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Labour and skills crunch worsens

Australian business and industry associations said the lack of skilled workers is now having a dramatic impact on businesses Australia-wide.

Labour and skills crunch worsens
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Yesterday, the Australian Bureau of Statistics released its latest job vacancies data that revealed there were 480,000 job vacancies in May 2022, 58,000 more than in February 2022, and more than double the vacancies in February 2020 (227,000).

The number of job vacancies rose by 14 per cent over the three months to May 2022, to almost half a million jobs. This reflected increasing demand for workers, particularly in customer-facing roles, with businesses continuing to face disruptions to their operations, as well as ongoing labour shortages.

In addition to a higher number of vacancies, the percentage of businesses reporting at least one vacancy also increased.

A quarter of businesses reported having at least one vacancy in May 2022. This rate was more than double the pre-pandemic level in February 2020 (11 per cent), which highlights the extent to which businesses are finding it more difficult to find staff.

The largest growth in job vacancies was in Victoria, which increased by 18 per cent over the three months to May 2022, followed by NSW (12 per cent).

While job vacancies were considerably higher than before the pandemic in all industries, the extent of quarterly growth varied between industries.

The industries with the highest growth in vacancies over the quarter were retail trade (38 per cent), information media and telecommunications services (18 per cent) and arts and recreation services (16 per cent).

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the figures confirmed what is happening on the ground in Australian businesses.

“Australian employers are facing a labour and skills crisis that is only getting worse,” he said.

“Businesses big and small, across every sector, and right around the country are facing enormous pressures to recruit and retain staff. Workforce shortages are holding back business and holding back the economy.

“Crisis-level skill shortages come at a time where unemployment is at its lowest in 48 years and consumer demand is strengthening. Businesses are finding there just aren’t enough people to fill jobs.

“In light of chronic workforce gaps, businesses have turned to existing employers to work additional hours where possible, reducing their operating capacity, or closing their doors entirely.

“According to a recent OECD report, Australia is experiencing the second-worst skills crisis in the developed world, reinforcing the need for swift action from government to ensure businesses have access to the workers they need.

“With labour constraints faced by business getting worse as the economic recovery gathers pace, we must bring together smart solutions that increase investment in education and training, enhance workforce participation and rebuild sustainable migration.”

Australian Retail Association CEO Paul Zahra said the scale of the labour shortage crisis crippling the retail industry has been laid bare with retail trade recording the highest increase in job vacancies of any industry, highlighting the urgent need for federal and state government action.

“The figures confirm what many retailers are experiencing. They simply can’t get enough staff, be it in frontline roles or specialist positions in data and technology, which is severely impacting their ability to trade at their full potential,” Mr Zahra said.

“Exacerbated by overseas and student workers missing from our economy, staff shortages along with rising business costs related to leasing, fuel, energy and supply chains, is pushing many small businesses to the brink. We need to see some immediate practical solutions from government, otherwise this situation will only deteriorate.

“We continue to call for a review of employment income as part of the age pension income test. This would mobilise a willing and able cohort of workers and allow pensioners to supplement their income and work more hours.

“We also need to see reduced red tape around immigration so we can get more skilled foreign workers into the country, along with more international students. Unfortunately, Australia’s brand has been damaged due to the Covid lockdowns from the past two years, and many foreign workers no longer see us as an attractive option to live and work.

“Accelerated training solutions are also important, and we’re continuing discussions with states and territories on how we can quickly mobilise other important workforce cohorts, including return to work parents and people from culturally and linguistically diverse backgrounds.

“The ABS figures confirm the results of a recent survey of ARA members; not one of them said labour shortages had improved over the past three months and 84 per cent said it’s becoming much harder to find and recruit new team members – a dire situation for our industry.”

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