The industries worst affected by talent shortages and how the government can help

Talent shortages persist as a key concern for employers as we kick off 2023. Nadine O’Regan, general manager at TQSolutions, discussed the industries that have been hit hardest and what the government can do to ease the pressure felt.

HR Leader: “What do you see as the top challenges that businesses are going to be facing in 2023?”

Ms O’Regan: “I would say a lot of confusion and caution. We’re seeing open requisitions are really high; recruiters can’t find enough people. Businesses are still doing really well, and profits are up. But then there [are] other sectors, like technology, that are getting absolutely whacked. So, we are really operating in what I would say is a multi-speed economy.”

“Different sectors are experiencing vastly different things. We’ve still got lots of sectors, though, desperately trying to find and retain people.”

“We’re in uncharted economic territory. So, a lot of companies are being extra cautious and going into a bit of a holding pattern at the moment. I think in 2023, that we are going to see companies having to become nimbler and more efficient. And what I mean by that is they’re going to have to get to terms with understanding their workforce skills. Learning skills, career pathways, all of those sorts of things, I think they’re going to become business critical. Especially as we face an uncertain economy,” explained Ms O’Regan.

HR Leader: “Which industries are being hit hardest by talent shortages?”

Ms O’Regan: “I don’t think that there is any one industry that’s not having a hard time trying to find people at the moment, but there’s certainly some sectors that are doing it tougher than others … Transport, construction, [and] logistics, those industries are growing at an increasingly rapid rate. Plus, we’ve also got hospitality and retail. They’re all in a world of pain, too. The one that really stands out for me, though, is the care economy. So, I would say that the care economy is essentially in crisis.”

“When I say crisis, I mean critical to the point where some companies will be unable to operate without hiring people in significant numbers, fairly quickly. So, the healthcare and social assistance industry is the largest employment industry in the country. I think it’s [around 15 per cent] of the working population is in there. And we are expecting that sector to grow by over 300,000 roles by the end of 2026, so that’s almost 16 per cent.”

Ms O’Regan continued: “The care economy, as a whole, is in pain. But when you dig into the verticals within that, I guess, rural healthcare is in crisis. Childcare is going to be one to look at, because we’ve got, with the new federal budget, these commitments around free childcare, but we literally don’t have enough people in childcare to meet current requirements, let alone increasing demand.”

“Disability care is in crisis, and allied health, they’re all experiencing critical workforce shortages. Aged care in particular. We’ve got a lot of clients in the aged-care space, and they’re in dire straits. Essentially, we need to find an extra 35,000 aged care workers every year to fill growing skill shortages. And if those shortages continue at that level, we are not going to have enough workers to meet the basic needs of care that came out of the last royal commission,” she added.

HR Leader: “What are some resolutions that could ease the pressure these industries are facing?”

Ms O’Regan: “The government has come to the party to an extent, in the last federal budget. But they said that they’d scale up the aged-care training pathway for the Pacific Australia Labour Mobility scheme. But they’re talking about an additional 500 places in 2023, and that’s a drop in the ocean.”

“That’s certainly not going to drag that industry out of crisis. We’ve got people leaving the sector in massive numbers; they’re burnt out. In aged care alone, we had 65,000 people leave the industry this year. And that’s not just going to another employer. They’ve left the sector completely. They’re overworked. They’re underpaid, and they’re burnt out post-COVID-19. So, we need some significant legislative changes if we’re going to be stemming the losses there and attracting people back into those professions.”

Ms O’Regan concluded: “And a silver bullet would be migration. Demand for care workers will be with us for a long time. We’re an ageing demographic, and migration is going to have to be a really important part of a much bigger strategy. But our skills, and training, and migration systems, all need to be working together, and they all need to be complementing each other. And they need to be calibrated to meet current and future skills requirements. The government itself needs to do some workforce planning.”

The transcript of this podcast episode, when quoted above, was slightly edited for publishing purposes. The full audio conversation with Nadine O’Regan on 12 December is below, and the original podcast article can be found here.