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Highlights
- 90% of CEOs anticipate staffing shortages this year, as per Australian Industry Group's latest CEO survey.
- The unemployment rate presently rests at a historically low 3.4%.
- The Reserve Bank of Australia has increased the cash rate eight times in a row since May as a result of the tight labour market.
Treasurer Jim Chalmers believes that one of the biggest risks to the Australian economy in 2023 could be natural disasters. In the past few years, bushfires, floods, landslides, and earthquakes have disrupted livelihoods. So much so, in fiscal year 2021–2022, Australia lost over 3 billion dollars to flooding, which increased inflation. The Reserve Bank of Australia has increased the cash rate eight times in a row since May as a result of the tight labor market, which has resulted in a 3.4% unemployment rate.
A direct impact of such disruption is faced by the labour industry. Federal Labor has bragged that it has presided over the best employment growth of any new administration in 50 years, but CEOs seem worried about finding staff in 2023.
Staff shortage ahead?
A poll conducted by the Australian Industry Group revealed that 90% of CEOs anticipate staffing shortages this year. Businesses across all industries expect to be impacted. This outcome has come into picture despite the good news that more Australians have found a job in the past few months.
Consequently, CEOs wish to invest in staff training and development to develop their in-house skills base. Workforce management strategies seem to have changed from recruitment to retention and reskilling.
Recent statistics
According to data released by Australia Bureau of Statistics (ABS) in January 2023, in the three months leading up to November 2022, there were 22,700 fewer open positions, a 4.9% decline (seasonally adjusted). Social assistance and health care were the two industries that saw a decrease in job openings this quarter. Despite the decline, there were still many open positions in November 2022. The number of open positions was 94.9% more than it was in February 2020- before Covid-19 struck. The persistently high number of openings reflected the ongoing labour shortages in various sectors.
Australia labour market in 2022
According to latest seasonally adjusted data from the ABS, there were 444,000 job openings in November 2022, which is a 5% (-23,000) decrease from August.
The private sector, which typically fills about nine out of every ten job openings, was responsible for the reduction in open positions. Between August and November 2022, there were 6% fewer job openings in the private sector than there were in the public sector.
When compared to levels prior to the pandemic, business and governmental sector opportunities were roughly twice as high as they were in February 2020. (up by 96% and 89% respectively).
Several economic concerns have the potential to disturb the labour market, for instance- crisis in the Ukraine, rising interest rates, and natural disasters. Besides, China's withdrawal from zero-Covid and instability in other economies can be challenging. Amidst this, it will be interesting to witness how Australia's business leaders prepare to manage inflationary stresses, skills shortages, and supply chain disorders.
