Skills Shortage Australia in 2023: How Companies Can Fill Skill Gaps?

Oksana Zabolotna
HBD at Qubit Labs

In the past few years, several significant advancements in information technology have greatly benefited the Australian technology industry. These include virtualization integration, open-source information architecture adoption, cloud services adoption, and advances in information science. The Australian government also gives the industry a lot of support through various programs and initiatives.

However, the skills shortage Australia predicts to be a more significant challenge in 2023. According to a Global Talent Crunch Survey, by 2030, it is expected that there will be a talent deficit of 85.2 million workers across global economies and nearly $8.5 trillion in unrealized revenue. Knowledge-intensive industries such as financial services, technology, media, telecommunications, and manufacturing are predicted to be hit the hardest.

 

Tech Skills Shortage Australia: What Statistics Say? 

The technology ecosystem in Australia is expanding rapidly and entering an exciting period of innovation and expansion. Each year, the digital technologies industry contributes approximately $122 billion, or 6.6% of GDP, to the Australian economy. Between 2018 and 2023, this will rise by 40%. Australia’s third-largest contributor to GDP is now the technology sector, so it should be no surprise that major global tech companies choose Australia as a critical launchpad to expand into the APAC region.

Gartner anticipates that mechanical financial plans should develop by 2,1% in corporate and legislative areas across Australia. It is slightly lower than the global average of 2.8%, but the actual numbers may be even lower than the preliminary numbers. According to Andy Rowsell-Jones, vice president and distinguished analyst on Gartner’s CIO and Executive Leadership research team, an economic plateau has already occurred due to the high level of uncertainty and the absence of new business model innovations. In addition, there are over 260,000 IT professionals and 74,000 IT managers in the workforce, an additional 86,000 since the last Census. So why is there a tech skills shortage Australia?

Another factor contributing to the current talent shortage is the widespread adoption of technology, which necessitated hiring tech professionals by every industry or business. The ongoing IT skills shortage Australia has been exacerbated by the rapid adoption of emerging technologies that require skilled tech talent and by the fact that even non-tech companies began to hire tech talent locally to cater to the evolving digital commerce unless it finds more high-tech workers.

For the job market, technological influence is likely to be uneven. Numerous Australians are out of work or underemployed due to low-qualified jobs being automated across various industries and regions. Soon, there will need to be more skilled workers in the country to get well-paying jobs. According to the Tech Council of Australia forecast, Australia will need 1 million people in tech jobs by 2025, meaning around 260,000 more people will need to enter the Australian tech workforce to cover skills shortage Australia.  As a result, businesses and the government should work together to promote opportunities for reskilling, upgrading, and transferring skills into new industries to prevent the enormous harm of IT skills shortage Australia. A culture of lifelong learning will soon replace the career-for-life concept.

 

Skills Shortage List Australia

Both worldwide and inside-Australia organizations’ top change challenge is the need for the competent ability to convey critical jobs. This is incredibly challenging as leaders strive to realize the benefits of investments in specialized technology like Edge and the Internet of Things (IoT). Artificial intelligence, the metaverse, digital algorithms, and other emerging technologies have entered the workplaces. As a result, these technologies are in the highest demand in Australia. 

Cyber security skills shortage Australia also kicked the industry significantly as much as other technologies. The need for tech-specific skills that are currently lacking is likely to rise due to emerging technologies. Cybersecurity efforts are also hindered by this lack of essential skills. Although the greatest threats to cyber security are thought to come from hybrid and remote work environments, 47% of businesses are hindered by a lack of critical skills, cultural barriers, and limited funding. Overall, you can see Australia skills shortage list in specific technologies and fields:

  • data management and analysis 
  • cybersecurity 
  • cloud computing 
  • artificial intelligence and machine learning 
  • robotics 
  • digital and software design 
  • advanced mathematics and statistics

As a result, Australian tech companies are looking for new tech talent using the nearshore outsourcing model.

 

Where Australian Companies Used to Hire Hire Software Engineers?

The most significant preferences among Australian companies when choosing a country for building remote teams are similar time zones and affordable rates. As Australia skills shortage has already brought many inconveniences, Australian companies are looking for a destination to hire more tech talent at attractive rates.  That’s why the most popular countries for hiring tech talent are: China, Indonesia, Malaysia, Philippines, and India.

But are those countries prospective and matchable for the Australian tech industry? Let’s take a closer look: 

  • China

China is the world’s most prominent IT hub. This country covers the skills shortage in Australia due to a huge number of IT professionals. As a result, Chinese software engineers are highly popular with Australian companies to hire remotely. But Chinese tech talent has a different mentality and work culture. In addition, their English proficiency could be better. There are over 7 million software developers in China, which sounds like a lot, but in this case, quantity doesn’t mean quality.

  • Indonesia

The country is well-known for its decent number of software developers and affordable rates. The average annual wage for Indonesian tech specialists varies from $5,000 to $10,000 yearly based on technology and experience. But, Australia – Indonesia has an entirely different way of thinking, which can lead to misunderstanding within the team. In addition, Indonesia faces a vast skill gap among software engineers in specific fields like Artificial Intelligence, Data Scientists, Full-Stack, etc.

