Intelligence

Ready, Steady, Upskill?

Key Points

• During COVID-19, jobs with Programming skills, Mathematics, Technology Design and Analysing Data or Information were amongst the fastest growing.
• Employees themselves identify web app and software development, data science and analysis and coding/programming as some of the most in demand skills in the economy.
• Overall, 87% of jobs in Australia require digital literacy skills.
• According the RMIT, Australia will need 156,000 more digital technology workers by 2025, representing one in four jobs created during that period.
• Even more recently – according to a recent AFR article – The Tech Council of Australia has forecast Australia will need 1 million people in tech jobs by 2025, meaning around 260,000 more people will need to enter the Australian tech workforce in that time.
• Up-skilling and cross-skilling won’t solve the skills shortage in the short-term alone. You need better talent with the right skills now.
• When nearly every company globally is competing for skilled technology professionals technology skill gaps are a massive impact on a business’s ability to undertake its operations.
• Geographic problems such as the closure of Australia’s borders make the issue even more acute.

The RMIT View

Well, what a great whitepaper. Well done to RMIT for producing such a comprehensive look at the workforce and its needs moving into the next 5 years.

So, what did we learn? Well one of the key points raised was this:

Individuals have also reported big changes over the COVID-19 crisis – 35% of surveyed Australians experienced some change during the crisis (including starting a new job, losing a job, starting studying, gaining a promotion or starting a business.

But is this in line with what Ploy has seen in the IT Industry in terms of the Great Resignation, particularly in changing jobs?

And how has this impacted the market (think talent shortages, greater salary demands, more power in the hands of talent and employers having to provide more than just the usual “wellbeing” perks)?

Well, certainly, COVID has seen one of the biggest market shifts in our times. On a human level, it’s transformed the way employees interact with their businesses – from accelerated adoption of remote technologies to flexible working becoming the norm (unless you’re Mr Musk).

There’s certainly been a large uptake in permanent recruitment, as companies compete in the war for talent and traditional ‘career contractors’ are accepting attractive permanent salary packages.

From a contract perspective, the market has significantly shifted – with a notable decrease in the number of contractors and a stranglehold on new talent arriving form overseas – the resumption of which is crucial to addressing Australia’s skills gaps now.

Customers thriving in this market tend to have a few things in common:

1. they plan and adapt quickly to changing market conditions
2. they genuinely caring for existing employees and listening to their needs, and
3. they accept the market has changed and are pushing forward (not looking backwards)

The Fears of the Greater Population

According to RMIT, one in four surveyed Australians reported that they didn’t have the skills they needed to complete their day-to-day job and one in five thought there is a possibility they will be made redundant.

However, this is across many industries and segments, and these problems existed pre-covid and have become worse post pandemic.

Up-skilling internal staff is often incorporated into strategy but poorly executed. Within the IT sector, we’ve seen an increased in demand for technology skills – but the biggest risk by far is IT talent resignations. In this sense, then yes, more training is a big part of the solution.

RMIT also states that Australia will need 156,000 more digital technology workers by 2025, representing one in four jobs created during that period. Clearly this also affects the IT sector where the impact of the Great Resignation and shortages of good talent have impacted an already-stretched sector.

One of the most important solutions that will have an immediate impact is to allow more foreign talent into the country and allow supporting industries (such as recruitment) easier access to long term visas and eventually permanency.

Another key point RMIT makes is that many Australians do not have the skills that they need for their job today – let alone the skills they will need for the jobs of tomorrow. The biggest skills gap is in data analysis. Of those that need it for their work, 30% of those surveyed report that their data analysis skills are not at the level required, or are outdated, compared to their employer’s requirements.

Critical Shortages in the IT Industry Won’t Change with Up-skilling Alone

Certainly, within the IT sector we’ve seen data as a big topic. We’ve seen a large uptake across data analysis, particularly within the data science field.

This makes sense in the context of the pandemic, as businesses wanted to manipulate and cleanse their data – providing a clearer overview of the business and better understand their available skills.

We also saw a sharp increase in consulting opportunities, across many applications – indeed any technology that supported a hybrid working model where some or all your workforce was working from home. But again, skills shortages become the very large elephant in the room.

According a recent AFR article:

Demand for new technology is booming, thanks to the IT needs of a global pandemic – teamed with a sudden rush of entrepreneurialism and venture capitalists with cash to splash. But while Australian businesses and organisations are primed to innovate on the tech front, a chronic skill shortage is forcing many to put the brakes on.

Furthermore, AFR quotes Sam Kroonenberg, executive strategic advisor at workforce development company Pluralsight, and Tech Council of Australia with more recent data which is even more alarming:

The skills shortage is nothing new, but with other pressures at play, including border closures during COVID-19, and low unemployment figures, the situation has only worsened.

The current pipeline of talent simply cannot keep up with the pace at which jobs are being vacated or created,” says Sam Kroonenberg, executive strategic advisor at workforce development company Pluralsight.

For perspective, the Tech Council of Australia has forecast Australia will need 1 million people in tech jobs by 2025, meaning around 260,000 more people will need to enter the Australian tech workforce in that time.

It’s not rocket science to realise that an acute lack of qualified, skilled professionals ready to support tech projects will mean – as Kroonenberg correctly states – either extreme delays in – or the complete abandonment of key strategic technology initiatives that are required to drive Australis’s new digital economy.

