Nearly half of employees are experiencing recruiting difficulties: report

Nearly half of employers are experiencing recruiting difficulties as the talent and skills crisis continues to impact leaders in Australia, according to a new report. 

The Australian HR Institute's inaugural quarterly report noted that 69 percent of leaders are looking to hire in the June quarter this year.

These hiring struggles were exacerbated by three key factors, a lack of suitable candidates, high salary expectations and too much competition from rival companies.

Sarah McCann-Bartlett, CEO, AHRI said the Australian jobs market remains tight but doesn’t seem to be driving real wage inflation.

“What remains to be seen is whether this anticipated growth in employment is largely due to filling a backlog of job vacancies or evidence of jobs growth that will continue to put pressure on recruitment difficulties and, possibly, wages,” she said.

“Despite the recent pattern of falling vacancies since the middle of last year, vacancies remain very high, which is reflected in the fact that almost half of employers that are hiring are still reporting difficulties with filling vacancies.”

The report found that 16 percent of employers are planning redundancies in the June quarter.

McCann-Bartlett said the low redundancy numbers may be surprising finding given projections for lower economic growth in 2023 and a pattern of falling job vacancies since mid-2022.

She said, “However, job vacancies remain high and it’s possible that the relatively strong employment intentions balance is due to a ‘recruitment catch-up’ – that is, employers are now filling vacancies that they previously struggled to fill.”

The report data also suggests that positive recruitment conditions are not putting strong upward pressure on wages with employers saying that the mean basic pay increase in their organisations (excluding bonuses) is expected to be up 3.3 percent in the 12 months to April 2024.

Public sector employers’ pay expectations are higher, up 4.4 percent than in the private sector (3.2 percent) and the not-for-profit (2.2 percent) sectors.

McCann-Bartlett said the data offers mixed signals to employers and policymakers who will be concerned about possible inflationary pressures that strong employment intentions might cause.

She said, “However, there is no sign yet of increasing pay inflation in the survey data.”

AHRI’s Quarterly Australian Work Outlook is a quarterly survey report of employers that offers an early indication of future changes to the Australian labour market, including net employment balance, recruitment and redundancy intentions for the next three months, current labour turnover rates and wage growth for the year ahead.