It is impossible to turn on the news or pick up a newspaper and not hear about the current skills shortage in Australia. According to the July 2022 Australian Bureau of Statistics release, there were 480,100 job vacancies in Australia, a 111.1% increase since February 2020 (1). In August 2022, the ABS also reported the unemployment rate at just 3.5% with youth unemployment a low of 8.4%; underemployment has also decreased to 5.9% (2).
Australia is facing a lack of skilled labour and high competition exists for the labour that is available. The lack of suitable talent is impacting all of us and the contact centre industry is no different. But what is driving these challenges?
Talent Shortage in Australia
Key drivers of the talent shortage in Australia are many and varied and there is no simple explanation. Some of the key factors include:
- Lack of skilled migration, halted through the pandemic and only just beginning to open for many future employees;
- Lack of general migration – the recent freeze on migration during lock down has seen reduced migration and therefore workforce overall;
- Lack of travellers – especially young workers who traditionally work in many industries such as hospitality and often contact centres, or seasonal workers such as fruit pickers;
- Expected reduction in availability of Australian youth as they commence overseas travel for work experience after extended lockdown and lockout periods;
- Reduction in the number of overseas students – often a large and seasonal workforce for many industries;
- Decreased workforce participation indicating some people are leaving paid work. According to Prof Bob Breunig, an economist at Australian National University, many older workers decided to leave the workforce during COVID-19 and have decided not to return. (3)
The labour market is dynamic and there are some other factors that will also impact our ability to recruit and retain suitable resources:
- Increased mobility as employees look for new opportunities (requiring more recruitment to replace those that leave). In May 2022, of those business with a vacancy, the reason for the vacancy in 80.7% of companies was resignations/replacements (the next largest category at 47% was increased workload). This would indicate that the opportunities in the market are creating a culture of high levels of resignation and recruitment as employees determine the options open to them. (4)
- Increased sick leave due to recent pandemic impacts, resulting in the need to hire more employees to cover shortfalls (and therefore more competition for the available labour).
- Increased choice for candidates as opportunities open up across multiple industries, locations and job types and the challenge of standing out as a career choice.
Contact centres are not immune to this challenge and face a traditionally higher turnover of employees than many other industries, making the challenge of retaining and recruiting new employees even more critical for business success. While the average attrition rate for contact centres in Australia is reported at 26%, the 2022 Contact Centre Best Practice Report notes that 17% of contact centres experience attrition of 50% or higher (5). Combine this with the fact that Hays notes in their 2022 Industry Report that customer Service Representatives are one of the key areas for demand for skills and it is clear that competition for contact centre labour will be a driving force in the years ahead (6).
This creates a challenge for our industry that needs to be managed with increased focus on forecasting and resource management.
In our next blog we will share some of the strategies you need to deploy to get the most out of your workforce planning to meet current and future resourcing challenges.
(5) 2022 Contact Centre Best Practice Report, Smaart Recruitment
(6) Hays 2022 Industry Report