blog.ployme.com.au

Shocking trends in the Australian labour force.

We all know there is a skills shortage, we hear it in the news every day. The next bombshell we are about to face is simply a people shortage.

In March 2008 the National Australia Bank small business quarterly survey found that 72% of business said that their growth is being limited by difficulty in hiring employees, this was 65% in September last year. Glenn Stevens the governor of the Reserve Bank of Australia recently revealed that their business survey showed that staff shortages is now the number one concern for businesses in Australia and it is limiting their ability to grow.

The difficulty in having enough workers is a product of many factors all coming to ahead at one point in time. From a numbers perspective, Australia’s working population generally grows by around 166,000 people per year. Trends currently in place will see a rapid decline in the growth of new people entering the workforce by 2010. By the decade commencing 2020 it is predicted that the total number of new people entering the workforce will be less than 199,000. That is less than 13% of what we currently have each year.

Compounding this is an ageing population brought about by a decrease in our birth rates. At a recent conference with the Queensland Tourism Industry Council Dr Heather Pearce shared with me that businesses will start to see the major impact of our people shortage in 2010 as a result of the birth control pill. In 1961 the birth control pill was introduced in Australia and for the first time ever women gained the freedom to choose to delay or forgo child birth. Not surprisingly Australia’s fertility rates have declined from 3.6 in 1960 to 1.7 in 1997. In 2005 we saw a small increase in the fertility rate to 1.77 which is still below the repopulation target of 2.1.

Adding to the pressure of an aging population and declining birth rates is the impact of new industries. The impact of IT, biomedicine and other industries which did not exist 30 years ago at any significant level are now impacting the labour pool draining precious resource from traditional industries such as hospitality.

Growth in sectors like mining and construction are also causing significant impact. In the last 20 years the Australian Bureau of Statistics reported the number of workers in the construction industry grew from 500,000 to 1 million. 

More than ever employee retention will become paramount and businesses will need to break with old habits and find new ways of retaining employees. It will also become important for businesses to keep the doors open for past employees to return as the cost of training new employees is already a burden on employers.

To survive the years ahead, business will need to develop new systems, processes and adopt new technologies to deal with the people shortage. ANA hotels are already changing their cooking processes and technologies. They have introduced the knife less kitchen that reduces the need for trained chefs and focuses on the use of food process workers. They are even adapting in room dining to a high quality takeaway style service, where the guest receive their in room dining in disposable containers. This reduces the need for workers to return to the room to collect crockery. ANA are definitely one of the many savvy operators to watch in the upcoming years.