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What is a Skill Shortage?
Nature and Impact of Skill Shortages
Skills Shortages - Data Sources
Skill Shortages - Australian Research
Skill Shortages - Overseas Research
1. Skill shortages exist when employers are unable to fill or have considerable difficulty in filling vacancies for an occupation, or specialised skill needs in the occupation, at current levels of remuneration and conditions of employment, and reasonably accessible location.
Shortages are typically for specialised and experienced workers, and can coexist with relatively high overall unemployment in the occupation. An occupation may be assessed as in shortage even though not all specialisations are in shortage. Occupations may be in shortage in some regions and not in others.
The paper What is a skill shortage? looks in detail at the meaning of supply of and demand for skills in the Australian labour market, focusing in particular on the way in which skill shortages are identified and addressed.
2. Recruitment difficulties occur when employers have some difficulty filling vacancies for an occupation. There may be an adequate supply of skilled workers, but employers are still unable to attract and recruit sufficient suitable employees.
The recruitment difficulties may be due to characteristics of the industry, occupation or employer, such as: relatively low remuneration, poor working condition or image of the industry, unsatisfactory working hours, location hard to commute to, ineffective recruitment advertising and processes or organisation-specific and highly-specialised skill needs.
3. Skill gaps are where existing employees lack the required qualifications, experience and/or specialised skills to meet the firm’s skill needs for an occupation. Skill gaps may apply to new employees, where employers are unable to find suitable applicants for an occupation and recruit workers who need further training and/or experience to meet the firm’s skill needs for the occupation.
The paper 'Skill shortages: concepts, definitions and indicators', prepared in the Occupational and Skills Analysis Section of DEEWR, provides an overview of key aspects of identifying skill shortages.
There is considerable diversity in the characteristics and supply and demand challenges facing industries. The research underpinning the National Skill Shortages Strategy working groups is extensive and constitutes a rich body of evidence to examine skill shortage issues facing industries, such as:
- How extensive are the skill shortages? Have the shortages persisted?
- Are the shortages for ‘occupations’ or particular skills?
- Has growth, or fluctuations, in demand contributed to skill shortages?
- What is the longer-term trend in supply - training output?
- Is retention of skills within industries a cause of skill shortages?
- What causes skill shortages? What influences impact on particular industries?
- What other issues have emerged from the skill shortage research?
- What are the main areas for action to address skill shortages?
The Nature and Causes of Skill Shortages paper prepared by the former Department of Education, Science and Training (DEST) and the National Centre for Vocational Education Research (NCVER) summarises these issues for selected industries.
The following links provide additional information on the concepts of skills shortages.
Skills information is used widely to assist in the delivery of employment services; to guide education and training planning; to help industry organisations, individual employers and government agencies to develop strategies for addressing skill shortages; and to advise on skilled migration.
The Higher Education Group in the Department of Education, Employment and Workplace Relations (DEEWR), maintains detailed data on higher education courses for individual higher education institutions, made available to users on request (once released).
The Good Universities Guides link individual higher education courses to occupations and this information is available on myfuture, as well as at the Hobsons Guides website.
Graduate Careers Australia (GCA) runs a number of surveys that inform on how well graduates are doing in the labour market, including: the Graduate Destination Survey (GDS), Graduate Starting Salaries (GSS), Postgraduate Destination Survey (Postgrad) and the Course Experience Survey (CEQ).
The National Centre for Vocational Education Research (NCVER) is the main source of data on nationally-recognised VET courses and research. Data are available in publications, including the quarterly update Australian vocational education and training statistics: Apprentices and trainees. More detailed statistics are available on request. NCVER has an extensive range of publications, many of which are relevant to skill shortages and emerging skills issues (for example, employability skills).
NCVER is also the manager of VOCED, the UNESCO/NCVER research database for technical and vocational education and training, an international database of research abstracts (in English).
The training.com.au website is intended as a gateway to training information, especially VET. This website provides access to information on training-related, for example: the VET system, the Australian Qualifications Framework (AQF), Registered Training Organisations (RTOs) and Australian Apprenticeships.
Information on skill shortages is available on the websites of industry organisations, such as the Australian Industry Group (Ai Group), including general skills reports (for example, World Class Skills for World Class Industries) and for specific industries (for example, Engineering Skill Shortages). More data may be available from industry organisations on the key issue of emerging skill needs in industries.
The Australia Chamber of Commerce and Industry (ACCI) also has reports, submissions and survey results that are highly relevant to skill shortage issues.
Several reports on addressing skill shortages in specific industries are available on the National Skills Shortages Strategy website. Other relevant publications are available on the Department of Education, Employment and Workplace Relations (DEEWR) home page.
Skills Australia is an independent statutory body providing advice to the Minister for Education, Employment and Workplace Relations on Australia's current, emerging and future workforce skills needs and workforce development needs.
The Department of Immigration and Citizenship (DIAC) has data on migration trends for occupations and special reports on issues such as the labour market experience of new arrivals. For more information click on this link to view the DIAC Publications, Research and Statistics page.
The ABS has a comprehensive suite of labour market information, and much of this is relevant to skills issues. While Job Outlook provides detailed occupational information from the Labour Force Survey, there are more ‘insights’ available on skills issues from the monthly and supplementary surveys. More information is provided in a paper prepared by the ABS: Skills Information in ABS Surveys
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