Businesses predict supply chain issues and rising input costs will cost jobs, but 26% see green transition resulting in jobs growth

Ai Group’s Centre for Education and Training (CET) released the first results from its two-yearly landmark Skills and Workforce survey. The latest data shows the impact economy-wide trends like digital transformation and the transition to a clean economy have on Australian businesses’ skills and workforce needs.

Ai Group Chief Executive Innes Willox said: “We know supply chain challenges and high input costs are concerns for many Australian businesses. This data tells us these challenges may cost jobs in 2024. On a positive note, decarbonisation and greater sustainability drive new demand, and businesses see that resulting in new jobs.

“59% of companies cited new work practices as a key driver of change in their business. This reinforces what we often hear about businesses finding new ways to seek and utilise skills, with work and jobs looking different as a result,” Mr Willox said.

In other key findings, respondents cited factors as likely to impact their business over the next two years, including supply chain disruptions and rising input costs (71%), slowing economic growth (59%), and customer demands for environmentally sustainable practices (57%).

When asked about the implications for their workforce, businesses cited slowing economic growth, supply chain issues, and rising input costs as the biggest threats to employment. 38% of companies surveyed predicted that supply chain disruptions and rising input costs would negatively affect their headcount over the next two years.

Many businesses are viewing the ‘green’ transition with some optimism. Over a quarter (26%) expect that customer demands for more sustainable practices will result in an increase in their headcount over the next two years. The results were similar concerning decarbonisation-driven investment decisions.

When we asked businesses about their workforce’s ability to navigate the challenges ahead, 74% felt their leaders and managers had the skills and capabilities to move towards improved sustainability. However, only a third (35%) said they had the capability to navigate the integration of artificial intelligence (AI) into their operations.

When asked what was driving change in their business, 61% of companies cited ‘changes to technology in the general business environment’. Over half (59%) nominated ‘new work practices’, meaning changes to how work is organised.

The survey Listening to Australian Businesses on Workforce and Skills 2024 had responses from 251 individual businesses, collectively employing 291,232 FTE employees.