Staff shortages will take 3-5 years to fade: KPMG

The latest KPMG survey of 400 chief executives, directors and business heavyweights found that almost 70 per cent believe acquiring and retaining talent is their key worry, amid negative net migration and soaring COVID-19 case numbers.

And while there have been assurances from the federal government about skilled worker migration being ramped up, KPMG chairman Alison Kitchen said she expected omicron outbreaks will temporarily worsen the pain of labour shortages.

KPMG chief economist Brendan Rynne said the challenge posed by labour shortages was caused by both a lack in “volume of people ... and also the skill sets that we’re chasing”, pointing to almost two years of closed borders and foreign residents returning home as causes.

In the past 12 months, net overseas migration has fallen by nearly 100,000 people – a negative trend – which, although borders have since reopened, Dr Rynne expected to continue.

“As we now come out of that, what you’re seeing is that with net overseas migration being negative for last year – and I’m anticipating it is going to still be negative for this year as well – there’s a lot of pressure being put on [both] permanent migration and temporary skilled migration,” Dr Rynne said.

“There’s an acknowledgement [by the federal government] that there needs to be a ramp-up in net overseas migration[but] it’s tricky in terms of the timing of opening up borders as well.

“There’s still this global health pandemic we’re dealing with, so it’s managing the rapid escalation of migration with some overarching health concerns.”

Dr Rynne also acknowledged that a rapid jump in migration could also dampen wage growth – an issue under consideration by the Reserve Bank – but believed this would be offset by improved productivity.

Staff shortages have also worsened since the survey was completed in November, as thousands of new daily cases across the country force workers into isolation.