How Australia made its own skills shortage

Businesses around the country have reported challenges in filling job vacancies as a major impediment to their operations.

Prime Minister Anthony Albanese committed to host a Jobs and Skills Summit in Canberra to work through the issues and scope out potential measures - and 36 outcomes were announced for immediate action.

But little consideration is given to how we've got to where we are now, nor how to avoid similar situations in future.

The Bankwest Curtin Economics Centre's latest Bridging the Gap report takes a detailed look at the nature of skills and labour shortages in Australia.

The report speaks to many of the workforce issues raised during the summit and reflects on the origins of skills shortages, as well as strategies to minimise their impacts and future occurrence.

It might sound provocative to say that full employment and high real wages will inevitably create skills or labour shortages to some degree.

But it is a question of degree.

We argue that for skills shortage to warrant a policy response requires an identified set of barriers to the efficient allocation of labour and skills.

And we've arrived at the point where the challenge of filling job vacancies is debilitating for many businesses.

The question is, how can the immediate problem be resolved? And what should be done so that our labour market can adjust more efficiently to changing demands for skills?

The run-up to the summit was taken over with debate on how much Australia's migration cap should be lifted to mitigate skills shortages over the short term.

And one of the major announcements from the summit was an increase in our migrant intake from 160,000 to 195,000 a year.

Visa delays have been a huge issue for people seeking entry to Australia, with up to 900,000 visas still waiting to be processed.

The global market for talent is fiercely competitive, and people with high-end skills are more mobile now than ever. If Australia doesn't go the extra mile to attract talent, then the talent will decide to travel elsewhere.

And the government putting $36 million in additional funding for visa processing centres will come as welcome relief to prospective migrants, and to those businesses looking to employ them.

Migration will always be part of the Australian story, not just for the productivity that migrants bring to this country, but because the diversity of texture that multiculturalism brings to the country has made the country itself richer.

However, solutions to address skills shortages extend far beyond discussions of migration caps and visa processing.

There are currently 840,000 people in Australia designated by the Australian Bureau of Statistics as underemployed, who want to work more hours if given the opportunity.

There is a strong gender dimension to underutilisation, much of which is driven by imbalances in care responsibilities and role expectations for women compared to men.

Childcare is a major employment barrier for many women, and it's not just about affordability.

The lack of flexible care packages that match hours of childcare with work and school hours creates barriers for many women already working.

And employers should reflect on whether they are making the best use of the existing pool of talent within their own organisations, and those applying for work.

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In one of the most compelling sessions at the summit, four young Australians shared their lived experiences of discrimination.

These stories were truly confronting.

We heard from someone who cared for a child with special needs who was told by prospective employers that they wouldn't be able to consider flexible work arrangements.

We heard from someone whose vision deteriorated during their employment tenure who was told by their bosses that they didn't hire a blind person, and the work environment was no longer deemed suitable.

There were stories of direct discrimination from a person from an ethnically diverse background who struggled to convince employers to fully utilise their talents.

I received emails before and during the summit from people in their 50s who spoke about their experiences of job search.

Several have been looking for work for years and brought tertiary qualifications plus a host of experience to the table.

But their job applications weren't taken up.

Dylan Alcott, Australian of the Year and a national legend, raised that only 54 per cent of people with a disability are employed, with unemployment three times the national rate.

This matches evidence from the Bridging the Gap report showing that people with disabilities are under-represented and excluded from work.

An entirely achievable target for equity of inclusion could see a further 100,000 people with a disability employed across the country.

In Mr Alcott's own words, "employ their ability".