Australian businesses are facing an unprecedented challenge. The country is facing a “skills recession,” and it comes at a time when employers have been hit hard by the COVID-19 pandemic. According to a new report, this has led many organizations to offer higher than planned salaries as they struggle to attract skilled candidates.
Higher-than-planned salaries offered to attract skilled candidates
The report found that organizations are competing fiercely to attract skilled workers, with three-quarters of them offering salaries higher than initially intended. The primary reasons for this trend are a shortage of highly skilled professionals and an increase in competition from other employers.
Matthew Dickason, CEO Asia Pacific at Hays, believes that organizations are heading towards a skills recession. He commented in a media release, “It’s clear we’re heading for a skills recession as a shrinking talent pipeline threatens the effective operation and growth plans of organizations.” The report by recruitment firm Hays revealed that three-quarters of the surveyed organizations have offered salaries higher than initially intended to lure in highly skilled candidates. Moreover, 62% of businesses are upskilling their staff to plug the skills gap, while 37% are considering employing or sponsoring overseas candidates. However, the Hays report also noted that despite the growing concern over the lack of skilled professionals, vacancy activity is relatively quiet. Dickason remarked, “After normalizing from last year’s historic peak, today’s headcount expansion plans suggest that current economic uncertainty will not impact all workforces.”
Upskilling Staff to Overcome Skills Gaps
The report found that many organizations are investing in upskilling their staff to address skills shortages. This approach can lead to many benefits for businesses, such as retaining valuable employees, improving productivity, and boosting employee morale. Upskilling initiatives can take many different forms, such as providing training programs, mentoring, job rotation, and cross-functional training. However, introducing new skills into the workplace can be challenging. Companies must frequently assess the skills and qualifications of their staff, identify gaps, and offer relevant training and development opportunities.
Considering the employment and sponsorship of overseas candidates
The report found that 37% of organizations are considering employing or sponsoring international candidates to meet the skills shortage. Hiring skilled professionals from overseas can bring significant advantages to organizations. They can offer diverse perspectives and bring a wealth of knowledge and experience. However, there are also challenges to overcome when hiring overseas candidates. Employers must ensure that they comply with immigration laws, which can be time-consuming and complicated. Additionally, integrating individuals into a new culture and work environment can take time and effort, leading to potential workplace culture clashes.
Impact of skills shortage on organizations
The report notes that 88% of organizations are experiencing a skills shortage, with 40% saying its impact has intensified over the past year. The reasons for the skills shortage include a lack of people with the necessary qualifications or experience (77%) and increased competition from other employers (64%).
Organizations believe that a skills shortage will impact several areas, including productivity, employee engagement, growth and expansion plans, employee turnover, revenue and profit, and customer service.
Anticipating a “Skills Recession”
According to the report, Australian employers are bracing themselves for a “skills recession”. This situation occurs when there is a persistent shortage of skilled workers that can lead to declining productivity, prolonged talent gaps, increased competition, and low economic growth.
The CEO of Hays Asia Pacific, Matthew Dickason, called for proactive measures to address this issue. He stated, “We need to proactively address the issue now and for the longer-term health of our economy.
In conclusion, the “skills recession” in Australia is a significant challenge for organizations, with many struggling to attract and retain highly skilled professionals. To overcome this challenge, employers are offering higher-than-planned salaries, upskilling their staff, and considering employing and sponsoring overseas candidates.