02 August 2010

Skills Shortage: The Sequel (Part 2)

In last week’s InSight lead article, ‘Skills Shortage: The Sequel’, I highlighted the recent flurry of publicity in the mainstream media about the skills shortage. Contrary stories have also made the news. Recruitment industry veteran, Bob Olivier, made headlines in the AFR (Friday 23 July, 2010, page 46) by stating he believed the skills shortage was ‘overplayed’ due to ‘quality candidates being unwilling to move jobs’  and industry news service, ShortList quoted ICT Training Executive Clinton in't Veld as saying;

"Generally speaking, when an environment starts to pick up economically, there is this sort of knee-jerk reaction to think that given the increase in economic activity, we don't have enough skills."

But many companies were only considering the primary, formal skills of their IT staff - in essence their current job title - rather than looking at all of the other skill sets they had picked up along the way, he said.”


So who is right? Is there a skills shortage or not?

As you would expect, the answer is not definitive. It depends upon who you are and what you are measuring.

Let’s look at some typical reasons why a skills shortage might exist.
 
One dimensional sourcing: If you are an employer and all you do is run a job ad in the local paper or online and from that process you aren’t able to hire the ‘ideal candidate’, then you are likely to scream ‘skills shortage’.

No development of employees: If you are an employer who doesn’t invest in building the skills and motivation of their employees because ‘all that happens is that people leave to get a better job, with more money, elsewhere’, then you are likely to believe there is a skills shortage.

Geographically isolated: If you are a Council in a regional or rural area, desperate to find a doctor for your area, then you know there is a skills shortage. This topic was recently given excellent coverage in the SBS documentary Desperately Seeking Doctors.

Low pay: The maximum base pay for classroom teachers in any state of Australia does not exceed $85,000 p.a. The baby boomer wave of teachers are now retiring, creating concerns about the likelihood of the higher paying careers in the technology, finance and resources sectors, luring away potential teachers from undertaking (arguably) the most important paid job in any community.

Unsociable hours: Would you like a job whose core hours are when 99% of your friends and family are asleep? Try a career as a baker.

Dangerous and dysfunctional work environment: Forget all the faux glamour of Masterchef. The reality of life as a chef is a combination of unsocial hours and a work environment combining flames, heat, sharp knives, slippery surfaces and ‘tired and emotional’ colleagues. No wonder the most recent Clarius Skills Index rated chefs as the #1 ranked job where demand exceeded supply in Australia. Let’s hope all those Masterchef-inspired enrolments in hospitality colleges around the country stick with their choice.

A skills shortage is not just a function of the things I have listed above, it’s a function of expectations; the expectations of employers of being able to hire exactly what they are looking for at the price they want to pay.

Training of employees has traditionally been seen as a function of the education system, funded and supplied by the government. Once a ‘trained’ employee started their job, the typical employer took little, if any, responsibility for the further development of that employee. If the employee somehow managed to pick things up as they went along then they were a ‘good’ employee and if they didn’t, they were ‘no good’.

Unfortunately, investing in the ongoing training and development of employees has not been a key feature in the history of Australian organisational life. Too often, training and development has been provided only to those employees who are not meeting performance expectations and therefore needed ‘fixing’.

High performing organisations understand how important a culture of ongoing learning and development is in avoiding the worst of a skills shortage by:
  • Not having to purchase ready-to-go skills at a premium from the open  employment market
  • Lower staff turnover costs
  • Higher innovation
  • Higher morale
  • High productivity
  • Better bottom line results
I wrote in detail about this sort of high performance culture in March 2009 in a feature article What Australia’s Champion Cricket Coach Can Teach Recruiters for recruitment extra.

I think an excellent corporate example of what is possible, is evident at Australian publicly listed travel company, Flight Centre.

Travel agencies were commonly regarded as a dying sector and choosing a career as a travel agent was seen as a dead-end option, primarily due to the internet being able to provide instant self-service for travel bookings as well as  destination information and recommendations.

Flight Centre has been very pro-active about the recruitment and development of their people in an industry that has been traditionally characterised by low margins, low pay and high staff turnover.

Flight Centre own 50% of high-volume recruiter, Employment Office. They invest heavily in training and development, reward their staff with many non-monetary benefits and provide many opportunities for career advancement, both domestically and internationally.

The result? Flight Centre are consistently listed in the Hewitt Associates list of Best Australian Employers To Work For (four of the past five years) and earlier this year, Flight Centre forecast a pre-tax profit for the 09/10 financial year of between $180 million to $200 million, representing a doubling of the 08/09 full year profit result.

Clearly, Flight Centre has taken responsibility for their own supply of required skills and they are reaping huge benefits, culturally and financially, from this approach.

Yes, there is demonstrably a skills shortage in this country in many areas but before too many employer groups start bleating at the Federal Government to issue more Class 457 Visas, they might want to look at their own industry’s record of providing high quality, ongoing training and development programs for all their employees.

2 comments:

  1. Bernard Morrison4/8/10 7:05 PM

    That was an excellent article Ross. Very insightful.
    Better staff development and training (of our clients) could be seen as the enemy of the recruitment industry. Having clients motivated to "purchase ready-to-go skills at a premium from the open employment market" is what drives sales.
    I would be interested in your thoughts as to how a recruiter can use the information you have presented to their own advantage.

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  2. Thanks for your comment, Bernard. The best way I think that recruiters can use this information is to continually educate their client base about

    i) the candidate supply in their niche
    ii) the importance of L&D in attracting, and keeping top performers
    iii) the general strength (or otherwise) of their (the client's) individual employer brand

    I am sure there are other points that recruiters are already using now.

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