Dialogue: Good news masks growing skill shortage

A shrinking pool of trained workers could mean economic disaster, says KEVIN CHAPPELL*

While the Government may take pleasure from unemployment numbers falling to around 5 per cent, the same numbers are starting to put a chill into the hearts of businesspeople.

That's because, under the hoop-la surrounding low unemployment statistics, a disaster is waiting to happen.

Low unemployment, almost by definition, means a corresponding reduction in the availability of skills.

This latest pronouncement gives substance to previously anecdotal evidence that business has an acute skill shortage in some key areas.

If everyone has a job, where do you find the new or additional skills to maintain - let alone expand - your business?

Statistics can sing to many tunes.

Is it true, for example, that around 5 per cent of the workforce is unemployable - either by desire or physical or geographic impediment? Would that then mean we have near-zero unemployment, given that the latest official numbers are uncannily close to these unofficial ones?

Some point to growth in the number of newspaper job advertisements as an illustration of all being well.

I concede there has been growth, but it is fuelled by companies having to advertise positions several times to attract the type and level of talent they need. It is common to run adverts three or four times and still not get the calibre that is desired.

Further, newspapers are only one way to advertise for jobs. Many jobs change hands without advertising. Internet job sites are growing, and trade magazine and radio advertising are becoming increasingly popular.

The evidence suggests that any movement involves the same people changing one chair for another.

Counting job ads is meaningless, and a smoke-screen that further clouds the reality that there is still no real growth in the availability or pool of talent.

Ironically, companies are having difficulty finding the skills they need to meet existing requirements, let alone look at expansion. Some now have no choice but to under-skill in some positions just just to get a body on board. That, too, holds hidden danger. Compromise can cause serious disadvantage over the middle or longer term.

Others, prepared to wait longer and search further, face the prospect of having to defer plans.

And, although in the past business has found respite through the professional contracting market, this talent pool is under pressure in some disciplines.

Local and international experience has shown this to be an indicator of an economy in danger of stalling. We need look no further than the US, where severe skill shortages have contributed to the stalling now being touted.

Contributors to job supply, creation, demand and market environment need to look urgently at developing a balance between actual market skill requirements and their level and availability.

It is not something the Government, educational institutions or the private sector can do alone.

Opening the gate to more skilled immigration is a positive first step. All parties talking to each other about real market needs, and changes, has to be the next.

Supply and demand is a fundamental of economics. If there is no balance we will all lose.

* Kevin Chappell is managing director of the Executive Taskforce group of companies.