New research shows that a structural skills shortage will continue to sustain the demand for candidates despite the economic downturn and accelerating job losses in some sectors.

The study measured demand for skilled labour on a sliding scale where a score of 100 indicates a balance between labour supply and demand. A score of less than 95 points to a skills surplus, while anything over 105 signals an extreme skills shortage. The index is calculated by dividing total employment plus skilled vacancies by total employment plus unemployment.

The results show that, despite the recent economic slowdown, the skills shortage, which appeared in a range of professional and trade sectors in 2005, remains significant.

The overall index for the September quarter reached a record high of 103.5. This included scores of 102.1 for professionals from a variety of industries (such as science, building and engineering, accounting, marketing, ICT, business and information, health and social sectors); 105.9 for associate professionals (medical and science, building, chefs) and 105 for tradespeople from the metal, automotive, electrical, construction, food, printing, carpentry and hairdressing industries. 



Chefs were in the greatest demand; followed by metal-related trades, hairdressers, automotive trades, health professionals, food-related trades, computing professionals, building and engineering professionals, construction trades and printing trades.

“It appears the global economic crisis will probably relieve some of the overall labour market demand,” said Bruce Mills, Joint CEO of 3W Consulting Contracting & Recruitment Pty Ltd, “but changes in the economy will not affect all sectors equally and [skills] shortages are likely to persist in certain occupations.”

In recent years, the building and engineering industries have been among the worst affected by the skills shortage, but the study predicts some relief from the ‘talent drought’ in these areas as unemployment rises. In an attempt to reduce costs, some companies within the sector appear to be shedding staff that they believe are under-performing.

The finance sector has suffered large-scale job losses and recruitment freezes this quarter, but according to the study, the demand for highly skilled accountants and auditors remains high.

The marketing sector has also been affected as companies tighten their belts and cut down on their marketing budgets. 50% of the industry was affected by hiring freezes and most people who left marketing roles were not replaced. There is still a demand however for high-quality marketing professionals — provided they have proven track records and “watertight” resumes.

“Although there has been a bit of a slowdown in permanent appointments,” Mills said, “the ICT sector has experienced an increase in the number of contract appointments.”

“We expect to see the market picking up again by mid-2009, as both government and the business sector place a great deal of emphasis on ICT.”

Examples of this include the ACT government, which, as a result of the Gershon report, is likely to favour permanent ICT staff members rather than contractors. Both the private and government sectors in Victoria seem set to follow suit; while in NSW and WA there is still a strong leaning toward contract recruitment.