Australia has been given a very high score for wage pressure in high-skill industries in a global assessment of the efficiency of skilled labour markets in 31 countries. This suggests that candidates in Australia’s high-skill industries are in greatest demand – and employers are starting to see wage pressure for their expertise as a result.
The Hays Global Skills Index, produced in collaboration with Oxford Economics and released today, scores Australia’s labour market against several indicators, or points of potential pressure.
For each indicator Australia received a score out of 10. A score close to 0 indicates little to no pressure, while a score close to 10 shows severe pressure.
The Index shows that in Australia, pressure on our labour market comes from one key indicator, ‘wage pressure in high-skill industries’. This indicator measures the rate at which wages in high-skill industries outpace those in low-skill industries. Australia received a very high score of 8.0.
“Wages in Australia’s high-skill industries are increasing much quicker than those in low-skill industries relative to the past,” says Nick Deligiannis, Managing Director of Hays in Australia & New Zealand. “This shows that industry specific skill shortages, such as in engineering and technology, have emerged and employers in such high-skill industries are starting to use salary as part of their strategy to compete for the top talent.
“Australia is poised for a significant shift in the recruitment landscape thanks to our booming residential property sector, the expansion of sales teams, the explosion of digital projects and the constant demand for healthcare services. Already permanent vacancy activity has increased.
“But as these findings show, high-skill industries face a shortage of candidates with the right combination of technical skills and cultural fit. So as employers fill staffing gaps, increase sales and undertake projects, they’re increasingly aware of the delicate supply and demand balance. That’s why attracting and securing top talent – especially in high-skill industries – is a priority once again.”
Another indicator measures ‘overall wage pressure’, for which Australia received a score of 6.6. According to Nick, “The score of 6.6 is still in the middle banding, suggesting that the majority of employers – outside high-skill industries – are not yet using salary to compete for talent.”
For the remaining indicators, the Hays Global Skills Index ranked Australia fairly positively. Our education system is well equipped to meet future talent needs (we received 4.2 for ‘education flexibility’), there are advantages to be gained by getting more people into the workforce (3.9 for ‘labour market participation’), our labour market legislation is fairly flexible (4.5 for ‘labour market flexibility’), and candidates usually possess the skills employers are looking for (4.2 for ‘talent mismatch’).
About the Hays Global Skills Index
The Hays Global Skills Index assesses the efficiency of the skilled labour market in 31 countries, or its ability to supply skilled labour. The Hays Global Skills Index provides a score for each country of between 0 and 10 which measures the pressures present in its labour market. The score is calculated through an analysis of seven equally weighted indicators, each covering different dynamics of the labour market. Three indicators explore the supply of talent, namely education flexibility, labour market participation and labour market flexibility. One looks at talent mismatch. The final three are wage pressure indicators, looking at overall wage pressure, wage pressure in high-skill industries and wage pressure in high-skill occupations.
A score of 5.0 indicates a balanced picture for labour markets, a score close to 0 indicates less intense competition for vacancies, and a score close to 10 shows severe difficulty in finding skills.
The Hays Global Skills Index report, titled ‘Labour markets in a world of continuous change’, can be viewed at
www.hays-index.com.
Hays, the world’s leading recruiting experts in qualified, professional and skilled people.