Skill shortages and training gaps exist in skilled occupations at most stages of a business cycle and across all industries. What varies is the extent of these shortages and gaps and the different supply and demand challenges faced by each industry.

Definitions of ‘skill shortages’ and ‘training gaps’ are not always clear-cut, but it’s critical to understand how they are caused so that strategies can be developed to address them.

Skill shortages

Skill shortages exist when employers have difficulty filling job vacancies or specialised skill needs at current levels of remuneration and conditions of employment.

Skill shortages generally involve skills that require a significant period of training and/or experience.

Global competition and new technology have not only changed the type of skills demanded by businesses but also impact on skill formation:

• skill training programs need to be continually developed and adapted to meet rapidly changing skill requirements
• existing workers need to upgrade and renew their skills
• new entrants to job markets must come prepared with recognised qualifications.

This helps to explain the skill shortage problem, as it is difficult for businesses to train workers quickly enough to meet new skill requirements.

Training gaps

Training gaps do not just refer to a lack of a formal qualification. They will also occur if employees do not have the necessary experience, specialised knowledge or personal skills to adapt to new technology and new ways of working.

A competitive environment and new ways of doing business mean core skills, such as teamwork, IT literacy, and business skills, are more important than ever. Many people do not have these skills or personal qualities, even though they are formally trained and qualified for an occupation.

Recruitment difficulties

Skills shortages and training gaps may be further exacerbated by characteristics of the industry, occupation, and employer such as: relatively low remuneration, poor working conditions, poor industry image, inadequate recruitment, and highly-specialised skill needs.

The role of registered training organisations

Registered training organisations (RTOs) can better plan their training provision and prepare their businesses to take advantage of market trends and opportunities by utilising the resources, reports, and data available from Australian government agencies.

This approach to identifying skill shortages and filling training gaps will assist RTOs plan their business around emerging market opportunities and in turn provide the services to business to overcome skill shortages and training gaps.

RTOs can also help employers to:

• take advantage of New Apprenticeships opportunities
• support good practice in recruitment and training
• improve access to Recognition of Prior Learning services for existing employees.