Are You Ready For The Return of the Skills Shortage?

The business advisory firm KPMG has recently released its latest annual Private Companies Survey which includes some startling results for organisations throughout Australia.

In this HRwisdom posting we share the results with you and remind you of two excellent free HRwisdom resources which you can use straight away to plan your strategy to deal with the new findings.

KPMG Annual Private Companies Survey

KPMG’s report showed that mid-sized Australian businesses felt that they had not overstretched, had adequate access to credit but believed their greatest risk was a fall in consumer confidence in the short term and a skills shortage in the future.

Don Abell, Partner in KPMG’s Middle Market Advisory practice said that the results challenged a common perception that the credit squeeze is strangling Australian business.

“We may well be in the biggest downturn since the great depression but the responses show otherwise, for the moment anyway. Private companies are not experiencing a credit led recession, instead it is consumer sentiment steering their fortunes at the moment.

“Overall there appears to be a slowdown in anything considered unnecessary or not core business. However private companies seem to be prepared to act, with 90 percent of respondents claiming to be very well or moderately well prepared to take advantage of any opportunities during the downturn,” he said.

One-Third Still Struggling To Find Appropriately Skilled Labour

“This year’s results confirm a trend in the importance that private companies place on attracting suitably qualified employees. Private companies are taking concerted action to avoid headcount reduction, using a range of mechanisms to retain good staff. Interesting to note that despite the downturn, a third of all respondents are still struggling to find appropriately skilled labour. This shows that even in the worst of times, the need for skilled people remains,” he said.

For the third year in a row, a skills shortage was reported across all industries. It remained high in mining, manufacturing and utility sectors, showing the traditional trade skills are still in short supply.

The survey showed common alternatives to redundancies were requesting employees take long service leave (27 percent) and annual leave (50 percent), along with reduced working hours (20 percent). Nearly half of all respondents (43 percent) had put a freeze on salary increases.

While the results show private companies are taking appropriate measures to minimise unnecessary expenditure and reduce staff costs, they remain remarkably positive. At the time this survey was undertaken, twenty-six percent of businesses believed we have already reached the bottom of the downturn albeit with a tough twelve months ahead. Nearly half (46 percent) rated the medium term prospects good or very good. A further forty-three percent felt prospects in this next three year period would be average, while eighty percent said the long term outlook (5 years and beyond) was good or very good.

“This time last year nearly everyone believed it was all doom and gloom ahead. The results suggest that private business is better equipped then we thought to handle any choppy seas ahead and they’ll be maintaining a tight ship to do so,” said Mr Abell.

Advice From HRwisdom

Our first recommendation to you is to visit (or re-visit) the excellent free HRwisdom online video presentation conducted by a special guest presenter on whether the economic downturn has meant an end to the skills shortage or are there other factors at play? The presenter, Greg Kinaird (Manager of the Australasian Management Centre) gives you excellent information and ideas on how to plan for the next stage of the economic cycle. http://www.hrwisdom.com.au/page/view/311

Our second recommendation is that you go to the HRwisdom home page and download the free employee report on employee attraction & retention. The report was specially produced with a world leader in employee management, Les McKeown, and is full of high quality, practical ideas to use.

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HRwisdom Support