Australian businesses suffering through second-worst skills crisis in developed world, OECD says

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Australian businesses are languishing through the second-most severe labour shortage in the developed world, as nearly 3% of all jobs in Australia remained empty in the March quarter.

It’s the finding of the Organisation for Economic Co-operation and Development’s (OECD) latest economic outlook, which said we are second only to Canada in the labour crisis.

On Wednesday the Australian Bureau of Statistics (ABS) revealed that some 420,000 jobs are waiting to be filled within more than 15 million total positions in Australia, meaning 2.8% of the labour market — or one in 35 jobs — are empty.

Indeed job vacancies increased by 4.6% between the start of January and the end of March, the ABS continued, which far outpaced the growth rate (up 0.6%) and jobs filled (up 0.4%).

Industries bearing the brunt of the shortages are mining, financial and insurance services, administrative support, and wholesale trade.

Agriculture Minister Murray Watt acknowledged the crisis yesterday, promising that the labour and skills shortage would be a top priority for his new portfolio and that he was “up for any ideas” about how to fix it.

And yet the Great Resignation — or perhaps more accurately, the Great Reshuffle — has caused an extra headache for businesses as the ABS showed 1.3 million people, or one in 10 employed people, changed jobs in 2021-22.

It’s the highest job mobility rate in a decade.

Management consultancy ASPL Group CEO Kris Grant says staff retention should be one of the top priorities at the moment for business, and there are five things they should act on now.

First, Grant says, management must create a work environment where there can be an open dialogue with staff. This allows grievances to be aired (and solutions to be sought), but it also ensures a staff member feels valued in the business.

“When employees feel like their bosses are listening to them and value their opinion, everyone benefits,” she said.

“If employees feel valued, they are likely to work harder for the bosses and contribute to an organisation.

“But if managers don’t listen to them or value their opinion, the risk is they will start looking elsewhere for better employment conditions.”

Grant continues that fostering an inclusive workplace culture where activities, awards, and events cater to all staff — including the remote or hybrid ones — will make a happier, more productive environment nearly inevitable.

“If your workplace only rewards a person of a particular type, and excludes others, then those who aren’t included will soon walk away from their jobs, leaving the top dog without key support.”

To that end, Grant continues, offering flexible working arrangements works, and it should be on offer at least part of the time.

“Workers who feel their employers offer enough flexible options are 2.6 times more likely to be happy in their jobs, according to LinkedIn,” she said.

“Allowing flexibility encourages goodwill, which works both ways, encouraging your employees to stay in your organisation.”

Significantly, Grant says businesses should give a lot of thought to their onboarding experience to wow new recruits to make them feel ingratiated — fast.

“The battle to retain staff begins on day one with effective onboarding,” she said.

“Integrating workers into their positions, their team and the company’s culture is critical [so] make new hires feel welcome and understand why they are there. Done well, onboarding enhances retention.”

And finally, investing in the learning and development of existing staff not only makes them more valuable to the business, but helps foster loyalty and goodwill.

“LinkedIn research shows that 94% of employees said they would stay at a company longer if they were offered more learning opportunities,” Grant said.

“Investing in your staff has real payback for your organisation, and is another key strategy to retaining your staff.”

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Stuart Carr
Stuart Carr
16 days ago

Emma, lets be clear it a manpower shortage. Training would just shift the problem as the deficiency covers unskilled, trades, professional.

I know of at least 50 businesses looking for staff in all categories.

Tim Allman
Tim Allman
16 days ago

Interesting article, however it fails to address the fundamental issue that every industry has a labour shortage. In my business I travel to meet clients predominantly in the food manufacturing space but also as an auditor and from the time I park my car at an airport carpark to the time I pick it up again every interaction that I have with a business be it airline, lounge, hire car, hotel, cafe or restaurant, bar or retail everyone is short staffed.
While smart businesses are already addressing retention policies they cannot find staff and in regional areas it is even worse.
The burning question is where will the labour come from?

Phillip
Phillip
4 days ago

The business I work for refused to put me on full time after working for the last 10 months full time on contract from an agency with little to no training. The reason given was they wanted 2 people who don’t know their clients, on 3 days a week on a rotating roster rather than 1 full time who they knew would always be available. 2 people on 3 days a week may provide flexibility for the business and I understand that but what about the employees who need to pay their bills.

Last edited 4 days ago by Phillip
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