From the Townsville Bulletin newspaper. 16 March 2022
THE war for talent is heating up as an election issue, according to ELMO chief executive Danny Lessem, amid new statistics showing the cost to hire new workers has skyrocketed over the past year, doubling to more than $23,000 per employee, with businesses forced to pay a hefty premium amid the red-hot war for talent.
The average cost to hire an employee has more than doubled and the average time to hire a new employee is also up, according to the study of more than 1,500 human resources professionals conducted by HR software company ELMO and the Australian Human Resources Institute (AHRI).
The research, released Wednesday, found the average time to hire an employee is 40 days in Australia and 50 days in New Zealand, up from 33.4 days in Australia and 36.5 days in New Zealand a year earlier.
Employers are also facing an uphill battle to hold onto their talent, with 43 per cent of workers planning to actively search for a new role in 2022, while 54 per cent of employers said they’re planning on growing their workforce this year.
Thirty-eight per cent of employers said they expect to stay the same size, showing hiring patterns have returned to pre- Covid levels with just 39 per cent of companies last year anticipating headcount growth.
ELMO chief executive Danny Lessem said the war for talent will be a pressing issue for the federal election.
“These are startling findings,” he said. “The increase in the cost to hire has been enormous … indicative of a severe talent shortage across sectors, and this is going to definitely play out in the election in one way or another.”
It’s incumbent on political parties to come up with solutions to the talent shortage issue, the executive said, or else risk a major handbrake on the national economy.
“If businesses cannot ramp up now it is definitely going to have an effect on the economic prospects of this country,” he said. “There has to be changes in terms of how we attract skilled labour, because Australia is not the only country that‘s aiming to address their skills shortages, we’re competing against tons of others globally.
“We need to make it easier for skilled people to migrate here to take advantage of the extreme growth we will see over the next couple of years, and we need policies that will assist with that in order for our economy to get out of the box quicker than our competitors.”
Mr Lessem added employees are now in better positions to negotiate their conditions than they have been for a long time, including across areas like flexibility and wellness.
“It’s important that businesses understand that it’s really an employees’ market now, and businesses need to respond to that.
“We expect this to continue, even though borders are open that‘s only a short term solution, and we expect to see these skills shortages continue over the next 12 months.”
The biggest issues facing Australian businesses over the next year are recruitment, followed closely by skills and leadership development, according to AHRI chief executive Sarah McCann-Bartlett.
“This isn’t surprising, with anticipated higher turnover, increased hiring intentions and skills shortages all coming to the fore at the same time,” she said.