Supply chains disruptions are also expected to hit the nation this year
Australia's business leaders have revealed they’re expecting COVID-19 and skills shortage to be the major inhibitors of their companies' growth this 2022, according to the Australian CEO survey 2022. The survey showed that 79% of chief executive officers are anticipating further disruptions this year, with almost half of them saying COVID will be the leading inhibitor to growth.
Skills shortages also emerged as the third most nominated inhibitor for business growth this year, according to the survey, which revealed that 73% of CEOs are anticipating hardships in finding and retaining talent this year. The said problem reflects the ongoing staff shortages in Australia, exacerbated by the outbreak of the Omicron variant. As a result, it disrupted supply chains amid the absences of essential workers who fell ill or became close contacts to the virus.
Such disruptions in the supply chains are also expected by CEOs this year, with only 17% expecting improvement and 31% saying it will be no different from the turmoil last year.
"Business leaders expect further disruption from COVID-19 and they expect to face additional supply chain interruptions and challenges as well as intensifying skill shortages across a wide range of occupations," said Innes Willox, chief executive of the Australian Industry Group.
To address the problem on supply chains, the report revealed that business leaders are now focusing on changing inventory practices and supply arrangements. Companies are also looking to invest in staff training and development. They are also optimistic on that ground, according to the report, as the number of business leaders expecting to increase their workforce is over twice larger than the "share their expectation of employee numbers to fall in the year ahead."
Read more: CEOs get hefty pay despite pandemic slump: report
What should HR leaders do?
Megan Lilly, executive director for education and training for the Australian Industry Group, previously spoke with HRD on the topic of significant shortage in skilled labour. Lilly said the problem has already existed even without Omicron, citing the lack of skilled migration, international students, backpackers, and other workers.
According to the director, the problem should not be looked at as a "supply and demand mismatch," before recommending that better investment and skill development of local talent should be a must to companies.
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“It’s estimated that over the next few years, Australia will need approximately 11,000 new engineers annually, which is around 2,400 more than the domestic undergraduate engineering completions each year,” added Lilly. “Some of this shortfall usually comes from the more than 6,000 overseas undergraduate engineering students who graduate each year and who are able to work for two years in Australia. It is an imperative to continuously develop those currently in employment, the existing workforce. This will need to be an ongoing effort, be work-based, and industry-led.”