A new survey finds that a severe skills shortage is likely to take up business owners’ talent management agendas in 2022.
According to recent Robert Half research, more than half (54 per cent) of Australian business leaders believe that finding qualified employees in 2022 will be more difficult than pre-pandemic conditions. This figure rises to 63 per cent among CIOs.
“2022 promises to be a strong year for Australia’s labour market as businesses translate short-term recovery efforts into sustained growth opportunities. Despite the demand for new talent to fulfil these growth strategies, skills shortages will continue to frame talent management agendas,” warns Nicole Gorton, Director Robert Half.
The fierce talent competition has put job seekers in control, and they’re using their bargaining power to demand better remuneration and benefits packages.
“This reaffirms the need for Australian businesses to shore up their attraction and retention strategies to strengthen their domestic talent supply, as well as investing in skills development to address skills gaps over the long-term.”
“Even with the gradual return of international migration this year, the shortfall of skilled talent entering the market over the past two years will take at least the same amount of time to recover, if not more,” he says.
Severe skills deficit in the market
With rising demand for technical skills and a decrease in the flow of foreign talent, 2021 was one of the most challenging hiring years for Australian businesses and the severe skills shortage that has crippled Australia’s labour market recovery will continue.
As employers compete for applicants in a candidate-led market, attracting technically skilled talent and meeting the rising salary expectations of jobseekers who have found themselves with greater bargaining power are seen as the top hiring priorities for the coming year.
“Talent competition is strong, and professionals with in-demand skills are aware of the hiring market challenges and the bargaining power this gives them – particularly with regards to salary,” says Gorton.
“Companies are increasingly turning to poach talent from the competition to tap into a broader talent pool, and many are receiving multiple job offers with generous salary increases, bespoke benefit packages, and title changes.”
Stephen Tuffley, Sales and Service Director at SEEK, says that he expects to see activity in both ads and applications this year.
“Looking at the first ten days of 2022, there have been more jobs posted to the site than in the same period in the past three years,” he says.
When asked what their biggest hiring challenge will be in 2022, nearly four in ten (39 per cent) Australian business leaders say it will be meeting candidates’ salary expectations, closely followed by reskilling/upskilling existing employees (36 per cent) and finding candidates with the right technical skills (36 per cent).
“With more opportunities and enticing packages on offer, employers will need to benchmark their salaries to maintain their remuneration at or above market rates or they risk losing their preferred candidates to competing offers – particularly for select roles that can adapt business operations or drive revenue-generating initiatives,” Gorton explains.
“This primarily includes technology roles in data management, software development, and cyber-security as well as financial accountants and financial analysis roles within finance. To assist with mounting hiring and talent management pressures, HR business partners and talent acquisition managers are also in high demand.”
“Alongside remuneration, sign-on bonuses, opportunities for advancement and concrete efforts to support employee work-life balance through hybrid working will also distinguish employers of choice in the war for talent this year,” concludes Gorton.
Business confidence feeding hiring activity
The strength of Australia’s economic recovery, combined with the emergence of a globally competitive tech sector, which is now the country’s third-largest economic contributor after mining and finance, has created a fertile environment for Australian businesses to pursue ambitious growth agendas.
Of the 71 per cent of Australian business leaders who feel somewhat very confident about their growth prospects compared to 2021, expanding business opportunities (63 per cent), a better economic situation (61 per cent), and successful restructuring (55 per cent) are cited as the top influences on increasing growth prospects in 2022.
Building on this confidence, more than four in five businesses (82 per cent) plan to hire permanent employees in 2022, with 44 per cent of Australian employers maintaining headcounts and 38 per cent of business leaders actively adding new positions.
In contrast, slightly more than one in ten (13 per cent) Australian businesses plan to freeze headcounts entirely, with an even lower percentage (5 per cent) planning to reduce workforce numbers.
About the research
The annual study was developed by Robert Half. It was conducted online in November – December 2021 by an independent research company, surveying 300 hiring managers from companies across Australia, including 100 CFOs and 100 CIOs.