Skills shortage threatens Australia's future prosperity

Australia has ambitious plans for the future of public and private infrastructure, yet we do not have the people and skills to turn that vision into a reality, writes David Simpson, Chief Executive Transport, The APP Group.


Headshot of David Simpson
David Simpson
Chief Executive, Transport
30 April 2024

Australia has ambitious plans for the future of public and private infrastructure, yet we do not have the people and skills to turn that vision into a reality.

The expansion of infrastructure investment is already testing the boundaries of current workforce capacity and the right alignment of skills required. The latest Deloitte Investment Monitor tells us that the total value of planned projects in the database has reached $524 billion, the highest level on record, creating an unprecedented demand for workers with the right skills and experience to support the infrastructure pipeline.

The skills shortage is not just impacting business operations, it has the potential to threaten the future resilience and prosperity of our nation. It is now imperative that government and business prioritise that the skills and training of today meet the needs of the future. 

Pressure points

Australia’s massive infrastructure pipeline is driving unprecedented demand for labour as projects in roads, rail and energy continue to roll out across the country. The pressure is already on, and multiple industries are competing against one another only to find themselves falling short.

While Australia’s major cities will bear the brunt of the labour shortages, there will also be significant pressure on regional and remote areas such as Far North Queensland and the Northern Territory as energy, utilities and defence projects proliferate.

Migration of skilled workers cannot bridge the gap alone in a competitive global labour market, so efforts must be made the grow the workforce locally.

Without significant investment into initiatives to plug the skills gap, the forward pipeline of critical infrastructure projects will come under threat.

Skills for the future

To date, there has been limited success in addressing the underlying causes of the skills shortage.

Challenges in science, technology, engineering and mathematical (STEM) education and immigration policy are being compounded by rapidly growing pipelines across the country which are not being managed through a skills lens.

Australia lags behind its peers in participation in STEM education both at a vocational and university level. More thought needs to be put into how we promote STEM-related careers to the next generation who will have the opportunity to shape the future progress of their nation.

The industry also cannot attract a sufficient supply of talent, including women, which has increased the need to rely on skilled migrants.

While migration has a part to play in addressing the immediate skills shortages, with countries around the world struggling to attract the labour required for the energy transition many industries are competing in a global race for skills.

Not all is lost, however. As investment in energy, defence and social infrastructure projects builds, there is a highly skilled and capable legacy workforce that can be drawn upon as investment in the transport infrastructure sector weakens.

There is a significant opportunity here to translate these transport infrastructure skills and extensive capabilities to the project pipeline. 

The demand for skilled workers is higher than supply, so it won’t always be possible to employ someone new to do the work. 

Instead, many organisations already have access to the talent. Getting the best of the current workforce to transition will be key to fostering capacity, productivity and sustainability across the sector. 

Joint effort

Urgent action is required to secure the legacy of critical infrastructure in Australia. Further investment without the required workforce capacity threatens the ability to realise these ambitious plans.

We must be an active partner in national conversations around the lack of skills and workers required to deliver energy, transport infrastructure, defence and social infrastructure projects. Educational institutions will be critical in this conversation to ensure training and courses are aligned to meet the future needs of the industry.  

We can make this change by identifying and going after targeted initiatives that will have the greatest positive impact. 

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