The release of the May 2022 vacancy data (above) provides gloomy reading for the nation’s employers but great news for the eight thousand recruitment agencies around the country.
The demographics point to the almost guaranteed certainty that the soaring vacancy rate won’t be dropping back to anything like historical norms any time soon.
Vacancies climbed a staggering 60,000 (13.8%) in three months to reach 480,100, a massive 110,000 (29.7%) more vacancies than was recorded twelve months before.
The vacancy rate has more than doubled, compared to February 2020, immediately before the pandemic hit, when vacancies numbered 227,400.
Just over one-quarter of Australian employers reported at least one vacant job, a new record high, up from the previous record high in February 2022 (23.5% of employers).
Northern Territory employers were suffering the most with 31.6% reporting at least one vacancy. Employers in Western Australia (28.3%) and Victoria (27.3%), respectively, were the next two worse-off states.
Somewhat surprisingly, employers in Administrative and Support Services (38.3% reporting at least one vacancy), and Public administration and safety (37.9%) and Electricity, gas, water, and waste services (34.5%) were the employing industries experiencing the most (relative) vacancy pain.
The reasons causing employers in these sectors to experience more vacancy pain are most likely to be a combination of;
a) greater rigidity in their remuneration and benefits policies, and
b) lengthier recruitment processes,
Both of which have caused employers in these sectors to react too slowly to the white-hot recruitment market and consequently miss out on candidates who receive competing offers much faster.
By raw numbers health care and social assistance easily topped the vacancy data with 68,900 vacancies, followed by accommodation and food services (51,900 vacancies); professional, technical, and scientific services (42,900 vacancies)
The major reason for vacancies, nationally, was “resignations/replacements” (80.4% of all vacancies) which climbed for the third consecutive reporting period (3 months), topping eighty per cent for the first time.
Unfortunately, for employers, there is no cavalry coming over the hill as the most recent population data confirms.
Although Australia’s net overseas migration* is now back in positive territory the huge hole in the labour market, caused by the dramatic drop in new entrants to the labour market from other countries over the past two years, will have an impact for years to come.
This labour market hole was a double whammy because Australia stopped the inflow of labour but the outflow was not similarly affected leading to Australia posting a net loss of overseas workers.
Conservatively Australia now has a labour market hole – the ‘lost’ 310,000 workers that did not arrive in Australia in 2020 and 2021. This hole is having a huge impact on the Australian labour market.
To put those ‘lost’ 310,000 workers in context, 357,000 is the total increase in the Australian workforce since December 2021.
This gap of 310,000 workers cannot be easily or quickly bridged as the only way that can be done is to increase migration.
To make up a hole of 310,000 workers by June 2023 total net migration for the next twelve months would need to exceed 660,000 people.
Realistically, it’s impossible to triple migration numbers in one year.
Save just waving workers into the country without due process, Australia simply does not have the bureaucratic capability to process those numbers of people in a year, even if there was the political will to do so.
The bad news for employers, and the very good news for recruitment agencies is that, unless the economy suffers a dramatic recession, the boom in vacancies and placements will continue for the foreseeable future – the demographics all but guarantee it.
* net overseas migration is the net gain or loss of population through immigration to Australia by overseas migrant arrivals and emigration from Australia by overseas migrant departures. Migrant arrivals include Australians permanently returning to Australia, overseas student arrivals as well as migrants on work visas of varying types.