As business coaches, the Tenfold team sits across all our clients’ businesses and also have contact with many other small businesses outside the Tenfold community. Every day, we’re hearing stories of employees resigning. Some are leaving for other offers, while others have become fatigued with COVID-19 lockdowns imposed on their industry. Many of these employees were in senior roles, were people who weren’t expected to leave or were long term and seemingly secure employees.
We know that employees leave for different reasons, and staff turnover is a normal part of business.
In normal times, it’s usually straight forward to find replacements.
But these are not normal times. Let me explain why these are the hardest conditions for resourcing staff that we’ve seen in over 10 years. But first I want to be very clear:
If you’re not taking action now, you’re already falling behind (you just haven’t realised it yet).
If you are taking action, keep going and go harder. The action you take now will be what shores up your business and puts you ahead once everyone else realises what’s happening.
The Labour Problem Explained: 3 main causes
1. Low unemployment
Australia’s unemployment rate is at the lowest it has been in 10 years.
Why this is a problem:
The number of people actively looking for work is less than we’ve experienced for a decade.
2. Labour supply is lower due to zero immigration
Australia’s immigration is near zero (as expected):
What this means:
Immigrants have tended to fill the gaps where Australians cannot be recruited to fill roles. This has moderated the labour market ensuring there is a supply of workers to match the number required by businesses.
With Australia’s closed national border and the federal government’s aversion to opening up to the world, there is very little chance of immigration increasing within the next 12 months. This means the impact of near zero immigration on the job market is going to be with us for some time.
3. Labour demand is higher
Seek ads were at the highest they’ve ever been in March 2021 – see: https://www.seek.com.au/about/news/seek-employment-report-job-ads-hit-an-all-time-high-in-march
Tenfold Business Coaching’s own proprietary research shows that the number of employers looking for employees in some key trade areas is increasing week on week; plumbing, electrical, and landscaping. In these categories we’re seeing between 60 and 90 new jobs listed EVERY week in each category in Melbourne alone. That’s 60-90 plumbing firms listing new ads for a plumber every week. There certainly aren’t 60-90 plumbers coming onto the job market in Melbourne each week!
While this is a small snapshot, we’re seeing similar results in most other Seek categories; IT consultants, salespeople, bookkeepers, customer service roles, software developers and many of the other support roles Australian businesses rely on. Each Tenfold business coach is keeping close watch on this issue.
The action you need to take to now
Back on 24 February 2021 and again on 20 May 2021, I wrote about the changes the business coach team were seeing. We did so to warn our clients and to encourage small business operators to plan ahead.
Many of the business owners we coach heard our advice and took action. They brought forward hiring decisions and rolled out pay rises to counter the market conditions. Other businesses have been slow to move on this advice and as a result they are now feeling the impact of not taking action.
If you’re in the group who is late to react to this changing labour market, please take the advice of your business coach and do the following:
- Review the wages of each of your team members. Check the current salaries being offered on Seek for similar roles to gauge the salary your employees could earn if they were to go looking for another role (or worse – if they were head hunted).
Run the numbers through your financial model with your coach to determine what, if any, pay rise you might offer them.
Once you know your numbers, start a discussion with your employees about their salary review.
We also use the Hays Salary Guide and have found this a good and reliable resource when benchmarking salaries, especially for white collar roles. If you would like a copy, contact us here.
- Map out a plan of what future hires you’ll need for the rest of 2021 and into early 2022. Most of you would have developed a future organisational chart and/or financial model with your coach. Consider how long it has previously taken to recruit this particular role, and now expect that it will take 2 or 3 times as long. Adjust the timeframe you need to allow to find and induct the right person.
- Consider each of your team members individually. Look at your business from their perspective and ask yourself what kind of employer you are to them, what work environment you provide for them and what career and training opportunities you offer to them.
If you’re not rating well in these areas, then chances are another employer may be approaching your employee with a better offer in the way of company culture, training and development and career advancement. Being strong in these factors will help ensure your team members don’t go looking for other roles or won’t be tempted by offers of higher salary.
These aren’t changes you can make over night. Get advice from your business coach to prioritise the changes that are going to have the most impact to protect your resources.
One final point. Nobody except another business owner or a business coach working with business owners really knows the challenges small businesses have faced over the last 18 months. From fears of not being allowed to operate, to panic at losing key sources of your revenue and to distress at possibly having to let team members go. Now with another series of lockdowns in Melbourne, Sydney and Brisbane the pressures are as high as they’ve ever been. However, business owners are tough – that’s why you embarked upon this self-employed path.
So please consider your team members who likely aren’t as strong as you. As employees, many of your team won’t be under the same pressure as you but they may have other pressures on their mental health. From relationship pressures at home, to financial pressures, to anxiety about catching COVID-19 and which vaccine is safe – many are struggling. One of the best investments you can make over the coming months will be to reach out to each of your team members and check in on how they’re going. If they open up to you about how they’re feeling, then that’s great. Even if they don’t, they know you care about them as a person and that counts for a lot if/when it comes time for them to decide if they stay employed with you and whether they put in their best efforts in any work-from-home situation.
Jobs Victoria Fund
While I’m on the topic of recruitment, I want to remind Melburnian and Victorian Tenfold clients and business owners of the wage subsidy available through Jobs Victoria fund. We coach many businesses in all industries who are successfully using this scheme to offset the costs of employing new staff.
I advise you to think about this scheme when you’re looking at your resource requirements to see where this scheme could support your business.
Similarly, if you have hired anyone from 16th March 2021, speak to your business mentor to see if they are eligible for you to receive Jobs Victoria funding. With amounts of $20,000 and $10,000 per employee, it’s worth looking into.
Ashley Thomson B.Eng. (Hons), Grad. Dip. Mgmt, MEI
Tenfold Business Coaching