No one dare mention the words ‘skills shortage’, not in this climate.

The reality, however, is a different story. A new report by Australian Human Resource Institute found the following:

• seven out of ten (69.42 %, see graph) employers experience skills shortage
• more than 85% believed skilled migration is necessary
• nine out of ten respondents (95.03%) whose organisations employed skilled migrants reported trying to fill the vacancies within Australia first.

Whatever political persuasion one belongs to, the cold truth is Australia is ageing, birth rates are at a historical low, our universities are not supplying enough graduates, and of course we export roughly 5% of our populace at any given time. Simply, the reality for many employers is the inability to fill skilled vacancies (note, there is a difference between skills shortage and candidate shortage).

The tragedy of the current recession is twofold – a very real short-term economic hardship, and the clouding of our collective perception on the need to plan for the workforce challenges the nation will face in the future (That a whole industry which thrives on the supply and demand of labour, remains a silent observer is baffling. Not a squeak. Do we only talk about ‘skills shortage’ when it serves our purpose?). When the turnaround happens, we will rue the short-sightedness of our current actions or inactions.

The AHRI report should ignite discussions again, however unfashionable in the current climate.

• CEO attrition rate in Australia is higher than the Global average. Booz-Allen study found 18% of Australian CEOs left their jobs, compared to the global average of 14 percent. Does this means more business for executive recruiters and job boards?
• 3.3 million Australian (of the 3.9 million survey) intended to retire at some stage. Given the current downturn, discussions to replace the workforce is far and few.  Long-term skills shortage problems, however, will continue to confront the nation.
• Seth Godin wonders why you are not marketing your jobs. (It only takes 10% as much effort to hire someone in the bottom 90% of the class. And it takes the other 90% to find and cajole and retain the top 10%.)
• Techcrunch reported on a job board started with a tiny budget of US $500. Technology becomes more affordable (even free), market entry in the job board space becomes even easier. Technology in itself is no longer an advantage.

The bad news on the global financial meltdown is relentless.

In response a spate of local reports paint a pessimistic outlook on employment and hiring:

• Hudson report found national employer sentiment has slowed for the third consecutive quarter
• SEEK Employment Index – Online job ads fell 4% in September
• Manpower-Melbourne institute’s Monthly Employment Report, expects employment growth to decrease by 1.8% in Oct
• RCSA Business Confidence report – recruiters confidence drops to its lowest since 2001

It is easy to be distracted by the news of the day.

The reality is, regardless of short-term economic dips the fundamental challenges faced by recruiters remains intact. Finding good talent is still critical and requires hard and innovative work. Besides, skill shortage doesn’t go away overnight because the economy suffered.  The problem of ageing population is still with us (See Mercer’s new Workforce 2012 report). National Unemployment rate in Australia hovers around 4.3% (wake me out when it hits 5%), half the country still reels under unemployment rate of 3.0% and below (Not all regional economies are the same).

If we, however, did move into a recession or a long period of downturn, than it is even more important for employers to pay attention to recruiting good talent, people who will ensure business survive or even thrive during a down period.  One benefit of an economic downturn, if any, is it highlighted the stark difference between recruiters who deliver real value and run of the mill players who just shows up to ride the boom times.