• Skills shortage will return, says experts
• Due to drop in training positions
• Business Smarts: Check the latest

COMPANIES will again find it difficult to recruit and retain qualified staff as trading conditions improve, experts warn.

The Australian Industry Group (Ai Group) and consultant Deloitte warn that the skills shortage will re-emerge because of a drop in training and number of apprentices.

This is despite businesses doing all it can to hold on to staff during the economic downturn.

A survey of 500 chief executives released by Ai Group and Deloitte today showed employers were favouring shorter work hours, salary freezes and forced annual leave over laying off staff.
Employee numbers were expected to drop by an average of 3.8 per cent across all industries, the research found.

Of the respondents to the survey, 45 per cent said they were reducing non-labour costs, 40 per cent were shortening work hours, 35 per cent had introduced salary freezes.

Some 32 per cent had brought forward leave as an alternative to cutting staff.

Employers appeared to have learned the lessons of previous economic downturns and wanted to retain staff in order to capitalise on economic recovery, Ai Group chief executive Heather Ridout said.

However, she warned that cuts to training budgets and a lower intake of apprentices would contribute to a skills shortage once trading conditions improved.

The survey showed 37 per cent of employers of apprentices indicated they planned to reduce the number of trainees, while the uptake of new apprentices was expected to drop by nearly 11 per cent.

Expenditure on training was likely to fall by about four per cent in the current financial year, the research showed.

"These mean that, as night follows day, when we come out of this downturn we are going to have a re-emergence of the skill shortages that we had in the lead up to the downturn," Ms Ridout said.

"So it's a big issue, going forward for the economy."

Deloitte Australia chief executive Giam Swiegers said he had no doubt a skills shortage would be evident before the end of calendar 2010.

Ms Ridout praised the Federal Government's incentives to businesses employing apprentices but said more needed to be done in areas such as higher education to address under-trained workers.

"The message I get from this study is there's a lot of here and now problems for skill shortages," she said.

"The Government has moved some way down the track to address them, more will need to be done. Industry is going to need to do its part as well."