Global skills shortages – the competition for skilled workers

While Australia is seen as an attractive destination for skilled migrants, it faces stiff competition from other nations known for welcoming immigrants – and others that recognise they need talent from abroad.

Canada is seeking around 500,000 extra skilled workers over the next two years and New Zealand is rebalancing its migration system to attract skilled talent. In the new world of digital nomads, several European countries are offering residency permits to skilled workers working in an OECD country or seeking to study remotely, and also to entrepreneurs interested in setting up a business.

The UK is working on changes to its migration program, as employers in rural areas and industries such as hospitality struggle to find the workers they need. While Britain’s labour problems have been blamed on Brexit, a report from ReWAGE and the Migration Observatory at the University of Oxford has found that the end of free movement between the UK and European Union exacerbated issues that UK employers were already facing, such as people quitting the workforce for early retirement. The researchers also noted that labour shortages in some sectors are international.

These findings will not surprise policymakers elsewhere. The effects of ageing populations and mismatches between educational enrolments and skills in demand are issues occupying the thoughts of governments in developed countries. Many say the lack of health care staff is chronic, and the shortage of ICT workers is considered a global issue.

Priority occupations for migration

Australia’s Priority Migration Skills Occupation List (PMSOL) identifies 44 occupations that get priority in the migration queue because they are in such critical shortage. The list covers a wide range of industries such as health, finance, engineering and, of course, ICT. VETASSESS assesses several of these occupations, including those of chef, construction project manager, maintenance planner, industrial pharmacist, internal auditor and other spatial scientist.

Every week there are reports that skills shortages are having an economic impact, delaying building projects and forcing hospitality businesses to close on some days.

While it is Government policy to invest more in skills and training for jobs that are in demand now, and will be into the future, that will take time. Skilled migration can help fill current gaps and support employers to recover from the COVID pandemic. The Minister for Employment and Workplace Relations Tony Burke emphasises that there is not a binary choice, saying that Australia needs investment in training and skilled migration.

How to attract skilled migrants

In the wake of COVID border closures and difficulties faced by people finding themselves unable to return to home countries and stranded with no income, governments are competing for talent not only on the opportunity to work but also the level of support and ease of gaining residency.

Skilled workers who are able and willing to move have many choices and they and their families do research their options in different countries. What kind of life will they be able to build in a new country? Will their skills be recognised, and their experience valued?

Governments are already recognising they need to attract skilled migrants rather than wait for them to come, with increased quotas and fast-track assessments for people with specialist skills.

Given we’re in such a globally competitive environment, I’m hopeful that the Australian Government will develop a plan to promote the benefits of migration to Australia.

Filling skills gaps

The Australian system of assessing both qualifications and experience against nationally defined occupational standards is well-regarded globally for its integrity and ability to match workers to employment.

Many countries do not have this level of assurance, which can lead to migrants finding their education level is not accepted, or that their job experience is not regarded as meeting the needs of a role.

Even then it can be hard to break into a new country for someone who does not have an established network of family, friends and industry colleagues.

The Australian Government has launched programs to assist migrants who are already in the country but working below their skill level. In some priority occupations they can gain a free employability assessment and a referral to subsidised training that may help them find more appropriate work.

The aim is to improve employment outcomes for skilled migrants and this program is one of three pilots designed to maximise the contribution of the onshore migrant workforce to help fill labour shortages in priority occupations.

At a time of skills shortages, it makes sense to assist people who are trained and experienced in an occupation that is in demand, but who may lack, for instance, digital or communication skills to break into their industry.

Attracting international students

Many international students will choose to stay upon graduation and gain work experience, even if they do eventually intend to return home. They are a valuable source of talent. What they lack in on-the-job experience they can make up for with willingness to learn and in bringing the latest knowledge to the workplace. If they apply for residence and employment upon graduating, they approach employers with an understanding of the country and workplace culture.

Many have had a rocky journey during the COVID years. Some could not get home while others were encouraged to leave and found it difficult to return. Australia’s international student enrolments dropped in 2021 and 2022, while student migration to the UK rebounded in 2021, to an all-time high of 244,000 in the third quarter, according to the Migration Observatory.

• VET refers to vocational education and training. ELICOS is mostly English language instruction offered to overseas students.

As with skilled migrants, there is strong competition for international students.

According to the latest OECD figures from 2020, the United States is the largest destination country for international students, following by Great Britain and Australia. In recent years, Canada has grown strongly as a popular destination.

International students are more likely to study science, technology, engineering and mathematics (STEM) and ICT subjects than local students, and in developed countries such as Australia occupations requiring these specialisations are in strong demand.

In choosing where to study, many students also seek a destination where they will be able to work during and after their studies. Most OECD countries allow international students restricted rights to work while studying, and almost all of them in the past 10 years have changed policies to encourage the students to stay after graduating.

Migration – the way forward

There were skills shortages prior to COVID, but the border closures of those years have shown nations how much they rely on migrants to keep the wheels of their economies turning.

Governments globally are now scrambling to attract skilled migrants and recognising that many of the people they want to lure can choose where they want to live and work. As a result, we can expect to see more innovation in policies to welcome skilled professional and trades people.

Restrictive migration policies increase risks to migrants and lower the potential benefits of migration from new skills, younger workers, and the hard-to-quantify benefits from mingling the ideas and energy when people with different backgrounds and experience work together.

Sources:

This blog is based an address by VETASSES Executive Director Rob Thomason at the 25th annual Metropolis conference in Berlin in 2022.

Migration Observatory and ReWAGE, ‘How is the end of free movement affecting the low-wage labour force in the UK?’ August 2022.

OECD, International Migration Outlook, October 2022.