'More skills, more training, more access to employment'

The government’s recently released white paper outlines several plans towards a dynamic and inclusive labour market, including the objective of achieving sustained full employment where ‘everyone who wants a job is able to find one without having to search for too long’.

And a key part of the message is around addressing skills shortages and mobilising more of the labour force, according to John Quiggin, VC senior fellow of the School of Economics at The University of Queensland.

“I think, in practice, the kind of policy programme that's emerging is around more skills, more training, more access to employment for older people, but no change in macro policy, that of the economy as a whole,” he says.

Retirees returning to work

More mature workers bring benefits to organisations and the wider economy, says Quiggin.

“With the current period of full employment, we’re seeing lots of people who were considering retirement deferring it, and lots of recently retired people coming back on some kind of part-time basis.

“It’s certainly very common for people in their late 60s to be getting back into the workforce and there’s more of an appreciation of the positive qualities they bring.”

Back in the 1970s, during a period of increased unemployment, employers stopped hiring rather than laying off staff, he says.

“Mostly, therefore, the unemployed were young people. It’s these people now that are the mature-aged workforce we’re talking about.”

Structured training for those returning to work

With full employment now, employers should be looking at whether their policies are designed to make the best use of the workforce available, says Quiggin, who specialises in behavioural decision-making. Organisations should be prepared to offer flexibility too, he adds.

“We've seen this requirement also with remote working but as long as we have full employment, employers need to be prepared to offer flexibility.”

What’s more, it’s important to provide training in a structured way for those returning to the workplace and accept they may have a different set of expectations, he says.

“In times like this, organisations can't manage a workforce with an assumption of very high levels of commitment; for example, in terms of the hours they’re prepared to work.

“Elon Musk was saying to his employees: ‘If you're not going to turn up for 50 hours a week, we really don't want you.’ Those kinds of attitudes can't be sustained in a situation of full employment.”

Reigniting Australia’s productivity growth

Australia’s unemployment rate is 3.7% - near the record low of 3.5% - which the government says is a great defence against global economic volatility. Another of the objectives outlined in Working Future: The Australian Government’s White Paper on Jobs and Opportunities is to reignite the country’s productivity growth which is at its slowest in 60 years.

“Productivity is mainly driven by technology,” adds Quiggin. “The decline in productivity growth is global and we may be able to shuffle little bits and pieces, but [boosting productivity growth] is an objective - which has been stated over and over again - and ultimately depends on what happens to technology. In terms of measured productivity, that has been slowing down for the last 20 or 30 years.”

Developments in AI have potential to influence this.

“There are some obvious areas where we're seeing this, for example, improvements in coding; however, whether the kinds of large language models we see will actually produce genuine productivity gains remains to be seen,” he says.

Still room for improvement with employment

The last time we saw a comparable period of full employment, says Quiggin, was the post-war boom, which lasted until the early ‘70s.

“In Australia, we came close to full employment just before the global financial crisis, but not for long enough to really have much of an effect. And it only really gradually came down in recovery since the pandemic, and particularly since the end of the lockdown we've seen sustained periods of full employment.”

Working on EVP and communicating its benefits is one way to strengthen the ability to attract talent, he says.

“The white paper talks about how there’s still underemployment and mismatch. So by no means has everyone - even those with work – found the jobs or the hours they ideally want. There's certainly room for improvement there.”