People & Human Resources

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

Matthew Elmas /

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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Matthew Elmas

Matthew is the news editor at SmartCompany.

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