Low literacy and numeracy skills a major pain point for employers: Report

skill shortages

Industry advocates are calling on the government to take action to address widespread skill shortages, amid concern small businesses are being held back by a lack of suitably trained workers.

A new report released on Wednesday by the Australian Industry Group has revealed the majority of employers across the country are facing skill shortages and almost all are being affected by low levels of literacy and numeracy among workers.

Ai Group’s head of workforce development Megan Lilly says small businesses surveyed complained of difficulty recruiting, particularly for trade and digital roles.

“It’s becoming increasingly difficult, small businesses are going to have to take on more apprentices and trainees … but they’re having difficulty getting the right candidates for those vacancies,” she told SmartCompany.

Three quarters (75%) of businesses surveyed by Ai Group, large and small, reported experiencing skill shortages, up from 49% in a previous survey conducted in 2016.

Shortages were most often reported in technician, trade worker and STEM categories, but new shortages for roles in business automation, big data and artificial intelligence have also emerged.

“A lot of SMEs are digitising … but they’re finding it hard to get the right skills into their businesses,” Lilly explains.

Literacy and numeracy skills were also outlined as a pain point for business, with 99% of employers, up from 96% in 2016, saying they are affected in some way by low levels of literacy and numeracy in their workforce. This compares to 96% recorded in the 2016 survey.

“[Businesses] are dissatisfied with the basic numeracy and literacy skills of over one-fifth of school-level entrants,” Ai Group chief executive Innes Willox said in the report.

“It is also a concern that dissatisfaction levels are high for the self-management, planning and organising, problem-solving, initiative and enterprise skills of school leavers.”

Foundational skills also increasingly require digital literacy and advanced soft skills are also in demand by employers, Ai Group group said.

The Ai Group survey is based on responses from 298 companies, which together employ more than 110,000 employees. The majority of companies included in the research employ more than 20 employees.

“Grassroots” approach needed to address skill shortages

Lilly says the report showcases the need for government to invest more in language, literacy and numeracy programs in workplaces.

But Peter Strong, chief executive of the Council of Small Business of Australia (COSBOA), believes change must come from a local level.

“This is highlighting the broken vocational training system we have,” Strong told SmartCompany.

“We need a vocational training system at a local level that can get people up to date with skills needed in specific areas … we have to connect the training sector with the employment sector.”

Strong argues grassroots action is needed to solve the problem, rather than “trying to fix the problem at the federal level”.

”It will be the same old faces from the industry and the same old faces from the education,” he says.

“It has to be done locally, so that it can trickle up … pushing it down will fail.”

Strong says digital skills are a particular area of concern for small business owners, particularly as social media and other digital platforms become more important to the success of SMEs.

“It’s the normal stuff like providing a service, being able to lead, being able to help customers,” he says.

“We’ve all got calculators, but there’s still a basic level of understanding that’s needed.”

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Michael Kaff
3 years ago

It’s shocking how the Literacy and Numeracy skills have diminished over the decades. Technology, whilst incredibly important to modern society, has made our kids lazy and technologically dependent.

Many young ones and not so young ones have no real-life survival or problem solving skills. The only skills many accumulate are digital and virtual, which can only partially be transferred and adapted to the real-world.

I have seen this in my tertiary training sector for many years.

A real life example: Recently I gave a young cashier a $10 note and 60c in coins for something that costs $5.60, she then gave me back the 60c, along with a confused look and proceeded to give me $4.40 in coins. She couldn’t work out that I gave her the 60c so that she could give me a $5 note as change, saving both of us the unnecessary coins.

On other occasions the cash register would work out the correct change, saving the cashier the agony of mental maths.

Suffice to say, numeracy is being slowly lost because of the reliance on “machines”.

When the GST came out in the year 2000 and I questioned the GST calculation with vendors, I can’t tell you how many times the vendor would tell me, I don’t know, the machine works it out…and that’s a simple 10% calculation. Those calculations were often incorrect by the way.

Oh, I have many more examples of incompetent or non-functioning cash handlers, as I’m sure you do as well.

As for literacy, you don’t have to wait long to hear someone ruin English with their own, uneducated version of a poorly structured sentence. “Me and my mates” etc.

Back to basics in our schools please, before more damage is done. Asian and European countries do this so well. We need to catch up and soon!