Again, Kroonenberg:

If the skills gap is not adequately addressed, Australian businesses will fall further behind the pace of digital transformation and breaking into the global market will become out of reach —ultimately preventing Australia from becoming a top 10 digital economy by 2030.

And whilst companies such as Reece, (plumbing supplies), Fletcher Building Group (across many divisions), James Hardie and many others you’d not normally equate with a digital transformation are doing what they can to adjust and support a new expectation from customers for a seamless technology experience like Amazon, finding that talent is a key blocker to the desire and planning already approved by boards – and up-skilling takes TIME.

Chief technology officer at Reece – Marcos Kurowski – notes that “in the past 24 months, Reece’s tech team has grown about 40 per cent in its key software engineering areas. But it will need to grow more.”

The same can be said for the others in the building industry already mentioned and a range of other businesses that must find the talent they need to transform and survive – or fall behind (perhaps forever).

AFR also quotes Rosie Cairnes, vice president of Asia Pacific at corporate learning company Skillsoft, who agrees that technology and digital transformation is now at the heart of nearly every company, in every industry – in a way that it wasn’t even five years ago.

Technology is no longer just the province of the IT department – it’s central to the way we find our customers, the products, and services we offer, the way we sell, and the way we delight our customers,” she says. When nearly every company on the planet is competing for these skilled technology professionals, you can see why technology skill gaps are universally felt. Add in geographic constraints – like the closure of Australia’s borders – and that problem becomes even more acute.

So, Can We Address This?

Here at Ploy, we’ve seen a large increase in ‘modern workplace’ style projects (for example, the implementation of MS Teams and the like) and serious efforts put into cross-skilling and up-skilling (in addition to greater efforts to partner with providers who can assess a business’ needs and map out what skills need to be brought in).

This makes sense in the current climate and is also encouraging as we see an uptake in consulting roles – in fact a 27% increase in demand for principal consultants, which shows the market is rapidly adapting to the new world. As it should be.

As the post-pandemic workplace continues to shift and we’re also seeing digital transformation accelerate across every major organisation. It’s crucial to keep pace and it’s worth remembering that training should not all rest with the employer, and that self-learning is an important factor in career development.

One of the other important statistics contained in the RMIT Whitepaper is that over 20% of Australians would prefer $1,000 to spend on training every year, rather than $50 more pay each week (equivalent to $2,600 per year).

This is a great stat and really highlights a common misconception. It is never all about the money – even if that’s what you’re hearing from your candidates.

Employee and contractor motivations are key – and good consultants will extract what’s important to prospective talent if they know what they are doing – and match appropriately to the right companies.
Over the past couple of years, we’ve found that the top four motivators, in order of importance were:

1. work/life balance
2. compensation and benefits
3. flexible work arrangements
4. training and progression

Note that training and progression still sits below salary and work/life balance. Interestingly, we’re also starting to see that a company’s ethical practises and projects as a strongly emerging motivator.

And here’s an interesting titbit:

Surveyed Australians believe that more technical skills such as coding or data analysis are better learned through short courses / microcredentials or vocational courses, relative to softer skills which are better learned on the job.

Within the IT sector this has always been an interesting debate. Within technology, we’re often considering the need for certifications – and whether this has a practical benefit.

In reality certifications are always good to have – and certainly help during any recruitment process – as it shows you taken time and effort investing in your own self learning (as we said before).

A great candidate will be able to understand best practise (academically) and align this with the unique needs of the project and business.

Unfortunately, however, there isn’t enough uptake in training or opportunities on offer – and then there’s the obvious sever skills shortage issue.

A good tip we always provide to our talent pool is to practise self-learning and approach opportunities with a well though-out plan to improve your current skill set. Obviously, this is mutually beneficial and is certainly relevant when negotiating during during a contract renewal or seeking promotion.

Finally, we strong suggest any company seeking the right talent in this market takes something away from this little gem (again from RMIT):

Australian businesses spend $7 billion on recruiting new workers with the right skills, and only $4 billion on training and developing the skills of existing employees…and the average cost of replacing a bad hiring decision within six months are estimated to be more than double the worker’s salary.

This is particularly true with IT, and it’s only going to get worse. A bad hire is a bad hire, whether contract, permanent or Gig. But yes, training and upskilling is critical.

More from AFR and Cairnes:

Our most successful customers generally are all placing greater reliance on upskilling and reskilling programs to address their growing skill gaps. Along with building a culture of learning, businesses need to further develop strategies to attract a diverse labour pool, including more women.

And at Reece? Kurowski says the company is “pulling out all stops to upskill its workforce, including offering a scholarship to an academy that turns tech rookies into software engineers in nine months.”

But with respect, upskilling the existing workforce is a medium to long-term play – even with such initiatives such as Reece’s 9-month upskilling initiative.

It won’t solve the issues of skills shortages in the short-term. For that we are going to need more people coming into the country with the skills we need NOW, better understanding of what businesses need ahead of time (rather than reactive recruitment as has been so prevalent in the past), and a serious effort from business to retain the skills that that have.

The obvious callout here is to ensure that you partner with the right partner who knows the market and who takes the time to understand your business and project needs.

We’ll just leave that with you – no pressure now, you hear?