- One in four Australian businesses say they’re struggling to find suitable staff to fill job vacancies, according to newly-released ABS data.
- The survey of business conditions points to increased wage pressures that could lead to faster growth than that projected by the Reserve Bank of Australia (RBA).
- The central bank is forecasting wages growth to be 2% by June 2022, but Commonwealth Bank economists suggest it could hit 2.7% by the end of next year.
- Visit Business Insider Australia’s homepage for more stories.
More than a quarter of businesses are struggling to find the right staff, and one in five say they don’t have enough, adding to growing evidence the labour market is tightening.
ABS data covering business conditions for June found that 27% of businesses reported having difficulty finding suitable staff to fill jobs, and almost one in five said they did not have enough staff based on their current operations.
There has also been a 60% increase in the number of businesses reporting they cannot find staff over the past three months, the data shows, with around one in four businesses saying they wanted to try to hire more workers within the next three months.
The figures suggest Australian businesses are being increasingly squeezed by stalled immigration of skilled migrants, a factor that many experts say will hurt Australia’s competitiveness in the long-term.
Accommodation and hospitality businesses are experiencing the greatest level of difficulty finding suitable staff, with 38% reporting they couldn’t find people with the right qualifications for open jobs.
This was followed by 37% of utility services, 36% of other services including repair, maintenance and hairdressers, 35% of manufacturing companies, as well as 32% of the construction sector.
The most common reason, reported by almost three in four businesses, was a lack of applicants. This was followed by 66% of respondents who said applicants did not have the required skills.
The latest business survey follows a strong labour force report in May, with the economy creating 115,193 new jobs last month, dropping the jobless rate from 5.5% in April to 5.1% in May, well ahead of official forecasts.
Both the manufacturing and construction sectors added 11,000 jobs, while accommodation and hospitality added more than 33,000 workers.
Stephen Halmarick, chief economist at the Commonwealth Bank (CBA), said he thought the latest ABS figures would be higher, speaking at a Committee for Economic Development of Australia conference on Thursday.
Halmarick echoed the perspective of many experts who have predicted that as Australia enters a second year of closed borders, we will begin to see the negative impact on businesses.
“We’re seeing the impact of skills shortages on businesses now, and that’s only going to get worse as the next year goes by, before the international borders open,” he said.
Halmarick said CBA was seeing evidence of increased wage pressures.
“Some businesses I’ve spoken to [are] telling me already they’re operating their business at 70% capacity because they can’t get enough labour,” he said.
“That’s pretty remarkable given what we’ve experienced for the last year.”
Halmarick said the evidence suggested wage growth would accelerate faster than Reserve Bank of Australia (RBA) projections, putting it at 2.7%, or even slightly higher, by the end of next year.
The central bank is forecasting wages growth to be 2% by June 2022, jumping to 2.25% by June 2023, and has stated it will wait for wage growth to rise above 3% and inflation between 2-3% before normalising monetary policy and lifting interest rates.
This week the Commonwealth Bank joined a chorus of major lenders predicting the central bank is likely to bump interest rates above 0.10% before its stated 2024 target.
Australia fighting for talent as border closure persists
While the ABS data highlights the service industries as those being squeezed the hardest by a lack of suitable talent, reports are also emerging that Australia’s technology sector is struggling to fill open roles and find talent.
Experts in the space told Business Insider Australia that the halt of skilled migration had left businesses seeking tech talent scrambling to fill roles.
“The border closures are preventing top talent from entering our markets so everyone is fighting for a minute amount of local talent,” businessman and rich lister Nick Bell told Business Insider Australia.
Chris Tilling, a financial services digital consultant told Business Insider Australia the lack of talent could have long-term implications for business growth.
“The challenge we have is that if we don’t open up then we could end up lower down the white collar food chain [globally],” Tilling said.
Su McCluskey, commissioner on National COVID-19 Commission Advisory Board, told The Australian severe skills shortages were unlikely to ease until the international border reopened to overseas workers.
“There is no other way but for immigration in the longer term for us to be able to address that shortage,” McCluskey said.
Analysis of employment data by the Commonwealth Bank suggests while employment for Australian residents has returned to pre-COVID-19 levels, employment was still down 2.1% in the first three months of 2021 when factoring in the absence of more than 280,000 non-resident workers.