The Effects of Skills Shortage on Business and Economy - Research Proposal Example

Research for Business Decision-making Assessment 1 Student’s Name Grade Course Tutor’s Name Date Table of Contents Introduction 3 Literature review 4 The effects of skills shortage on business and economy 4 The role of different stakeholders 4 Research problem 6 Data sources 7 References 9 Introduction For businesses in Australia and elsewhere to thrive, quite a significant input of monetary and non-monetary resources is needed. This research proposal will delve into the importance of one of the key non-monetary resources needed in businesses – skills. Notably, the shortage of skills is an issue that can affect businesses negatively because, as Richardson (2007, p.8) notes, acute skills shortage hampers not only the quantity of products or services produced by a business, but also the quality of output. Although there is no agreed definition of what constitutes skills shortage in literature, this research proposal will use Shah and Burke’s (2005, p. 45) definition, where the two authors indicate that a shortage of skills occurs when “The demand or workers for a particular occupation is greater than the supply of workers who are qualified, available and willing to work under existing market conditions”. From the foregoing definition, it is rather obvious that a combination of factors contributes to a shortage of skills. First the demand and supply of skilled workers seems to be a major factor. Next, it would appear that the willingness of the qualified workers to take up jobs available in prevailing market conditions is also an issue. While skills shortage has been addressed by numerous authors (for example, Cameron 2011; Shah & Burke 2005), not much has been discussed in literature (or at least in the Australian context) about how individual businesses can address skills shortages by, for example, forecasting the skills they will need in the future, and hence recruiting the same or developing an internal pool of the same skills. This proposal, therefore, seeks to fill the existing gap in knowledge by identifying ways through which businesses can address skills shortage at an organisational level. The proposed research is justified by an understanding that much as policy action by the government has been called for as a way of addressing skills shortage; it is the organisation’s prerogative to forecast, plan and even create a pool of skills that will help it conduct its business optimally. Literature review The effects of skills shortage on business and economy There is a wealth of literature documenting the causes and possible solutions for skills shortages facing Australian businesses. Cameron (2009, p. 29), for example, indicates that an interplay of demographic and cyclic trends as well as macroeconomic forces has over the years contributed to skills shortages in Australia. The suggestions notwithstanding, it is rather evident that Australian businesses cannot fully compete globally or innovate fully with skills shortages being a recurrent business issue in the economy. In a research conducted by AIG (2008, pp. 22-23), for example, sampled Australian firms revealed that they would need an average of 210,000 skilled full-time employees to meet their innovation and competitive needs. The sampled organisations further indicated that as long as the skills shortage prevailed, their capacity to operate optimally would be compromised (AIG 2008, p. 23). In other words, the skills shortage is not only an issue for individual businesses but also an issue for the larger Australian economy, since it negatively affects the country’s competitiveness in the global market. The role of different stakeholders Canterford (2006, p. 30) has made attempts indicating whose mandate it is to ensure that skills shortages in Australia are managed at kept at minimal levels. The author indicates that the government has a responsibility to manage the economy and regulatory frameworks to ensure that skills shortages are addressed (see figure 1 below). However, the government co-shares the mandate to educate, train and change perceptions with workers (employees). Moreover, the government co-share the responsibility to create the necessary health facilities, provide health services as well as develop the appropriate infrastructure to support the skills needed with the business owners (employers). The business owners and the workers also have a co-shared responsibility in career development. Individually however, the government, business owners and the workers have a contribution to make towards alleviating skills shortages. From Canterford’s (2006, p. 15) arguments therefore, it is rather obvious that addressing skills shortage is the responsibility of the government, the business owners as well as the workers. As illustrated in figure 1 below however, technology change and globalisation are external factors, which influence government, and by extension, employees and employers. Figure 1: Stakeholders’ influences on skills shortage. Source: Canterford (2006, p. 15). While much focus has been given to the government’s role to create the necessary regulatory framework and adopt ideal social and economic policies to ease the burden created by the skills shortage, little attention is paid to employees and employers. Specifically, it would appear that little research has been done to educate employees and employers about their influences on skills shortage. Backes-Gellner and Tuor (2010, p. 271) are among the few researchers who have dwelt on the roles of employers in alleviating skills shortages. The researchers found out that if employers created a good working environment for workers, the organisation would attract and retain the right skills set. Beyond a good working environment, Backes-Gellner and Tuor (2010, p. 275) found that training programmes by businesses were able to impart the right skills in the employees. As a result of training, firms were not