How to combat labour shortages in 2023

Employers focus on immigration, flexibility, work-life balance

How to combat labour shortages in 2023

Australia’s labour shortage is expected to continue in 2023 with employers not expecting a great shift in available talent in the forthcoming year.

With Australia’s unemployment rate at 3.4% — and expected to stay at around that level for the vast majority of 2023 — many employers are not confident that they will be able to fulfil jobs.

Options such as recruiting overseas, allowing more flexibility for employees, as well as searching nation-wide for the best talent, are all being utilised.

Covax Australia is pushing for an increase in skilled migration from overseas, according to Covax Australia co-founder, Dr Anuj Gupta — specifically India and the Philippines who produce a large number of trained nurses.

“We need a review of immigration regulation to ensure we can bring in the minimum 5,000 workers per month needed to give older Australians the care they deserve,” he said.

The Brisbane-based company focuses on solving labour shortages in healthcare, hospitality, security, human resources and environmental services sectors.

Shortfall of 200,000 workers

A report commissioned by the former Commonwealth Government revealed that Australia faces a shortfall of almost 200,000 workers by 2050.

“We are pushing for more flexible working arrangements,” Dr Gupta said. “Our staff in health and aged care are not afforded the same flexibility with split shifts and working smaller hours as those in hospitality. It will allow us to engage with more women to join work in aged care and the growing number of vacant positions in the sector.

“The shortages in aged care are not going to be resolved in the short term, which is why we offer significantly higher wages than the industry standard to entice health professionals from other sectors into aged care.

The logistics that are required to bring in thousands of staff per month interstate and overseas are significant and complex, he said.

“We are working with stakeholders to set up temporary housing for overseas workers to future-proof a talent pipeline that will ensure that we are constantly filling vacancies and have the infrastructure necessary to do so over the next decade.”

Underemployment is also the lowest it has been since just before the global financial crisis, in August 2008, at 5.9 per cent.

Combining the unemployed with the underemployed, the under-utilisation rate fell to 9.3 per cent, its lowest level since March 1982. 

Retaining skilled talent

Employers are turning to different methods to cope with the labour shortage, according to Jonathan Perumal, country manager, ANZ at Safeguard Global.

“One key focus is retaining the existing skilled talent an employer has; the other is to open their recruitment to a global talent pool,” he said.

“Coming out of the pandemic, two new realities emerged: Firstly, employees are being more forthright in what they expect from an employer. The employers that are coping well are those adapting their hiring process and policies to meet new expectations around ways of working;

Secondly, fully distributed workforce can be as innovative and productive as companies need them to be – this means, there’s an opportunity for employers. No longer must they only consider candidates in their local region – the actual potential pool of candidates is global.”

Other initiatives from HR leaders include digital nomad programs, stay interviews, upskilling opportunities and flexible working hours, said Perumal.

Permanent migration

The Commonwealth Government has lifted its permanent migration program from 160,000 to 195,000 in 2022-23. Net overseas migration is increasing from 150,000 in 2020-21 to 235,000 in 2023-24.

“The successful companies who are attracting employees with the desired skilled sets are those offering more flexible working conditions, such as accommodating employees preferred working hours and location,” Perumal said.

“To find the best talent for the role, companies shouldn’t be confined to the country’s border.”

In New South Wales, some government departments have now been given permission to search Australia-wide for talent to find the right candidates to fill the role.

Work-life balance

Research shows there are higher levels of burnout in Australia compared with other countries, with 62% of employees and 66% of managers reporting they feel burnt out at work, compared with a global average of 48% and 53%, according to Microsoft’s latest Work Trends Index, Perumal added.

“Many employers are therefore focusing on the health and wellbeing of their employees, tailoring policies to provide a better work/life balance.

For example, four-day work weeks are being introduced across the world and trialled in Australia and New Zealand, he said.

Unilever, a multinational consumer goods company, has successfully trialled a four-day working week in New Zealand and is now conducting a one-year experiment  in Australia. There is also a six-month pilot currently happening with 20 companies across Australia and New Zealand, with the results looking ‘very encouraging’ so far.”

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