Hiring manager say skills scarcity top challenge for organizations: report
A third of employers across Australia are expecting an increase in headcount in the next three months as hiring sentiment among employers improves since the first quarter of the year.
ManpowerGroup's latest Employment Outlook Survey revealed that 33% of employers anticipate an increase in hiring, while 47% are expecting no changes to their headcount.
On the other hand, 16% of employers said they are anticipating a reduction in staffing, while four per cent are unsure of their hiring plans.
Overall, Australia's Net Employment Outlook improved to 17%, up by four percentage points since the first quarter of the year but two percentage points lower compared to the same period last year.
By company size, businesses with the strongest hiring outlook were reported among those with 250 to 999 employees (25%), as well as those with 50 to 249 employees (23%).
By sector, the Financials and Real Estate sector saw the strongest hiring outlook with 27%, followed by Industrial and Materials (24%).
By location, Queensland recorded the strongest hiring outlook with 29%, followed by the Northern Territory (19%).
Tasmania and South Australia logged the lowest hiring outlooks, with eight per cent and 10%, respectively.
The improving hiring sentiments come as the hiring managers across Australia report skills scarcity as a top challenge for them, according to The Hays 2025 Skills Report.
The report, which polled over 5,600 respondents in Australia and New Zealand, found that 91% of hiring managers identify skills scarcity as a top challenge.
In fact, 85% of hiring managers are reporting a skills gap that is negatively impacting the performance of their organisation. Industries reporting the most significant skills gap are:
Public Safety and Administration (60%)
Manufacturing (52%)
Financial and Insurance Services (51%)
Accommodation and Food Services (50%)
Professional, Scientific, and Technical Services (48%)
According to the Hays report, 60% of hiring managers are expecting the skills gap to stay the same or worsen over the next five years.
However, they believe that in-demand skills will change in the future, with human skills emerging on top of the most needed skills moving forward. These skills are:
Communication, teamwork, and collaboration (84%)
Critical thinking - problem solving (81%)
Adaptability/flexibility (71%)
To address the skills gap, 86% of hiring managers in Australia and New Zealand said they are turning to skills-based hiring.
Meanwhile, Robert Half recently advised employers to show that they care about employees' wellbeing through competitive pay and benefits.
This comes as its recent findings revealed that employees want more pay (62%), flexible work hours (38%), and more benefits (36%) from their employers this year.
"In the current economic climate, characterised by high inflation and cost-of-living pressures, it's no surprise that employees are prioritising financial security and comprehensive benefits packages," said Nicole Gorton, Director at Robert Half, in a statement.
"Cash has always been king, but it is especially so since flexible work hours, remote working options, and professional development have become more commonplace as pay alternatives in the modern workplace."
