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Skills shortage expected to rise as economy improves

6/12/2009 – Australia’s shortage of skilled labour will worsen as the economy improves, according to a survey by the Australian Institute of Management (AIM).

The Victorian and Tasmanian branch of AIM surveyed 2,163 executives over October and November, with most responses from Victoria and Queensland.

Seventy-six per cent of the executives said their organisations had a workforce skills gap.

“The size of the skills gap identified in our survey will escalate as economic conditions improve, and that means an increasing number of Australian organisations face the risk of underperforming,” the chief executive of AIM in Victoria and Tasmania, Susan Heron, said on Tuesday.

Heron said 40 per cent of organisations were experiencing a negative impact upon profits and performance as a result of the skills shortage.

Sixty-nine per cent of respondents said the skills gap was putting more stress on employees, and 52 per cent said it was hurting staff morale.

Managers were under increasing pressure to perform and to work long hours to try to bridge the skills gap.

“This situation is unsustainable because you can’t expect employees to keep over-performing indefinitely,” Heron said.

Consequently, organisations would need to boost their investment in training and development and increase efforts to attract and retain talent.

Heron said organisations were taking corrective action, predominantly through investment in training and development.

Forty-seven per cent of respondents identifying a skills gap said that skills in the current workforce did not match changes in company strategy, goals, markets or business models.

Forty-two per cent said there were too few qualified candidates when hiring for jobs, and 24 per cent said there was no long-term commitment to employee learning and development.

A higher percentage of large organisations of more than 200 employees reported a skills gap compared to small organisations of fewer than 50 employees.

Survey respondents said the biggest deficiency of skills was in “leadership”, followed by professional or industry-specific skills, process and project management skills, managerial skills, and communication/interpersonal skills.

The leadership skills gap was ranked highest in the public sector and lowest in private limited companies.

Departments identified with the biggest skills deficiency were sales and customer relations; followed by manufacturing and production; marketing and corporate communications, information technology and engineering.

Fifty-one per cent of survey respondents said middle managers had the most significant skills gap, followed by customer service employees and senior managers.

Survey respondents said the skills gap was smallest amongst chief executives, board directors and business owners.

AIM said there was a gap between the views of chief executives and directors, and lower-level management when assessing why there was a skills gap in their organisations.

Five per cent of business owners and 12 per cent of chief executives and directors believed that a reduced training budget was responsible for the skills gap, compared to 21 per cent of middle managers and 23 per cent of team leaders/supervisors.

The Australian Institute of Management is an independent, not-for-profit organisation with more than 25,000 professional members.

Source: AAP NewsWire

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