Changes in skills gaps to impact productivity, innovation

A new study from Jobs and Skills Australia reveals that lifelong learning is key to improving people’s ability to navigate both disruption and opportunity in a rapidly changing labour market.

Employers who want to stay on top of productivity, competitiveness, and innovation must stay on top of the rapidly changing workforce skills gap, Jobs and Skills Australia (JSA) found in its latest working paper.

In its report, Forces at Work: Adult Learning and the Australian Labour Market paper, JSA revealed a rapid change in skills requirements across most occupations, driven by technological change, increasing job complexity, and ongoing structural shifts in the economy.

Over the past three years, human capabilities, business skills, law, regulation and compliance skills, and information technology skills accounted for around half of the skill change.

“Employers face risks of skills gaps if the skills mix of their workforce does not keep pace with changing skill requirements,” JSA said.

According to a 2024 Australian Industry Group survey, 88 per cent of employers reported that low levels of foundational skills impacted their business and firm-level productivity.

Further, it revealed that between 2005 and 2023, employers increasingly cited legislative, regulatory, or licensing requirements as the reason for nationally recognised training in their workforces (increasing by 22 percentage points). The number of employers who rolled out unaccredited training for the same reasons also increased by 22 per cent in the same period, it also found.

Additionally, among employers who delivered AI training in their workplaces in the last 12 months, over 80 per cent provided informal training, 30 per cent provided unaccredited training, and 4 per cent provided nationally accredited training, it revealed.

Minister for Skills and Training Andrew Giles said: “Skills development is not a one‑off event – it’s a lifelong journey. It’s important for Australians to have access to the training and learning they need to thrive, no matter where they start or where their career takes them.”

Professor Barney Glover AO, commissioner at JSA, said: “The Australian labour market is constantly evolving, and our skills system needs to evolve with it ... As Australians live and work longer, supporting learning across the life course will be increasingly important for productivity, participation and economic resilience.”

According to the JSA working paper, “structural change can provide an impetus for reskilling, especially where high rates of retrenchment are combined with declining employment in an industry, occupation and/or region.”

JSA noted that Australians who continue working later in life may have increased motivation to improve work-related skills.

“This has the potential to challenge stereotypes about older workers, including that investing in their training is less worthwhile for the firm compared to younger workers due to concerns about shorter remaining tenures,” the report said.

Carlos Tse

Carlos Tse is a graduate journalist writing for Accountants Daily, HR Leader, Lawyers Weekly.

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