Managing people
Addressing The Skills Shortage With 620,000 Untapped Workers
Research reveals that better utilising the skills of 620,000 underemployed migrant workers in Australia could add $70 billion to the economy over the next decade, creating 51,000 full-time jobs and boosting productivity in key sectors. This requires improved recognition of overseas qualifications and addressing systemic barriers.
04 Jul 2024
By Catherine Ngo Senior Editor and Content Writer
Research conducted by the non-profit organisation SSI in collaboration with Allianz Australia, LinkedIn, Business NSW, and Business Western Sydney has revealed a significant opportunity to address Australia's skill shortages. The Billion Dollar Benefit report found that over 620,000 migrant workers in the country are not fully utilising their skills despite often having higher qualification levels than their Australian-born counterparts.
This underutilisation of migrant skills has substantial economic implications. The research, conducted by Deloitte Access Economics, estimates that $70 billion could be added to the Australian economy over the next decade if permanent migrants worked in roles that matched their skills at the same rate as Australian-born workers. This would create around 51,000 full-time jobs, increase wages for migrant and non-migrant workers, and boost productivity in key industries such as construction, manufacturing, trade, and financial services.
SSI CEO Violet Roumeliotis emphasised that Australia's immigration program aims to attract international talent, particularly to address national skill shortages. However, the research indicates that over 621,000 migrants are unable to work to their full potential, limiting their contributions to the Australian economy.
"For years, we've known that the underutilisation of skills and qualifications was an issue for our migrant and refugee workforce, but for the first time, we can now quantify just what we as a country are missing out on," she said.
Upon arriving in Australia as a refugee in 2023, AbdAlmassih, like many other newcomers, has encountered challenges securing entry-level IT positions despite his extensive experience in Syria.
He lamented the need for recognition for overseas degrees by many IT employers, who perceive them as inadequate. AbdAlmassih expressed frustration at being rejected even for unpaid volunteer roles in the industry despite his 20 years of experience. He emphasised that he applied to various jobs but has yet to receive a response.
Research suggests that unlocking opportunities for AbdAlmassih and countless other migrants and refugees could be achieved by streamlining the recognition of overseas qualifications, providing language training in employment contexts for all migrants, and addressing racial discrimination.
"This would deliver a significant economic benefit, but the real win is to individuals – dismantling barriers excluding migrants and refugees would ensure these workers have equal opportunity to realise their full potential," Ms Roumeliotis said.
Business NSW CEO Daniel Hunter emphasises the importance of skilled refugees and migrants in addressing Australia's labour shortage and promoting economic growth. It highlights the benefits of hiring skilled migrants, which include helping people reach their full potential, easing skills shortages, and increasing participation in the economy.
"Skilled refugees and migrants have overcome significant barriers in coming to Australia, and we are very fortunate that they are here. Businesses crying out for workers must broaden their search to harness migrants' potential.
"There is a double whammy effect from employing skilled refugees and migrants. Not only does it help people reach their potential, but it also helps ease skills shortages and increases participation in the economy.
Mr Hunter urges collaboration among businesses, government, and community leaders to ensure everyone can thrive and contribute to Australia's prosperity.
"It is time for businesses, government, and community leaders to come together and ensure that every individual has the opportunity to thrive and contribute to NSW's and Australia's prosperity. The future of Australia depends on our ability to unlock and harness the potential of all our people."
KEY FINDINGS FROM THE STUDY INCLUDE:
- Recent migrants are 1.7 times more likely to hold a university-level qualification compared to Australian-born workers.
- Migrant workers are currently earning $3.9 billion less than they would if they worked at their skill level at the same rate as Australian-born workers.
- By effectively utilising migrant workers' skills, the construction, manufacturing, trade, and financial service industries would experience the most significant productivity increases.
- The dwellings sector would benefit from increased output due to a more productive and better-resourced construction industry, resulting in an increase in housing supply.
- Every state and territory would benefit from better-utilising migrants' skills. The greatest benefits would go to New South Wales, Victoria, Queensland, and Western Australia.
- The underutilisation of migrants is not due to the fields of study in which they are qualified. Across all broad fields of study, migrants are less likely to work at the correct skill level relative to their Australian-born counterparts despite being more qualified.
Catherine Ngo Senior Editor and Content Writer
Catherine is passionate about unravelling the latest news and insights to help entrepreneurs, small business owners and employers.
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