Despite a skilled and well educated workforce, Australia is facing real talent shortages. Unemployment is at a historic low (hovering around 3%) – and there are roughly two and a half jobs for every unemployed person. Meanwhile, wage growth is slow and the cost of living is high.
There is a particular focus from businesses on DE&I, as they seek to address historic disparities, align corporate values to those of their employees, and find exceptional skills from typically underrepresented groups.
Like in so many countries, the demand from every industry for evolving technical skills is placing pressure on employers to find new tactics in terms of talent acquisition, talent management and employee retention. Could a skills-based approach be the answer?
A focus on skills over roles 🔎
Australian leaders face a paradoxical challenge when it comes to talent management. On one hand, they acknowledge the pressing need to focus on skills rather than traditional job roles. They recognize the potential of a skills-first approach in aligning the needs of employees and employers, creating a workplace that delivers for all.
However, on the other hand, there appears to be a hesitancy to fully embrace this approach – due to misconceptions and a lack of awareness regarding its potential benefits.
According to our recent survey of business leaders, a staggering 90% of respondents in Australia believe that talent approaches must prioritize skills over traditional roles. It is evident that there is a growing awareness of the importance of skills in shaping the future of work.
Despite this recognition, only 52% of Australian leaders (vs. 68% globally) are confident that adopting a skills-first approach can better support business growth within their organizations. And just 25% believe that this approach can effectively address the prevalent skills shortages in their businesses, in contrast to the 43% global average.
This disconnect highlights a gap between acknowledging the power of skills, and embracing it as a solution to business challenges.
Talent mobility and skills shortages 🧭
One explanation for this paradox is the failure to recognize the link between skills-first approaches and employee engagement. 93% of Australian leaders emphasize the importance of talent mobility – getting talent to the point of need – in their strategies. Furthermore, 70% of leaders agree that investing in employees, regardless of their tenure, is essential.
Meanwhile, a substantial 73% still believe that it is easier for employees to find new opportunities outside their current organization than within it – so it’s clear that most approaches to talent mobility are nascent in the surveyed organizations. B
ut only 36% see the potential of skills-first hiring in supporting transformation initiatives by mobilizing the skills of existing employees. Similarly, just 21% believe that optimizing internal mobility to facilitate employee movement between roles can address issues concerning morale and productivity.
This lack of awareness regarding the connection between talent mobility and skills-based approaches leads to a striking contradiction. On the one hand, 70% of leaders express their satisfaction with current talent approaches, aligning them with evolving market conditions and employee expectations. However, an overwhelming 88% have observed a rise in “quiet quitting” within the past year, reflecting employee disengagement and potential talent leakage.
Time for a new approach ⏰
It is clear that while leaders may feel content with their current talent strategies, the reality of talent attrition and disengagement indicates a need for a fundamental shift in approach. This shift involves embracing talent mobility and a skills-first mindset to empower employees, drive engagement, and foster loyalty.
To bridge the gap between recognizing the potential of skills-first approaches and actually reaping their benefits, Australian businesses must take concrete steps. Firstly, leaders should invest in comprehensive talent mapping to gain a richer understanding of the skills present within their workforce. This will enable them to identify untapped potential and facilitate the seamless movement of employees between roles based on their skills and interests.
Secondly, businesses should prioritize reskilling and upskilling initiatives to equip employees with the relevant skills needed for the future of work. This not only addresses skills shortages but also demonstrates a commitment to employee growth and development, increasing engagement and reducing the likelihood of “quiet quitting.”
Lastly, organizations should foster a culture of continuous learning, and incentivize the movement of talent. A massive 73% of Australian business leaders (vs. 42% globally) think “manager resistance/hoarding of talent” is one of the biggest barriers to talent mobility in their organization.
By recognizing and rewarding employees for their skills and knowledge contributions, businesses can reinforce the importance of a skills-first approach and create an environment where internal talent mobility is fully embraced.
By acknowledging the importance of skills-first approaches and talent mobility, businesses can unleash the full potential of their workforce. Embracing this paradigm shift will not only help them address pressing talent challenges, but also position Australian organizations as attractive destinations for the next generation of workers. The time has come for Australian leaders to embrace the power of skills-first and talent mobility to forge a path toward a more agile, engaged, and resilient future of work.