Skills shortage here to stay

A recent study by McCrindle Research shows the skills shortages and the associated workplace expectations of 'Generation Y' are here to stay. Many employers assume that the skills shortages come from 16 straight years of economic growth and the resulting increased demand for staff. However, the chronic staff shortages are produced not just by the economic times but also by the demographic times.

It's not just that demand for staff is high, but that supply - particularly of young people - is low due to the ageing of our population and the relative decline in the number of young people.

Australia's population today:

• Older: In 1976, the median age of an Australian was 28 compared to 37 today and in a decade it will be over 40. The average age of a full-time employee has also been rising and today it sits at 40.

• Slower: The growth of Australia's population is projected to slow down even further during the next 50 years, from 1% per year today to 0.2% per year by 2040. In 1961, women averaged 3.5 children while today this is down to 1.8 children per woman - below the population replacement rate of 2.1.

• Smaller: Australia's working age population is in decline as a proportion of the total population. Currently, for every person of retirement age, there are five people in the working age population of 15-64 years. However, in four decades for every person in retirement age there will be just 2.4 people of working age.

The generation gap is evident from the new generation of workers:

• Casual: Over 30% of the total workforce is employed on a casual basis while for Generation Y this rises to over 40%.

• Global: There are 20,000 fewer men than women in their 30s in Australia which is attributed to the globalisation of labour drawing men overseas.

• Lifestyles: The length of time workers spend per employer has been in freefall for decades. In 1960, employees averaged 12 years per employer. Today, the average tenure has dropped to just 4 years.

The 21st century workforce is characterised by an ageing population that's unlikely to change in the short term, with longevity rates rising and the trend to have fewer children later in life continuing. So while the labour supply won't increase, the economy and the demand will keep growing. Employers therefore need to adjust to these realities which are here to stay until at least 2047. They have to train and manage their 'Generation Y' staff to ensure that work outcomes and productivity are maintained.

The future lies in helping both older employers and younger employees understand and deal with the generational differences. The report, entitled 'Bridging the Gap', along with employer and employees guides, can be freely downloaded at www.mccrindle.com.au