a competitive market, money talks, and Australia’s smaller businesses might simply not be able to compete for talent with global giants.

Australia also has a slow and expensive visa application process. Since March, the new federal government has attempted to expedite tens of thousands of applications for skilled visas, but other classifications still face lengthy delays. A SC482 visa, for a temporary skills shortage, can take up to 65 weeks to process - even in cases where applicants have been nominated by an approved business.

Regional inequality

Like many other countries, Australia also suffers from deep socioeconomic issues that are often most acute in regional and remote areas. Many regional towns lack proper access to important elements of social infrastructure, such as emergency services. In Nymagee, New South Wales, for example, declining volunteer rates and low populations have prompted a local mine to offer the resources of its emergency response team to the local fire service. Issues like these contribute to the number of people who leave remote communities in search of work.

Tech and data solutions

Against this backdrop, there is an increasing appetite for technological solutions to Australia’s labour shortages. According to a report (114 pages / 2.54MB PDF) published by the federal government’s productivity commission, digital technology and data have the potential to significantly improve the country’s productivity.

The commission said millions of phone apps and computer-assisted services already increased efficiency and contributed to Australia’s economic output before the onset of Covid-19, but added that the pandemic accelerated the trend – requiring many businesses to operate only online, with more people working from home.

Automation and digitisation

Businesses in regions of Australia that are struggling to attract and retain workers are also increasingly turning to technological solutions. Farms that rely heavily on working holiday visa holders, for example, are using automation of various cultivation and harvesting processes to monitor their operations remotely and efficiently.

At the same time, tech deals in the mining sector are skyrocketing in value as service providers digitise the work they perform, allowing them to access and share data faster. In recent years, major mining and infrastructure firms have begun acquiring tech companies that focus on data management and communication, including the real-time cloud computing and data analytics to log and transmit data while drilling.

Digitising processes in this way helps to mitigate the risk of injury to front line workers and overcome resourcing challenges by reducing the number of personnel required to provide the services. It also minimises the period of time between gathering the data and accessing it for interpretation, which improves efficiency.

Barriers to adoption

Despite the increase, the productivity commission warned that a number of barriers were preventing the wider adoption of new uses of technology and data across the economy – including inadequate internet, lack of skills, limited awareness and uncertainty about benefits, cost and legacy systems.

It said agriculture businesses are most likely to cite unsuitable internet speed and geographic location as barriers, while high costs are more frequently identified as a barrier by medium and large businesses. The commission also highlighted a lack of clear rules about access and rights to data as an obstacle to increasing digitisation and said that many businesses were currently likely to underinvest in cyber security.

Addressing the issues

To truly harness the potential of technology as a tool to boost productivity and address Australia’s skills shortage, Australian businesses need digital infrastructure, like broadband and mobile networks, that is fit for purpose. This is acknowledged in the government’s Universal Service Guarantee for broadband connectivity, but low-quality connectivity outside of Australia’s cities is an ongoing issue.

Governments at the federal and local level should also look for more efficient ways to fund digital infrastructure investments and improve public sector data sharing. According to the productivity commission, there is still “significant room for improvement” to generate value and productivity growth from the use of data.

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