  • Malaysia

Skills shortage Australia has made tech companies hire remote teams in Malaysia. Malaysia is another country with a similar time zone to Australia, making it a popular destination for hiring IT specialists. Although this destination has affordable rates among tech experts, finding a skillful workforce takes a lot of work, especially if we talk about narrow-profiled specialists. However, Malaysia counts over 143,000 software engineers; it is a small number as far as narrow-profiled specialists are concerned. 

  • Philippines 

The Philippines is the most popular destination where Australian companies hire software engineers. County has over 190,000 software specialists engaged in the IT industry and has excellent innovative technologies. However, the country has quite complex regulations like the Pro-employee Labor Code means you can’t fire an employee at will in the Philippines.

  • India

Indian tech market solves capacity issues, enhances service quality, and helps efficiently manage the business environment and cover IT skills shortage Australia. Apart from the vast numbers, the talent quality attracts companies wishing to outsource. In addition, India has a significant number of software developers – over 5,8 million. However, despite all its advantages, the Indian tech market has its issues. For example, many software developers caused worse service and needed better English skills.

As you can see, all mentioned countries have issues that can harm the quality of Australian tech companies. So to keep your business productive and get significant growth with a diligent team, Qubit Labs offer an alternative offshore location for Australian companies. 

 

Prevent Skills Shortage in Australia by Hiring in Eastern Europe and Caucasus Region

Australian companies will be delighted to cooperate with Eastern Europe and Caucasus Region as there is an epicenter of innovative technologies, skillful developers, and other perspectives. Even a completely different time zone can be a benefit rather than a challenge. Yes, it requires more intense management, but the result is worth it. Due to IT skills shortage Australia, hiring IT specialists in alternative destinations will be an excellent decision for your business. There are some more benefits you can get from cooperation with Eastern Europe and Caucasus Region:

  • Highly-Skilled Developers 

Eastern European software developers are regarded as one of the best providers of high-quality work due to their high levels of education and IT expertise. They never prioritize quantity over quality. The majority of them employ an agile development method that makes use of a systematic approach that is well-known all over the world for producing positive results. In addition, Eastern Europe and Caucasus Region are full of software developers with excellent skills in high-demand technologies in Australia, like Artificial Intelligence, Data Security, Cloud Engineering, etc.

  • English Proficiency 

These countries have prioritized ensuring that their citizens are proficient in English, which is regarded as a universal language that facilitates global communication. It removes the obstacle to effective collaboration. Eastern European tech forces are focusing on providing their service to foreign companies, that’s why the level of English for the IT industry starts at least from B1-B2 level and higher. Because they have excellent English, they can easily accommodate cultural differences. They can work with remote teams in other countries.

  • Dynamic IT Community

Due to an expanding talent pool, low operating costs, and strategic location, some of the best IT companies have established global offices in Eastern Europe. IT research and development (R&D) centers are also concentrated in Eastern Europe. As a result, they currently serve as the entry point for more than a million IT professionals.

  • Security Regulations

Eastern European and Caucasus nations adhere to the same guidelines as the rest of Europe. It entails adhering to copyright regulations, keeping non-disclosure agreements in place, and putting policies like the General Data Protection Regulation (GDPR) into action.

  • Cultural Fit

Software developers we hire are real professionals and significant cultural additions to your current team. They understand how the Australian tech market works and what goals should be accomplished. 

  • Attractive Rates 

Compared to Australia, the US, and Western European countries, we offer a destination with more affordable rates. You can check our IT salary guide for 2023. For example, an AI engineer in Ukraine makes around $30,000-$40,000 yearly, while in the US, the same specialist receives over $150,000 annually. The difference is significant. 

  • Affordable Tax

Another crucial factor you should keep in mind before choosing a destination for hiring is how high the income tax is. The countries we hire in have the lowest rates in Europe and worldwide. Depending on the region, the income tax ranges from 5% to 20%. 

 

Avoid the Harm of Tech Skills Shortage Australia with Qubit Labs

Offshore outsourcing won’t be a challenge anymore if you work with a professional vendor who manages and supports your team’s processes 24/7. Moreover, your business processes never stop due to an entirely different time zone. As a result, your business growth will be significant and faster. Skills shortage Australia has forced tech companies to look for software developers in alternative locations, but most of the companies are stressed about hiring IT specialists in different time zones.

You don’t need to be worried about extra management, and our software developers are used to cooperating with foreign companies and working in the Australian or US time zone. It is crucial to add that with offshore outsourcing, and you can open new opportunities for your business by reaching new markets.  The job processing is completed quickly and without any obstacles, thanks to a team of highly qualified professionals, resulting in faster and more effective service delivery. As a result, offshoring helps businesses save money on transportation.

 

Final Thoughts

Australia skills shortage is bringing more and more harm to IT companies. The demand for IT professionals is higher than ever before. That’s why it is crucial to choose a destination with a great number of software engineers and affordable rates. 

Eastern European and Caucasus Regions are unexplored for most Australian companies. Still, if you are open to an opportunity in this sector, you can get a skillful workforce and a perfect price-to-quality ratio. 

If you are still trying to figure out where to start, Qubit Labs will be your provider to your future remote team in the most prospective tech hubs. We build a team that matches all your requirements and needs. 

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Oksana Zabolotna
HBD at Qubit Labs
Oksana is a team leader of sales and marketing team at Qubit Labs.