Is this the beginning of the end of talent shortages?

Seek has released its monthly employment report for September. With job listings dropping and applications rising, one would think this might be the end to the talent shortage crisis. According to the experts we spoke to, it’s not that simple.

Job postings down

September saw a decrease in jobs posted, down 5.2 per cent from August, the largest monthly drop in the past year. Each state in the country saw a drop, with the Northern Territory having the most significant one at 7.5 per cent. NSW was down 4.1 per cent and VIC was down 4.9 per cent.

Managing director of Seek ANZ, Kendra Banks said: “The unexpected national public holiday had an impact on hiring activity in September. Since May, there have been small declines in ad numbers, but not enough to call an end to the incredibly tight market. All sectors are still at higher job ad volumes than they were pre-pandemic.”

She continued: “Over the past two years, seasonal trends have been superseded by the impacts of the pandemic, and although we are no longer dealing with lockdowns restricting hiring habits, the consistently tight labour market, paired with increasing economic pressures, means this year has been, and continues to be, an atypical year for the job market.”

“Pre-pandemic, what we would expect to see from August to October is a pickup in hiring for certain industries, particularly those in retail and consumer services and hospitality and tourism ahead of the busy holiday season. While we know that demand for staff is greatly outweighing supply for many businesses in these industries, we have not yet seen the usual upward trend in hiring ahead of the end of the year,” said Ms Banks.

Compared to September 2021, there were 15.5 per cent more jobs advertised in Australia. NSW recorded a significant increase with 21.8 per cent more than September 2021.

General manager at TQ Solutions, Nadine O’Regan commented on the Seek report for HR Leader: “The fact that job ads remain well above the same period last year means that open requisitions are high, recruiters can’t fill roles - proof that Australia’s talent shortage is among the worst in the world with 19 per cent of all assessed occupations in Australia in shortage, 81 per cent of workers are burned out, and 38 per cent of them are planning on leaving their employer within the next year. Yet despite this confusion, businesses are doing well.”

Job applications up

All states recorded a rise in applications per job in September. There were 10.3 per cent more applications per job ad between July and August, the biggest rise since April 2020. Tasmania had the highest rise in applications per job in September, with 18 per cent more than August.

Commenting on the Seek findings, regional director of Hays, Eliza Kirkby told the HR Leader: “An interesting finding is the increase in applications per job ad over the last month. This suggests that skilled professionals are prepared to explore their options elsewhere if their current employer doesn’t offer the salary, benefits or flexibility they ideally want. A swift recruitment process is also vital, since good candidates are not on the market for long, no matter how attractive your opportunity is.”

Ms Kirkby continued: “Flexibility is essential. Job candidates are not responding well to return-to-office mandates. In contrast, employers who offer an adaptive hybrid model are using it effectively to attract, engage and retain professionals from competitors who do not offer flexibility around in-office and home working days.”

Ms O’Regan told HR Leader: “There was always going to be a post COVID-19 correction – I guess the question now is how big will the correction be and whether or not it will spiral into a recession. How significant external factors play out will have an impact - whether rising interest rates in the US tip it into recession and how far inflation continues to rise in the UK and Europe.”

Top jobs posted

The Seek data also included the top industries by job ad volume. Trades and services are most popular, followed by healthcare and medical, and hospitality and tourism. While each of the 10 industries listed in the top list had less job advertisements compared to August, most were much higher than September 2021, with hospitality and tourism up 60.4 per cent in the past year. Information, communication and technology was the only industry on the top 10 list to see a decrease in the last year with job ads down 15.6 per cent.

Ms Kirkby said: “The longer-term data suggests that skills shortages have become more acute over the past year. According to our latest Hays Salary Guide, 91 per cent of employers are experiencing a skills shortage. Further, the National Skills Commission’s Internet Vacancy Index shows that over the last twelve months job advertisements have increased by 19.7 per cent, while Seek’s data shows job ads are up 15.5 per cent over the year.”

Labour shortages

As recently covered by HR Leader, the 2022 Skills Priority List Key Findings Report was released on 6 October. The study revealed the jobs that are most experiencing labour shortages.

In concluding her comments on the Seek report, Ms O’Regan added: “I really hope that Australia is spared a significant downturn, however this is an uncertain period and it will continue for some time. I’m not sure we’ll see significant job loss, but we will see vacancy loss continue throughout 2023 and SEEK’s September figures are proof of this emerging trend.”

“All TA leaders need to be prepared for the uncertainty that is ahead. The war for talent will continue, especially in the most impacted sectors, like healthcare, hospitality, transport, aged care, and early childhood services. Companies have to put talent needs at the centre of their business strategy if they are going to be able to compete this year and beyond. Those that did this prior to COVID-19 are the companies that are managing these current changes well, but the businesses that make this transition now will benefit too,” explained Ms O’Regan.

Jack Campbell

Jack is the editor at HR Leader.