Aside from chronic skill shortages across the tech sector, he pointed to the risk of time and cost blowouts in major infrastructure projects, as well as for the residential sector and housing builds.
“It’s massively across the whole infrastructure sector,” he said. “If you look at the forecast spend of collective governments and the number of experienced engineers, architects, designers, it’s going in two different directions. It’s going to take longer and longer and cost more and more. ”
The skills shortage did not feature in the list of top concerns in previous years of the KWM survey but in a sign of the emergence of the problem, the directors nominated challenges from wider labor markets constraints and skills shortages as the second-biggest issue of concern for boards, nominated by 52.3 per cent of directors.
While the jobs summit is likely to stoke old ideological divides between business and the unions over fixing the industrial relations system, business groups believe the migration system could be an area of “common ground” where gains are quickly made.
“There’s some real problems with the migration settings. First of all, we’ve got to play catch up. Think about the numbers. We used to take about 230,000 people a year … a combination of temporary, permanent migration, students, we haven’t been doing that, ”Business Council of Australia CEO Jennifer Westacott said on Monday.
“About 90,000 a year have been leaving the country. So, we are about 300,000 short and we saw some data a couple of weeks ago which showed 500,000 [job] vacancies, so we’ve got a short-term gap to fill, ”she said.
“The system is weighted too much to short-term, temporary migration, those two-year visas. You are not going to up and leave your country and family for two years. And of course there are some real problems with processing visas at the moment. ”
The Australian Retailers Association CEO Paul Zahra also pointed to the migration system, in addition to changes they would like to see to encourage more mature age workers and women.
“We need to see reduced red tape around immigration to streamline the process for foreign workers into the country,” he said.
“Unfortunately, Australia’s brand has been damaged due to the COVID lockdowns from the past two years, and we’re struggling to complete globally for foreign workers, who no longer see us as an attractive option to live and work.”
Mr Scott said the skills shortage was also forcing a rethink on remuneration with many boards considering the use of employee share schemes to encourage workers to invest in the long-term success of a business, to avoid an arm’s race on wages.
Boards are hoping to take advantage of changes in the Coalition’s March federal budget to scrap the cap on the value of shares which can be issued to non-C-suite employees. They followed changes to remove the taxing point when employees cease employment which came into effect from July 1.
“I don’t buy this argument that you just pay people the amount you have to when skill shortages are high because then you are just encouraging them to go to the highest bidder,” Mr Scott said.
“Those organizations that provide a common sharing of the collective outcomes through shareholdings as part of their remuneration packages are much more sustainable over the journey,” he said.
“Employee share schemes are a way of saying we are collectively all owners of this business, which, I think, is a major cultural bonding agent.”
Lead KWM author Meredith Paynter agreed share schemes provided a “form of glue” between employers and employees.