82% Aussie business leaders concerned about losing talent

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Increasing competition for talent is the top reason for the rising skill shortages followed by increased demand for specialist skills, existing skill sets not keeping pace with digital transformation, and an inability for many to recruit overseas talent or having dire collaboration with traditional offshore providers.

Rising cost of hiring skilled developers
Australia’s dwindling population of ICT professionals has prompted the cost of hiring skilled developers to rise by around 30 per cent in the last 12 months. Software engineers are among the highest earning professionals in Australia. Employers are being forced to throw money at their employees or offer huge pay packets to entice newcomers as the skills shortage bites hard. Having more technology jobs than people to fill them has been an ongoing challenge for a long time and is now a huge problem.

The need for talent versus IT graduates
Australia’s Computer Society, ACS, provides an annual stock take the digital economy and workforce of the country in collaboration with Deloitte. Australia’s technology workforce numbers jumped from 33,400 to 805,525 workers despite COVID, a 4.3% increase from 2020, led by sectors experiencing rapid digitisation including finance, utilities, construction, and retail.

Over the next five years, the technology workforce is forecast to exceed 1.1m Australians, more than 4 times faster than the broader labour force numbers, according to the new 2021 edition of the ACS Australia’s Digital Pulse report, which tracks the key trends in the nation’s technology workforce and its potential growth.

Despite the boom, current trends indicate an impending gap between the need for an extra 60,000 IT staff every year to meet the requirements of industry and government. And hold your horses, Australia produces just 7,000 domestic IT degree graduates.

Another factor holding back Australia’s ICT potential is the low levels of female participation. The report also shows the importance of retraining Australian workers to fill new positions and the key role immigration has in filling short term skills gaps. With the increasing adoption of technologies such as Artificial Intelligence, autonomous vehicles and data analytics, the need for advanced skills is going to increase. A prime case in point is the manufacturing industry where the push to reinvigorate Australia’s advanced manufacturing capacity will be hampered if that sector’s ICT employment continues to fall. Similarly, the slowing of ICT employment growth in the Public Administration and Safety sector is an area for concern as the push to increase the public sector’s digital capacity accelerates.

One other noteworthy subsequent impact of Australian software development professionals leaving their professional roles vacant is that many non-tech companies and development agencies alike will opt to outsource their software development needs to offshore developers over domestic programmers instead.

Whilst many believe that outsourcing can significantly cut costs of software development, there is no denying that outsourcing can come with its own disadvantages, including the impacts of miscommunication alongside the general challenges that accompany managing a remote workforce.

Although initial costs of labour are lower when enlisting the services of software developers based in Asia, outsourcing large-scale projects to remote professionals has been known to delay homegrown digital development projects, and can also result in finished products feeling quite off-centre from original application or software design plans.

So, business owners can idly stand by or acknowledge objections and move focus on how the game is played. There are definitely other options to deal with talent shortage, like alternatives to insourcing.

Read the full report here.
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