‘Not proficient’: Employers call for more overseas workers as Australian ‘skills gaps’ hurt productivity

Employers have delivered a brutal assessment of Aussie workers, blasting them as “not proficient” and unwilling to learn new skills.

Australian workers are increasingly “not proficient in their roles” and are hurting productivity, with more than half of public sector employers relying on foreigners to fill “skills gaps”, new research has revealed.

Universities have been accused of contributing to the problem by failing to train graduates in basic “employability skills” such as working in an office environment or operating standard software.

More than four in 10 (41 per cent) Australian employers now hire overseas nationals, with this practice particularly prevalent in the public sector on 60 per cent versus 37 per cent in the private sector, according to the report by the Australian HR Institute (AHRI) published on Monday.

The survey of 607 senior business decision makers, which comes amid growing debate over Australia’s record immigration intake, identified lack of experience and skills among local candidates as the key reason for hiring foreigners.

Office workers in the Sydney CBD. Picture: Damian Shaw/NCA NewsWire

“It’s very clear Australian employers are struggling with skills gaps at the moment,” said AHRI chief executive Sarah McCann-Bartlett.

“Almost 20 per cent have said that Australian workers are perceived by them as not proficient in their roles and that skills gaps are impacting productivity. Almost 60 per cent say productivity in their organisation is being impacted. As a result they are pulling every lever they possibly can to fill those gaps.”

Ms McCann-Bartlett said the report showed that “migration is one of those important levers to address skills gaps, and what employers told us is that they want the migration system to be easy to navigate and fast … a number said it was confusing and slow”.

She said the skills gaps were “due to a lot of different reasons, not just Australian workers being not proficient, but the underlying reasons are that businesses and business strategies are changing”.

The lack of proficiency was most pronounced in the public sector where 24 per cent of employees were not fully proficient, compared to 18 per cent in the private sector, according to the survey.

AHRI chief executive Sarah McCann-Bartlett. Picture: Supplied

The top causes of skills gaps cited by employers were evolving business or strategic needs, constantly evolving skills needs, staff not being fully trained or experienced in the role, and staff reluctance to develop new skills.

“Recruitment difficulties, high employee turnover, and poor leadership and management capability further exacerbate the issue,” the report said.

One director of workforce strategy and planning from a public sector organisation told AHRI that there was a “critical gap in basic employability skills among new graduates, which universities often overlook in favour of developing problem-solving and critical thinking skills”.

The employer explained that they expect graduates to have a “set of employability skills around teamwork, creativity, and analytical skills … being able to operate in an office environment, even being able to use the standard office package … but the universities say that’s not their role to develop these skills”, the report said.

But the research also found in addition to hiring from overseas, many organisations were taking measures to upskill their workforce through mentoring schemes, work placements for adults, internships, graduate programs and apprenticeships.

More than one third of organisations said they planned to increase their training investment in the year ahead, while 6 per cent said they planned to cut their training budget.

“They are also looking at their internal talent pipeline which is incredibly important,” Ms McCann-Bartlett said.

Employers are relying on foreign workers. Picture: Nikki Short/NCA NewsWire

“They’re also starting to think about skills rather than jobs, which means rather than relying on traditional qualifications or the same job titles, they’re saying, ‘What skills do we need in our organisation? How do we build those skills up?’ And finding people who may have acquired those skills in different types of jobs. That widens the pool of available candidates.”

While the research did not go into detail on “exactly what kind of specific jobs or skills” were in short supply, “we found the professional occupations had the highest density of skills gaps”, in addition to management, administrative work and sales, she added.

The survey also did not specify which countries employers were turning to for foreign workers.

Ms McCann-Bartlett despite the perception employers were primarily using migrant labour to fill temporary, low-skilled roles, the research “indicates that employers are primarily using migrant labour to fill roles requiring skills, qualifications and experience” and many Australian organisations “rely on a supply of skilled overseas workers for business growth and public service delivery”.

Australia has brought in nearly one million net overseas migrants over the past two years, with the unprecedented post-Covid surge leading to growing calls to “stabilise” the nation’s population growth to ease pressure on housing and infrastructure.

The federal government has vowed to cut net overseas migration from a record 528,000 in 2022-23 to 395,000 in 2023-24 and 260,000 this financial year.

Data released by the Department of Home Affairs on Thursday showed 2.4 million people remained in the country on a temporary visa in May, a near-record high.

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