Closing the tech skills gap in Australia: Focus on security, AI, and cloud

The Pluralsight Tech Skills Report found good news for Australian organizations: More than half (54%) say their organization's IT skills gap is better than it was last year. Only 18% say it's worse.

Despite making progress, skills gaps aren’t gone. In fact, they’re still racking up costs. 56% of organizations report that tech skills gaps have cost them over $360,000 AUD in the past twelve months. 67% have also abandoned projects due to skills shortages.

We surveyed 300 tech executives, L&D leaders, and tech practitioners in Australia to learn how they can mitigate these costs, overcome their biggest challenges, and connect learning to business goals.

Download the Tech Skills Report.

Australian tech executives, practitioners, and L&D leaders disagree on the most needed tech skills. Tech executives say it’s cybersecurity, practitioners say it’s AI/ML, and L&D leaders say it’s IT.

None of them are wrong—organizations need all of these skills. But some of these capabilities are more critical than others, at least right now. 

67% of Australian organizations have abandoned projects because they didn’t have people with the right technical skills. Cloud, cybersecurity, and AI/ML projects suffer the most. 

Increased use of AI in Australia has also increased demand for cloud, cybersecurity, and AI/ML skills. What’s more, 27% of Australian organizations have more AI-enabled tools than AI literate employees, creating an even wider rift between AI investment and readiness.

It’s no surprise, then, that cloud, cybersecurity, and AI/ML are the biggest skills gaps in Australian organizations, too. Tech and L&D leaders may not agree with each other, but it’s clear that upskilling teams in these core areas will have the greatest impact on delivery.

In Australian organizations, skills shortages lead to: 

• Unplanned outsourcing, contracting, or hiring (37%)

• Project delays (31%)

• Inability to adopt new technologies (30%)

• Employee burnout (29%)

• Failure to deliver key projects (29%)

• Security incidents or vulnerabilities (29%)

93% of Australian tech executives claim skills gaps have caused tech projects to go over budget as a result. The projected total of these direct and indirect costs differs by organization size. 41% of organizations with 500 or more employees put the cost of skills gaps at $500,000 AUD or more, compared with just 27% of smaller organizations.

Skills gaps persist in Australia because most organizations either don’t know how to solve the problem (53%) or they lack the authority or resources to do so (30%).

Common upskilling challenges also hold them back. Tech executives, practitioners, and L&D leaders cite lack of learning time as the biggest barrier, with lack of financial resources as the second-largest hurdle.

But it’s not all bad. Organizations have seen success closing tech skills gaps with online learning platforms (59%), AI tools (49%), and instructor-led training (40%). The least successful method for Australian organizations is events like hackathons (26%).

Most Australian organizations (70%) rely on proof of skill or competency (such as completed certifications or assessments) to assess upskilling ROI. The problem is that completion metrics can be gamed. 86% of tech executives and 84% of L&D leaders worry their skill acquisition metrics can be manipulated to falsify completion.

What’s more, 77% of Australian tech executives have seen employees complete training or earn a certification and still not be able to use those skills on the job. Unsurprisingly, 91% of tech executives and 82% of L&D leaders in Australia also say employees who complete training or earn certifications require additional training before they’re able to use new skills in their day-to-day work at least some of the time.

To gain an accurate picture of skill acquisition and ROI, organizations need to connect learning to business outcomes. Unfortunately, only 26% of Australian organizations measure upskilling ROI against business KPIs right now.

Compared to last year, most Australian organizations (61%) are hiring more junior tech professionals than they did last year. But 90% of tech executives, 91% of tech professionals, and 86% of L&D leaders are still concerned their organization doesn’t have enough junior tech professionals in the talent pipeline to cover future skills gaps.

As organizations look ahead, they need a plan to develop junior talent for more advanced roles instead of relying on hiring to fill skills gaps.

With these insights in mind, reevaluate your employee training strategy. How have you tried to close skills gaps in the past? What’s working? What isn’t? 

In general, start by: 

• Focusing upskilling efforts on the biggest gaps. Skills gaps in cloud, cybersecurity, and AI/ML are impacting Australian organizations most. Prioritize filling those gaps first.

• Supporting employees beyond training and certifications. Provide hands-on learning opportunities like labs, sandboxes, or instructor-led training to help skills stick for real-world application.

• Measuring more than completion. When assessing employees’ skills or upskilling ROI, look beyond completion and participation. Tie learning to business outcomes and KPIs.

Uncover more insights and the secret to upskilling ROI. Get the Tech Skills Report.