Up turn in jobs market points to skills shortage

Recruitment firm warns IT industry on brink on skills shortage

The Australian ICT industry is on the brink of slipping back into a chronic skills shortage, just as the jobs market begins its road to recovery, according to a recruitment specialist.

Candle ICT CEO, David Stewart, said as more projects get underway and the demand for positions rises, the skills shortage will get progressively worse and potentially back to a pre-economic downturn situation.

“In 2010 we can expect to see some pretty chronic shortages develop in the ICT area and that’s going to constrain our ability as a nation to be able to grow because it’s going to be hard to deliver on some of these infrastructure and telecommunications projects due to a lack of people,” Stewart said.

The Clarius Skills Index for the December quarter recorded a slight labour surplus of 500 workers across the ICT industry, with a reading of 99.8. (An Index score of 100 indicates equal division between job supply and demand).

Stewart said while the bargaining power is back in the hands of job seekers, outsourcing could become an attractive option as companies struggle to find labour in Australia.

“The power is starting to shift back to the job seekers already, the bargaining power is switching back and the candidates are starting to get more choosey and demanding,” he said. “It is also certainly clear that the employees within ICT are going to have a lot more bargaining power from now onwards.”

The news follows on from the latest results for the Olivier Job Index, which reported growth in IT job ads, up 0.49 per cent in December.

Recruitment firm Hays, however, urged employees and job seekers to think twice before demanding higher salaries in 2010, despite the recovery in the IT job market.

Developed by KPMG Econtech for Clarius, the skills index analyses labour demand against supply, using ABS and Department of Employment, Education and Workplace Relations labour force data.

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More about: ABS, Candle, Department of Employment, KPMG, Olivier
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Portis Annuna


When you use the phrase "labor shortage" or "skills shortage" you're speaking in a sentence fragment. What you actually mean to say is: "There is a labor shortage at the salary level I'm willing to pay." That statement is the correct phrase; the complete sentence and the intellectually honest statement.

Some people speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussion.

If you start raising wages and improving working conditions, and continue doing so, you'll solve your shortage and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon.

And if you think there's going to be a shortage caused by employees retiring out of the workforce: Guess again: With the majority of retirement accounts down about 50% or more, most people entering retirement age are working well into their sunset years. So, you won’t be getting a worker shortage anytime soon due to retirees exiting the workforce.

Some specialized jobs require training and/or certification, again, the solution is higher wages and improved benefits. People will self-fund their re-education so that they can enter the industry in a work-ready state. The attractive wages, working conditions and career prospects of technology during the 1980’s and 1990’s was a prime example of people’s willingness to self-fund their own career re-education.

There is never enough of any good or service to satisfy all wants or desires. A buyer, or employer, must give up something to get something. They must pay the market price and forego whatever else he could have for the same price. The forces of supply and demand determine these prices -- and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. The good is available at the market price. All goods and services are scarce, but scarcity and shortages are by no means synonymous. Scarcity is a regrettable and unavoidable fact.

Shortages are purely a function of price. The only way in which a shortage has existed, or ever will exist, is in cases where the "going price" has been held below the market-clearing price.

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Tags: Clarius Skills Index, IT jobs market, Hays, ICT careers, olivier job index
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