Australia has a severe IT skills shortage

According to the recently published AIIA Digital State of the Nation 2023 report, Australia is severely under-represented in terms of IT skills. Worse yet, the areas with the greatest skill shortages are those where the greatest demand for skills will be.

According to the report, the skills shortage remains the biggest barrier to business growth in Australia with 44%. This is further compounded by categories such as limited access to finance, limited demand for products and services, and lack of supply. Half of Australian organizations are outsourcing IT roles globally due to local skills shortages, and AI (56%) and cyber security (40%) were the most outsourced skills.

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As Australian organizations seek to adopt AI to improve their local and global competitiveness, and the Australian government is cracking down on bad cyber security practices with new regulations and tougher penalties, Australian organizations are unable to find these skills. is fast becoming a serious concern.

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IT will become an even more important cost center

Because the skills shortage is so severe, Australian IT professionals are in a strong bargaining position when it comes to salary and the choice of companies they work with. Recent research shows that 93% of tech employers will see their salaries increase in the coming fiscal year. In addition, roughly one in three IT professionals are looking for a pay increase of 10%, and a third believe a pay increase of even more is commensurate with the value they add to their organizations.

Despite the pay hike, organizations will also have to deal with churn. One in three workers is currently considering leaving their job, and 50% of workers between the ages of 18 and 54 cite burnout as one of the main reasons.

With most IT teams facing staff shortages, and roles becoming increasingly difficult to fill, IT professionals are more at risk of overworking to meet objectives, and therefore burnout, than other areas of the business. Chances are even higher.

Lack of education fuels Australian IT skills shortage

The AIIA report paints a worrying picture that the education system is performing poorly in producing graduates with IT skills. A disappointing 3% of respondents in the report thought the education system produces job-ready graduates, and this is down from 5% for 2022 results.

In addition, for the second year in a row, nearly half (49%) of respondents reported that graduates need more training to be effective employees. These results highlight the AIIA’s concerns about Australia’s current ICT training pathways.

Without properly trained graduates stepping into the IT workforce, current IT professionals will continue to command high salaries. As a result, organizations may struggle to retain them in the long run as staff shortages are creating highly stressful work environments, forcing professionals to seek work elsewhere.

What can be done to address the skills shortage in Australia?

The government is marking changes to the skilled migration programme, designed to reduce processing times to make it more affordable for small businesses to recruit overseas talent and bring skills into the country more quickly.

“This will eliminate the need for labor market testing, which many employers find burdensome, especially in industries where chronic skills shortages are well documented,” said Jamie Lingam, CEO of Absolute Immigration, in an analysis of the changes. Although these changes also substantially increase the minimum wage a person must earn to be considered a skilled migrant, for the tech industry, this cap ($70,000/year) will not apply.

The government has also extended post-study work rights in several sectors, including IT, allowing international students to work longer hours and to live and work in the country for more years.

Meanwhile, within enterprises, a significant push is being seen on re-skilling existing employees to help fill the IT shortfall, both as a retention strategy and as a way to enhance skills within IT teams. as methods. According to research by Equinix, more than 80% of Australian businesses are looking to reskill people as IT workers, 56% of Australian IT decision-makers are looking to reskill workers from similar industries, while 34% are looking to reskill unrelated people Looking to expand your workforce with the recruitment of . Area.

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This could be a significant positive for workers who are being given ample opportunity to acquire skills in sectors where severe shortages provide them a path to better wages. As the Equinix report states, “The most common sources of reskilled workers are administration and business support (41%), returning to work after a period of absence (23%), and transportation and warehousing (21%). Reskilled workers help businesses bridge the technical skills gap by working in areas such as IT technicians (41%), cloud computing (36%) and data analysis roles (28%).

This is an opportunity for organizations to meet the objectives of the DEI by offering skill development and mentorship programs to women and people from under-represented groups. Randstad’s research shows that achieving better representation in IT will be key to addressing the long-term skills shortage.

Both enterprise and government urgently need to come together to fully address the IT skills shortage and prepare Australian businesses for the next evolution of tech-driven business. In the education sector, a lot of work needs to be done to encourage more professionals to add IT wings to their skill set, in recruitment processes and post-employment training.