Ed Milne on the curious case of Australia’s labour market


2021 has provided significant labour market challenges, including candidate shortages in unexpected areas. Unemployment rates are falling and there are visible signs of economic recovery, however many employers are struggling to fill roles. In this episode of the Work Conversations podcast, founding Director of the Bayside Group John Wilson and Manager of Workforce Planning and Training Solutions, Ed Milne, discuss some of the factors driving this perceived tight labour market, and how employers can effectively respond.

When we look at the labour market nationally, unemployment is reasonably high, however this isn’t correlating with the low application numbers. According to data from SEEK, job ads are continuing to rise, however application numbers are down by 15 percent compared to this time last year. Ed cites a recent survey by those on the JobSeeker initiative, with roughly 50 percent not currently looking at job boards. These are people who would normally be available to employers within the job market.

What’s particularly unique about this situation too, Ed says, is that it isn’t just occurring within a specific industry or skillset. Instead, it is being experienced across a wide variety of industries, from hospitality and health to engineering and science, in high-density cities across the country.

There are varied and complex reasons for why this could be. The first Ed describes is the unintended consequences of these government incentives, like JobKeeper and JobSeeker. Though this financial support was necessary during this challenging time, it appears it has resulted in reduced participation within the Australian labour market. The JobSeeker payment has also provided those individuals who were in more entry-level roles with a financial safety net that they are now hesitant to let go of while there is still uncertainty.

Workforce mobility has also significantly impacted on people’s willingness to seek out and move jobs. With border closures and travel restrictions in place, Ed suggests that people are hesitant to risk relocating for work when uncertainty is still so pervasive. This is particularly impacting Australia’s rural and regional communities, which have seen a huge downturn in workforce availability, also due to international travel restrictions.

Other factors impacting the state of the job market appear to be flexibility, with people now accustomed to working from home, as well as mental health issues resulting from lockdown and reduced movement due to greater risk aversion.

What is particularly interesting to note is the differences between what is occurring in the US job market and Australia’s. Both countries’ unemployment rates skyrocketed last year, but what’s remarkable, Ed says, is how the US labour market has recovered at a much faster rate, despite their significantly higher number of COVID-19 cases and associated deaths. This could be due to Australia’s border closures, which were quite unique to Australia, coupled with our government’s safety net initiatives and strident lockdown response.

When it comes to what employers can do to aid in their recruitment efforts during this curious time, employers will need to stand out from the crowd in order to build a pipeline of applicants. They can do this by identifying the factors that are stopping individuals from applying to work with their organisation, and understanding what they can leverage to help mitigate the risk for someone looking for employment.

Traditionally, businesses will increase advertising or put incentives in place to attract and retain people, but Ed says that attraction is only the first challenge. Once you have access to a pipeline of talent, the next step is to find and retain the skill set needed to grow the business. All of this in the current climate is not an easy task, and employers should consider consulting with and seeking advice from recruitment specialists who understand the challenges. This insight can prove invaluable when it comes to building an applicant pool, and retaining the skilled professionals required by their business.

If you’re experiencing challenges in accessing skilled candidates, click here to book a market insights presentation and confidential discussion with one of the Bayside Group’s senior leaders.

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