ONE-THIRD OF Australian companies are having difficultly filling permanent professional roles due to a lack of available talent, which in turn is threatening growth plans and inflating wages.
A recent study found 38 per cent of Australian employers are offering higher compensation to attract and retain qualified candidates.
In contrast to the global average (25 per cent), Australian companies have seen a significantly greater increase in wages due to talent shortages, while 55 per cent of Singaporean employers have increased compensation to ensure quality professional candidates.
“Competition for talent is heating up and many employers are being forced to offer higher compensation to meet their business needs, or simply put those needs on hold,”said Stephen Hinch, chief marketing officer, Australia & New Zealand for Manpower, which conducted the study.
“Because some companies chose to put their hiring on hold or simply cannot find the staff they need, there is a dual impact. On the one hand, their business outcomes may well be impacted, and on the other hand, their current workers will need to carry the extra workload leaving them open to just changing jobs.”
The study of 32,000 employers across 26 countries (including more than 3,000 Australian employers) found a distinct correlation between the talent shortages in each state and the subsequent need to inflate compensation.
Fifty-two per cent of West Australian employers have had to increase salaries to secure skilled professional candidates due to severe talent shortages.
The study also pointed to a critical shortage in public administration and education, with 41 per cent of employers in this industry reporting they would have hired more staff if they could just find them.
Similarly, wage inflation is greatest in the public administration and education, finance, insurance, real estate, mining and construction sectors, with more than 44 per cent of employers paying higher compensation for professional positions compared to the previous year. These sectors are also experiencing the greatest talent deficit.
“The future for the skills shortage and upward pressure on wages will only be diminished if HR managers and industry leaders start now to develop a workplace culture that embraces older workers and encourages them to remain at work,” said Hinch.
“A shortage of any kind can be addressed in two ways: by reducing the demand and/or increasing the supply. In this scenario, facing the increasing talent shortage may well mean that employers need to reduce the numbers of jobs for which talent is in short supply and/or tap into previously untapped potential and in doing so increase the total available pool of employable talent.”