03/05/2024
Australia’s low unemployment rate conceals an untapped and underutilised workforce that can reduce skills shortages and, with the right opportunities, help prepare our industries for a prosperous future.
It’s well known that we face a critical shortfall of skilled workers in essential services and some of the fastest-growing industries.
The aged-care sector alone needs a staggering 110,000 new workers by 2030. Every construction trade faces skills shortages, and the renewable-energy sector requires an estimated 70,000 workers across trade and supply roles. Then there’s healthcare, early education, food services…the list goes on.
Who are our hidden workers?
But the official unemployment rate doesn’t reveal the whole picture. Recent Australian Bureau of Statistics data shows around 570,000 Australians – 3.9 per cent of our working population – are considered unemployed. If you dig a little deeper, you will find that around 950,000 Australians are registered in a government-supported employment services program to assist them to find and maintain ongoing work. This is a liquid dataset and at any time nearly 800,000 part-time workers want full-time work or prefer increased hours.
These underemployed are available to work more hours and could be better utilised within industries or roles experiencing shortages. The potential of our part-time workforce is immense.
Then there’s the long-term unemployed. More than 100,000 income-support recipients have been out of work for more than 12 months, most willing and able to work and will do so with the right support.
Long-term unemployed can become discouraged from applying for roles following repeated setbacks, and with larger gaps in employment, they are more likely to be overlooked for job vacancies. Both factors remain significant barriers to work regardless of whether they affect job performance.
Brimming with potential
A Harvard Business School study found that those purposefully hiring hidden workers ran attractive returns on investment.
The data indicates that these workers outperformed their peers in productivity, quality of work, attendance, engagement, attitude and innovation. Those companies were also 36 per cent less likely to face skills shortages.
The study also affirms our experience that a disadvantaged background does not affect job performance when provided with the right support and working environment. Many of the workers identified were migrants, people living with disabilities or experiencing mental health challenges and individuals who had previously been incarcerated.
Our own data shows that people living with a disability or experiencing mental health challenges achieve similar employment longevity to other cohorts, and migrants are 12 per cent more likely to last in employment beyond six months.
Our hidden workforce cannot make meaningful contributions and help reduce skills shortages by remaining on the fringes.
We can start by taking the following actions:
Recruitment innovations
Recruitment often prioritises finding the right fit based on experience rather than an applicant’s potential to contribute and grow within the organisation. New metrics must be introduced beyond weighing previous role titles.
As cost-of-living pressures continue to spike and affect those reliant on income support, it is becoming more necessary to take whatever job is available to make ends meet, regardless of the number of hours, short duration or type of work. Modern recruitment tools look at factors like the number of jobs held, duration and gaps in employment, often discounting candidates before their applications are read by a human being.
Investment in training
Dedicated investment is required to fund and prioritise ongoing training or study for future industries to help break the cycle of those on income support relying on short-term, low-skilled work with limited scope for advancement, such as construction labouring and seasonal retail roles.
Providing more opportunities for people of all ages to access apprenticeships and incentives to train now can have a workforce ready to step into gaps as that need grows. This includes aligning secondary education to apprenticeships by providing trade skills that cover maths and numerical literacy to set up apprentices for success.
This approach offers a dual economic benefit; upfront investment in apprenticeships and support for meaningful employment pathways is far cheaper than the ongoing billions spent annually providing income support payments to a growing number of un- and under-employed people. The longer someone is on income support the harder it is to find work, often due to compounding issues of poverty, homelessness and mental illness.
Keeping an open mind
There is ongoing stigma surrounding the hiring of marginalised job seekers. Yet evidence supports the argument that diversity and disadvantage do not impact job performance.
Employers and recruiters must challenge biases against those who may look ‘less than ideal’ on paper. They could instead consider the diverse and transferable skills that a person may have gained in short-term roles and prior careers, and the benefits of hiring an employee grateful to be given a chance and determined to make the most of the opportunity.
Australia’s workforce is brimming with hidden potential that can be tapped to address ongoing and future skills shortages in industries vital to our future health, wellbeing and economic growth. Under- and unemployed people can offer a wealth of talent and dedication if given the right opportunities and support. We need to invest in targeted training, redefine recruitment practices and challenge prevailing biases to fully utilise this untapped resource. We must change the narrative and see 'hidden' workers not as liabilities, but as valuable contributors to our economy and society. Australia's prosperous future lies in discovering and nurturing this hidden potential.