AUSTRALIA IS IN THE MIDST OF A 'TALENT MISMATCH'

A DISCONNECT is emerging between the skill level of unemployed workers and what Australian employers are looking for, according to Hays.

The 2016 Hays Global Skills Index shows that despite an existing pool of labour, employers in high-skill industries are struggling to fill jobs.

Hays Australia and New Zealand managing director Nick Deligiannis says growing job opportunities in highly-skilled industries is creating a 'talent mismatch'.

"Employers in industries such as engineering, IT, life sciences, financial services and professional services have higher demand for talent than those in low-skill industries," Deligiannis says.

"As it takes time to undertake the training necessary to work in these industries, it makes them more vulnerable to skill shortages since the number of people qualified to start work cannot be changed quickly."

Australia has increased from 5 to 5.1 on the overall index, indicating increased pressure in the job market.

The index is calculated through an analysis of equally weighted indicators, including 4.5 for talent mismatch - up from 4.2 a year earlier.

Overall wage pressure remains steady at 6.7, suggesting that most employers remain conscious of costs rather than use salary as a bargaining chip for talent.

"As our economy successfully transitions from the mining to the services sectors, headcounts are growing, market buoyancy is evident and employers report increased business activity," Deligiannis says.

"Given sentiment you'd expect commensurate salary pressure; however, employers instead remain cost conscious.

"It remains to be seen how long this anomaly will last, already turnover is rising and the shortage of highly-skilled candidates in high-skill industries is leading to wage pressure from candidates.

"While far from a universal trend, this suggests that employers must not be complacent in the face of the increasing shortage of skilled talent."

The report was published in collaboration with Oxford Economics.