reliant on getting skilled labour from external sources. While Mitchell and Quirk (2005) admit that in-house training takes time, is costly and may be imperfect in relation to equipping workers with comprehensive skills, they also agree that it is a much better alternative than the passive acceptance by organisations that there is a skills shortage and hence implying that they cannot do anything about it. In countries such as Russia, there is evidence that retraining an existing workforce is always a viable option for dealing with skills shortages when compared with acquiring new employees who have the right skills. Tan et al. (2007, p. 3), for example, established that since most firms were not assured of getting skilled workforce either from training institutions or the external market, most of them opted to train from the existing pool of workers. Research problem From the literature review section above it is evident that regardless of what the government and workers fail to do in relation to reducing the skills shortage, it is the businesses that lose out most due to the skills shortage. After all, it is the businesses ability to innovate and to compete in larger markets that is compromised by the skills shortage. The proposed research, therefore, seeks to find out if Australian businesses understand that they can intervene by equipping their workers with the right skills to counter specific skill shortages through internal training programs. Specifically, the proposed research seeks to: I. Find out if Australian businesses are aware that they too have a role to play in equipping workers with the right skills to fill existing skills shortages in their respective organisations II. Identify how businesses address skills shortages at an organisational level III. Find out if Australian businesses are willing to equip new or existing employees with skills that they lack IV. Find out the perceptions that different businesses have regarding in-house training as a viable strategy for filling internal skills shortages. Data sources The proposed research will obtain quantitative data through questionnaires, which will be sent to 100 small and medium enterprises in Australia. The questionnaires will be sent via e-mail for purposes of speed and convenience, and will act as the main source of primary data for the proposed research. As Boshier(1990, p. 51) notes, e-mail questionnaires provide the sampled respondents a chance to respond without coercion from internal or external sources and is thus a viable method of ensuring optimal reciprocity by the respondents. Moreover, by sending e-mail questionnaires, the researcher gives the sampled respondents equal opportunities to respond. Secondary data will also be obtained for use in the proposed research. The data will be obtained from a detailed review of existing literature both from and outside Australia and will be used as the proposed research’s qualitative data. The choice of the literature review as a source of data is informed by Rowley’s (2004, p. 32) indication that in addition to helping the researcher identify a research topic, the review of literature is important in understanding a prevailing situation as well as analysing and interpreting results. Cronin, Ryan and Coughlan (2007, p.40) however indicate that for literature reviews to act as significant sources of data, they need to be reviewed systematically and intentionally. In other words, the researcher must have clarity on the type of data he is looking for and should therefore systematically analyse available literature to obtain it. The use of both qualitative and quantitative data in the proposed research is informed by recent trends in research where a mixed method of research comprising both analytical and statistical data is used. As Creswell (2003, p.17) indicates, the mixed method of research (which is projected for use in the proposed study) draws data from multiple sources. In the case of the proposed research therefore, an email questionnaire will be used as the preferred instrument for obtaining primary data, while a systematic review of literature will be used to collect secondary data. References AIG 2008, ‘Skilling for innovation’, Australian Industry Group and Deloitte, Australian Industry Group, North Sydney. Backes-Gellner, U & Tuor, SN 2010, ‘ Avoiding labour shortages by employer signalling – on the importance of good work climate, and labour relations’, Industrial and Labour Relations Review, vol. 63, no. 2, pp. 271-285. Boshier, R 1990, ‘Socio-psychological factors in electronic networking’, International Journal of Lifelong Education, vol. 9, no1, pp. 49-64. Cameron, R 2011, ‘Responding to Australia’s regional skills shortages through regional skilled migration’, Journal of Economic and Social Policy, vol. 14, no.3, pp. 1-33. Canteford, S 2006, ‘Skills shortage in Australia’s regions’, Bureau of Transport and Regional Services Working Paper, no. 68, pp. 1-48. Creswell, JW 2003, Research design: qualitative, qualitative, and mixed methods approaches, 2nd edn., Sage Publications, Thousand Oaks, CA. Cronin, P, Ryan, F & Coughlan, M 2008, ‘Undertaking a literature review: a step-by-step approach’, British Journal of Nursing, vol. 17, no.1, pp. 38-43. Mitchell, W & Quirk, V 2005, ‘Skills shortages in Australia: concepts and reality’, Centre of Full Employment and Equity, Working Paper, no. 05-16, University of Newcastle, November. Richardson, S 2007, ‘What is a skill shortage’, National Centre for Vocational Education Research, pp. 1-30. Rowley, J & Slack, F 2004, ‘Conducting a literature review’, Management Research News, vol. 27, no.6, pp. 31-39. Shah, C & Burke, G 2005, ‘Skills shortages: concepts measurement, and policy’, Australian Bulletin of Labour, vol. 31, no.1, pp. 44-71. Tong, T, Yevgeniya, S, Vladimir, G, Rostislav, K & Anna, K2007, ‘Skills shortages and training in Russian institutions’, Institute for the Study of Labour Discussion Papers, no. 2751, pp. 1-51. Read More