Recruitment & Hiring

Skills shortage hurting business, survey reveals, but soft conditions suggest hiring remains muted

Patrick Stafford /

Businesses may be struggling over skills shortages but experts suggest employment conditions are still soft with employers reluctant to hire as international economic turmoil continues to pressure the domestic economy.

The comments come after the release of the Bankwest Skills Shortages survey, which found that two in five Australian businesses are finding it difficult to recruit new staff.

Forty one per cent of the survey’s respondents said it’s taking more than three months longer to recruit staff than it did a year ago.

However, the latest figures from NAB’s business surveys show that employment conditions are still flat. In the bank’s latest monthly business survey, the index for employment rose just one point to one, after remaining at zero during February.

Economist Alexandra Knight told SmartCompany this morning employment conditions are definitely soft.

“There has been a pick-up in conditions, but that’s probably been driven more by trading conditions rather than employment,” she says.

“It’s hard to read, but I think if you look at the trend data, you have around 6,500 jobs being created every month. That’s fairly soft, and people are just holding off on hiring.”

“Perhaps they’re just waiting to see if things wait out and the global economy gets any better.”

Bankwest economist Allan Langford told SmartCompany the disconnect between complaints over skills shortages and the actual hiring movements by employers “suggests the two-speed economy is really at hand”.

However, the survey suggests businesses are at least complaining about the ability to find staff. And more businesses are using tactics to find the best workers, with 47% increasing basic pay, and 25% offering additional financial incentives and benefits. Just under 50% are also promoting new conditions, such as flexible working hours.

The trend is higher in Western Australia, with 63.4% offering higher salaries to attract staff.

However, it’s the East Coast that is feeling a lot of the pain, with more than 70% of respondents saying they are currently looking to hire or have hired staff in the last 12 months, and 45% said they had difficulty filling job vacancies during that period.

All of this searching is having a bad impact on business, with 66% of businesses reporting an increase in overtime from existing workers to get all the work done.

And 33% say they are delivering products or services late because of the skills gap.

Langford says it’s clear that based on the differences between states in the results, the multi-speed economy is having an impact on how businesses hire staff.

“Particularly for any businesses that are relying on foreign workers, or in tourism with the higher dollar, that’s having an impact.”

“The two speed economy is alive and well, and you’re getting some indications from the RBA that they’re not dismissing some concerns quite as freely as they had in the past.”

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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