Today’s briefing is for all Tenfold clients because it covers a topic that is highly relevant to all your businesses.
With the current labour shortage likely to continue well into 2022 and beyond, we can expect that this will be the biggest challenge for all Australian businesses for some time to come.
In today’s brief, I’ll show you 3 graphs that explain the situation we’re in. My aim is to help you understand why team recruitment and retention are so important for the next 3 years.
Graph 1: Immigration levels will be very slow to recover
Australia has traditionally relied on immigration to supply skilled workers to fill holes in workforce. This has ensured that there is a reasonable level of labour supply and competition for the available jobs.
In 2020 and 2021, Australian immigration dropped below zero as the borders closed and it declined into negative levels as people returned to their home countries during the pandemic.
As you will see from the graph below, the projection is that immigration won’t return to normal levels even by 2023. In fact, it is likely to take 5-10 years before immigration levels fully recover and make up for the shortfall in 2020 and 2021.
Even if immigration were to double in 2022 versus the level it was at from 2010 to 2019, it would still take several years just to get back to the trend we’ve had for the last 10 years. This isn’t likely to occur, and immigration is forecast to be subdued for several years. As a result, supply of labour will remain low.
Graph 2: Pent up consumer demand for products and services
The lockdowns in Victoria in 2020, and then in NSW and Victoria in 2021 have created a pent-up demand for consumption. Over this coming Christmas period, household consumption should not only return to the previous level but is likely to exceed previous levels as people become more confident stepping out and shopping.
Graph 3: Federal and state infrastructure projects coming online
The drop in immigration and the effect of pent-up consumer demand is occurring at the same time that many of the major infrastructure projects promised and planned by the state and federal governments begin to come online.
We’re already seeing these projects have a significant draw on the pool of labour resources, particularly in the skilled trades as the appeal of higher wages and more favourable working conditions are too good to pass up.
As we can see in the above graph, the demand for labour for infrastructure projects is increasing and will continue to remain high for the next 3-4 years.
Bringing it all together
Since early 2021, we’ve been highlighting this predicament. While these trends make for great economic conditions to run a small business, they also create a recruitment challenge. Many small businesses will face a real risk that they will have plenty of work, but not enough employees to complete the work.
Our role at Tenfold is to make sure that you’re ahead of other small businesses when competing for labour. Just like we’ve done previously providing you with strategies for prospecting for new work, we will bring innovative recruitment, retention and team structuring ideas to you so that you can succeed in building a team to deliver on your client promises.
Through several upcoming briefings, we’ll give you many different opportunities to get ahead of other businesses over these coming years. Keep engaging with your coach and heeding their advice when it comes to recruitment, retention and team structuring.
Ashley Thomson B.Eng. (Hons), Grad. Dip. Mgmt, MEI
Managing Director, Tenfold Business Coaching