620,000 workers who could solve our skills crisis are hiding in plain sight

A future made in Australia is a bold vision, but no government can deliver it without addressing chronic skills shortages. There aren’t enough workers to do the jobs we need in a third of all occupations.

But these shortages are even worse in the roles needed to decarbonise the economy, including engineers, electricians and other trades such as welders. In the energy sector alone, we require 450,000 workers just to build clean energy infrastructure and meet 2030 climate targets.

A skills shortage? How many engineers are driving Ubers? Credit: Getty Images/iStock

The federal government has made changes to the migration system, including updating some visa arrangements to better target skills shortages and attract the workers Australia really needs. But another effective solution is closer to home. It’s been staring us in the face for too long.

Hundreds of thousands of overseas-trained workers living in Australia right now have the skills we desperately need. We just need to activate them.

Almost half of permanent migrants – more than 620,000 people – are working in jobs beneath their skill level, according to research by Settlement Services International. That’s despite many coming here as skilled migrants to use their qualifications and experience.

This skills mismatch is bad for the economy, when many of them could be filling some of our chronic skill shortages. It is also bad for migrants, who are earning less than they could be and not using their skills. Research by the Committee for Economic Development of Australia (CEDA) shows that, on average, migrants who have been in Australia for two to six years earn more than 10 per cent less than Australian-born workers.

We need to do everything we can to get the right people into the right jobs, but we’re not doing this well. The proportion of recent migrants whose overseas qualifications are recognised in Australia is low compared with other countries.

Engineers, for example, will be vital to the success of the federal government’s economic plan, Future Made in Australia. Renewable energy, critical minerals and advanced manufacturing will all need them. But Engineering Australia says as many as 100,000 engineers in Australia are working in menial jobs despite the skills shortage in this occupation reaching its highest level in more than a decade.

Ahmad Ismail is an electrical engineer from Qatar with more than 20 years’ experience. He came to Australia in 2022 through a skills visa because of this shortage. He completed his engineering degree at the University of Edinburgh and his masters at the University of Wollongong. Even though he has extensive experience on large electrical infrastructure projects overseas, he still can’t get a job here.

In October, Activate Australia’s Skills – an alliance campaign led by Settlement Services International and supported by more than 90 business groups, unions, not-for-profits and community organisations, including CEDA – came together to call for urgent reforms to how we recognise workers’ skills.

The call is not about lowering quality standards. Quite the opposite. It’s about making sure we match skills efficiently. The barriers that block people from finding a job that matches their skills have little to do with their experience. Instead, they are caused by excessive costs, outdated processes and needless bureaucratic hoops.

Most of us have ridden in an Uber driven by an engineer, met a physiotherapist packing groceries, or visited an understaffed hospital or aged care home that desperately needs more nurses, doctors and carers. There are hundreds of thousands of similar stories.

Our separate work in this space yields the same conclusion: activating the skills of workers trained overseas is key to an urgent boost to Australia’s skilled workforce. If we can match the right people to the right jobs, we can increase the availability of important services such as healthcare, childcare and aged care.

This will also help lift sagging productivity. When economists speak about productivity, it’s not front-page news, but it’s important for our living standards and ability to innovate.

You may ask, what does productivity mean other than “more output for less input”? To be more productive, we must effectively match skills to jobs. The more easily people can move into jobs that match their skills, the more productive they are likely to be. They’re happier too.

Some simple changes can help make our skills and qualifications-recognition system work better for everyone: create a national oversight body, streamline processes and make it more affordable and accessible for professionals trained overseas. Such steps would help us build the future made in Australia we want to see.

Melinda Cilento is chief executive at the Committee for Economic Development of Australia and Violet Roumeliotis is CEO of Settlement Services International.