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Skilled Trade Labor Shortage In Australia

Skilled Trade Labor Shortage In Australia

October 27, 2021
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The last couple of decades have seen Australia gripped by a major skilled trade shortage across numerous jobs in the construction sector. Although migration has previously reduced this concern, international border closures have caused everyone from electricians to painters to be in high demand.

In fact, the latest Australian Bureau of Statistics data shows that more than a quarter of Australian businesses are encountering widespread issues with finding qualified staff. As the COVID-19 pandemic impacted domestic and international movement, companies across almost every industry have become increasingly desperate for good help.

While this aspect of the Australian economy has received plenty of attention over the years, finding a suitable solution has proved difficult. Currently, 32% of construction businesses report problems with obtaining qualified staff, which has increased by 60% since the start of 2021. Many businesses also report running their business at 70% capacity because of struggles to find staff.

So how did we get here and what can be done? Here, we delve into Australia’s skilled trade shortage and highlight how businesses might be affected in the future.

How We Got Here

The definition of a skill shortage is not as simple as it sounds. While it naturally means there’s a demand for workers that exceeds the available supply, the nature of this shortage could be very different. As highlighted in a Flinders University report from 2007, some shortages are caused by extensive training requirements that see few workers filter slowly into the industry, while others occur when the jobs available are not attractive enough to generate applicants.

Despite the troubles in defining the exact nature of a skills shortage, Australia’s current situation is a result of a combination of economic and geographical troubles that don’t have an easy fix. Some economists point to Australia’s healthy economy keeping the unemployment rate at record lows. This is beneficial to everyday people, but companies will discover that most qualified workers are already employed.

The nature of the construction industry is also unpredictable at the best of times, especially when it involves Australia’s wide-open regional areas. With many skilled workers choosing to move to coastal hotspots like Melbourne or Sydney in search of higher wages, this leaves companies in rural areas with a small pool of workers to hire from. As many regional projects require specialist tradies, finding the best talent can be a challenging process.

What Trades Are In Demand 

This demand has only grown with the impact of the pandemic being felt across the construction industry. For instance, occupations with the highest increase in demand in 2021 include…

Top 12 Trade Industries In Need Of Skilled Labor

  1. Electricians
  2. Construction Managers
  3. Carpenters and Joiners
  4. Metal Fitters and Machinists
  5. Plumbers
  6. Structural Steel and Welding Trades Workers
  7. Painting Trades Workers
  8. Bricklayers and Stonemasons
  9. Cabinet Makers
  10. Air conditioning and Refrigeration Mechanics
  11. Plasterers
  12. Wall and Floor Tilers

With businesses struggling to attract workers over the competition, many have been forced to increase wages considerably to lure people away from their current positions.

Managing director of labour-hire firm Workfast, Tim Nieuwenhuis, recently explained to The Guardian: “Instead of an electrician earning, you know, $100,000 a year, they can earn $130,000 base and they can get up to $190- or $200,000 a year if they do overtime.”

What This Means for the Future

A skilled trade shortage can have serious ramifications. For example, companies will have to invest more time and money into recruitment, leading to higher operational costs. Plus, business productivity and expansion will be negatively impacted as companies lose out on new opportunities. 

As the future of Australia’s international borders remains unclear, there’s a distinct chance that businesses won’t have easy access to overseas labour for some time yet. Naturally, this means local workers can collect higher wages and carefully select which projects they decide to work on. 

With several major projects across Australia expected to get started shortly, trade companies will face even more competition for skilled workers until international borders resume standard operations.

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