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260,000 gap: urgent action needed on tech talent shortage

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An organised response is needed to address Australia’s hot tech-talent market in which leaders in artificial intelligence and machine learning are being headhunted for multiples of their current salary, insurtech experts say.

Aon Sydney-based Senior Consultant Michelle Watson says there is minimal meaningful action to address tech expertise supply, even as the Tech Council of Australia predicts a 260,000 shortage of technology workers by 2025.

"Employees are seeing an opportunity in the current market to make up for lost time and get a meaningful, potentially life-changing salary increase by moving externally,” Ms Watson said. “The organisation is then forced to pay a ‘new hire premium’ to attract fresh talent, and the cycle of attrition and recruitment continues to ripple across the industry.”

Aon crunched its Australian remuneration database of 135,000 lines of data submitted by more than 700 organisations – finding the premium for new hires in tech roles is “real and significant”.

More recent hires earned 8% more than average, with some “particularly hot roles” attracting a premium as high as 20%.

The Tech Council wants a million tech sector jobs created by 2025, to refine Employee Share Scheme rules to reward talent, and improve availability of appropriate visas.

Insurtech Australia CEO Simone Dossetor tells insuranceNEWS.com.au tech talent is a challenge for IA members and she supports these proposed employee share and skilled migration solutions, and IA is also considering internship and graduate programs.

“Our advisory committee has talent as a key strategic area for Insurtech Australia to consider and we will be looking at options to support insurtechs and the insurance community to attract talent into the industry,” she said.

The increased salaries and long lead times for technical roles means it “has now become essential” for new insurtech founders to have an IT technical co-founder given the difficulty and cost of attracting IT talent, Ms Dossetor says, and it is even harder for insurers to attract IT talent for internal corporate roles given the competition.

“Insurtechs need to compete globally for talent, with anecdotal examples of thought leaders in emerging areas such as AI and machine learning being headhunted for multiples of their current salary,” she said. “It is difficult to get consensus – and funding – for industry-wide initiatives.”