A Next Dimension Accounting survey of Australian businesses and not for profit organisations has confirmed trends towards a major shift in the local employment market.
The survey looked at Australian businesses representing a range of industries and sectors, including private companies and NFP organisations. The majority of respondents were employing entities.
Survey findings are reflective of the wider Australian business environment and highlight issues with understaffing, hiring plans, recruitment problems and projected pay increases.
Understaffing and jobs vacant
Half of the respondents to the Next Dimension survey indicated their business was currently understaffed and a further 20 per cent were unsure regarding staffing levels.
Understaffing is currently a key issue for Australian companies and NFPs, with persistently high Covid case numbers pushing absenteeism to levels that disrupt supply chains and essential services. The survey reflects Australian Bureau of Statistics (ABS) data that shows job vacancies climbed again to 480,000 in May 2022 – more than double the number of vacancies in February 2020, according to the Australian Bureau of Statistics. The spread of the vacancies is also noticeable, with a quarter of businesses reporting having at least one vacancy in May 2022 – more than double the pre-pandemic level (ABS).
Most respondents of the Next Dimension survey (60 per cent) indicated they are in the process of hiring more staff, confirming this encouraging trend.
In a broader sense, in July 2022 labour market insights from the National Skills Commission revealed that “25% of employers expected to increase staffing levels over the next three months.” A report on the recruitment intentions of business leaders from talent solutions provider Robert Half indicates that “More than four in five businesses (82%) are planning to hire permanent employees in 2022, with 44% of Australian employers planning to maintain headcounts and 38% of business leaders planning to expand their workforces by actively adding new positions.” (January 2022)
An overwhelming majority of the Next Dimension survey respondents (80 per cent) agreed that they are currently finding it difficult to recruit more staff. Hiring difficulties that are widely acknowledged in the business and NFP community are also relevant to the surveyed group of employers. With more Australians now in employment and the national unemployment rate dropping to 3.5% (ABS, June 2022 period) the pool of available local workers has shrunk. It has been reduced by shortages of skilled workers from overseas due to border closures during the global pandemic. Australia’s National Skills Commission found that in July 2022, “the recruitment difficulty rate increased by 8 percentage points to reach a record high of 75% of recruiting employers”.
Imminent pay rises
Survey respondents were asked to look at the next three months and the results were striking. Within 3 months, most of the businesses surveyed (70 per cent) plan to give their staff pay rises.
Real wage increases across different industries have followed the national minimum wage increasing by $40 per week, set by the Fair Work Commission [in effect from 1 July 2022; or from 1 October 2022 for workers in aviation, tourism and hospitality]. Pay rises for workers above the minimum wage are also happening now and the RBA is forecasting “a lift in wages growth from the low rates of recent years as firms compete for staff in the tight labour market.” (RBA Media Release August 2022)
How outsourced accounting services can solve the problem
As a team of experienced outsourced accountants, understanding these pressures and actively shaping our services to address client challenges is a key focus.
The benefits of engaging the Next Dimension team include:
- Rather than relying on one person our clients are supported by a team of professionals
- We implement technology so that businesses and NFPs can make decisions by accessing and monitoring their financial position in real time
- Our costs are fixed for the term of our client’s contract
Get in touch with us to find out more.