The Staff-pocolypse: Real or Imagined?
If you’ve been watching the news lately, you’ll be aware of the doom-and-gloom status of Australian businesses. Tales of empty shelves, closing businesses and even ambulance shortages have filled the daily bulletin, and it seems to only be getting worse.
The reason for this downfall can be blamed in part, or in full, on massive staff shortages – aka. ‘The Staff-pocolypse’.
I won’t go into too much detail or repeat what mainstream media has stated already. But what I want to focus on today is why this is happening, and what you can do to protect your business.
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Current Trends
As Managing Director at Melbourne HR, I have access to the inner workings of many different businesses across many different industries. This means I also have insight into staffing and the trends that are surfacing. So, what are we seeing?
Is the news exaggerating the staff shortage numbers?
Unfortunately, no. Extreme staff shortages are very real, and they ‘cut’ very deep across the small and medium enterprise sector. This is having a profound impact on the economy as a whole, with significant impacts on the supply chain and hospitality industry.
How long will these shortages go on for? A year? A quarter? A month?
The short answers is, likely a month or maybe two. But to understand why this is, we need to first understand the moving parts of the labour market.
Pressures on the Labour Market
The current labour market situation can be attributed to several key forces at play, some of which are long-term pressures and short-term shocks to the system. These factors have aligned to create the situation we are in now.
Long-term pressures:
General labour market shortage: This has been building for a while and has impacted various industries differently. Several causes of this shortage include:
Lack of migration
A preference towards experienced workers, and
A highly cautious candidate market (i.e., people will not leave their jobs)
Businesses are still trying to recover from steep staff cuts made in 2020.
The Government economic stimulus driving the economy, which in turn promoted its constituent companies into a period of significant growth, exacerbating the above problem.
Huge backlogs of leave, caused by employees hoarding their leave through the pandemic.
'The Great Resignation'. I want to be clear that this is not a real thing. The data and quantity of resignations does not support this by any means. Having said that, there is an issue with many Baby Boomers retiring, thereby reducing a significant segment of the experienced workforce – this is the exact segment of the workforce that companies want to hire most.
Short-term shocks:
Christmas/New Year leave period creating a reduced workforce (this is the Christmas/New Year skeleton staffing problem which happens each year).
Companies making the decision to tackle the above ‘leave backlog’ issue over this holiday period, thereby exacerbating the above problem.
Staff going to social events over this particularly active social period, massively increasing the probability of being a close contact or contracting Covid.
An overloaded Covid testing system, creating long delays in testing results and further reducing the staffing pool by quarantining healthy workers.
Omnicron, a more transmissible version of Covid, has surfaced and spread quickly during the social season.
So what does our future labour market look like?
I predict that in a month or two, we will be roughly back to where we were in November 2021. That is, we will still have these problems, but the problems won’t be affected by the ‘short-term shocks’ we are experiencing now.
What can I do to protect my business?
Unfortunately, this is a very difficult situation for Australian businesses and there is no easy solution. However, there are some strategies you can use to strengthen your defence:
1. Hire young people
These isn’t a shortage of young people ready to be hired, and they are currently very under-employed. Whilst in late 2021 this younger generation may not have wanted to work in hospitality, or may not have been interested in working during the Christmas/new year period, it’s common for this to change in January as many start to look for their first proper job.
If you are willing to put in the time to train, hiring younger staff is a great solution for any employment gaps (read: The Ultimate Guide to Recruiting for SMEs).
2. Temporary Redeployment
Consider if there are any staff members you can move to under-resourced areas. For example, we currently have clients who are moving their office-based staff to help in temporary roles in warehouses. If you can, try to redeploy support staff to front-facing roles.
Above all else, I can suggest you look for alternatives wherever possible and prioritise your product/service producing work.
The last two years have been incredibly tough for Australian businesses, and the recent short-term shocks to the labour market has only added to this struggle. Never has there been a more pertinent time to take an active role in managing your human resources and take charge of the business elements within your control.
Contact Melbourne HR
If you need assistance restructuring your workforce during these unprecedented times, contact Melbourne HR for a free consultation and quote.
PHONE: 1300 784 687
David Simpson is the Founder and Managing Director of Melbourne HR.
Edited by Nicole Torrington, Marketing Manager at Melbourne HR.
