Move comes as nearly nine in 10 organisations are suffering from a lack of talent
Higher than planned salaries are being laid out on negotiation tables as Australian employers brace for an anticipated "skills recession," according to a new report.
Three-quarters of organisations surveyed in the latest Hays Salary Guide said they have offered salaries higher than initially intended to attract skilled candidates.
Another 62% are also upskilling staff to overcome skills gaps, while 37% are considering employing or sponsoring overseas candidates.
'Skills recession' right ahead
These measures come as 88% of organisations admitted to experiencing a skills shortage, with 40% saying its impact has intensified in the past 12 months. According to the report, this shortage is driven by a lack of people with the necessary qualifications or experience (77%) and increased competition from other employers (64%).
As a result, 78% of employers believe the shortage will impact their operation and/or growth plans. Specifically, they said the effect will be hard on the following:
- Productivity (63%)
- Increased workloads for increasing staff (62%)
- Project delivery (59%)
- Growth and/or expansion plans (49%)
- Employee engagement and morale (46%)
- Employee turnover (44%)
- Revenue and profit (41%)
- Customer service (41%)
"It's clear we're heading for a skills recession as a shrinking talent pipeline threatens the effective operation and growth plans of organisations," Matthew Dickason, CEO Asia Pacific at Hays, in a media release.
And despite growing concern on the lack of skilled professionals, Dickason noted that vacancy activity is "remarkably silent."
"After normalising from last year's historic peak, today's headcount expansion plans suggest current economic uncertainty will not impact all workforces," he said.
A Robert Half study released early this year found that 75% of Australian employers plan to increase or maintain their headcount this year despite recession fears.
What can employers do?
In Australia, an overwhelming majority of employers are already planning to hike salaries by over three percent in their next review, said another Hays report. But employers should be cautious on the long-term impact of the skills shortage, which is predicted to last into the 2030s, according to Dickason.
Hays' findings should underscore the need for employers, the government, as well as educational institutions to work together to address the root causes of the shortage.
"While investing in their own strategies is crucial to remain competitive, employers must take a wider view and work together to address the skills shortage crisis," Dickason said.
"The issue of skills shortages isn't specific to one organisation or industry but is a systemic problem impacting the entire labour market. We must shift mindsets and collaborate to address skills shortages collectively."
