Australia’s labour market is running white hot, with the jobless rate continuing its downward trend to 3.5 per cent, its lowest level since August 1974. Also, workforce shortages show no sign of abating which is a risk to our economic recovery. South Australia’s jobless rate follows the national trend of decreasing 30 percentage points to 4.3 per cent for June.
The highlight from today’s ABS release was the 886,731 South Australians employed in June, the highest on record.
For a better idea of how hot the market is, using the internet vacancy index from the National Skills Commission, there was only 1.6 unemployed people per job advertisement nationally in June. It gets worse, as there were only 1.1 people who were looking for work per job advertisement. In South Australia, it was only slightly better with the same numbers, 2.5 and 1.7 respectively.
Why is our rate of unemployed per job advertisement higher than the rest of the nation? That comes down to our participation rate, which for June was 63 per cent, the lowest of any mainland state or territory. For comparison, Australia’s participation rate was 66.8 per cent for June.
This decrease in workforce participation is not what we need. In a tight labour market, we must reduce the barriers for people who want to work, increase the current low levels of permanent and temporary skilled migration, and increase investment in training to support the chronic workforce shortages across the economy.
With little chance of the labour market cooling down in the short term, let us look at what businesses are doing to retain their staff.
In the September Quarter 2021 the South Australian Business Chamber William Buck Survey of Business Expectations, we asked businesses about their staff retention strategies. On average, businesses would utilise three programs to incentivise retention, with flexible work and annual pay rises the most utilised. Retention strategies were vastly different, with some businesses offering staff discounts and the use of work facilities. Here at the South Australian Business Chamber, one of our incentives is a birthday leave day.
Earlier this year, our peak body in Canberra, the Australian Chamber of Commerce and Industry, released a workforce policy position paper which provides a blueprint to tackle Australia’s acute workforce shortages: Overcoming Australia’s Labour & Skills Shortages through Skills Development, Workforce Participation and Migration.
