Businesses ‘pulling out all the stops’ to attract and retain employees: report

Among the 300 business leaders who were surveyed, 70 per cent reported a rise in the financial impact of not having the necessary in-house skills. 

The shortage of skills not only leads to increased costs but also causes delays in critical projects, and compromises product quality and customer service. This often resulted in negative financial setbacks, according to a significant number of companies surveyed.

“The short supply of skilled workers, along with a degree of caution in the market, is threatening to have an impact on companies’ growth potential,” according to David Jones, the senior managing director for the Asia-Pacific region. 

In a labour market where candidates have taken the driver’s seat, 82 per cent of employers say competition for qualified talent has increased compared to 2022.

And while recruitment pains continue to plague the country and businesses are facing other headwinds such as recession fears and global political uncertainties, the report highlighted that the job market remains robust. 

The survey revealed that firms are concentrating “on maintaining headcount and filling vacant roles” amid the high turnover rate in the market. 

Despite talks of a recession looming over Australia, 75 per cent of employers stated they planned to hire permanent staff in 2023. 

Meanwhile, 63 per cent of employers are turning to contract employees to find specialised talent immediately, along with the flexibility to keep staff on for longer if required.

On the other side of the fence, the report noted that recession fears are causing jobseekers to adopt “a cautious approach” before changing jobs to ensure they won’t be part of the first wave of potential layoffs. 

Mr Jones noted that there is a positive thing that emerged amid the tight labour conditions. 

“With living costs rapidly rising, however, companies are increasingly recognising the importance of offering higher remuneration packages to retain and attract talent,” he stated. 

According to the report, business leaders are now focusing on retention and upskilling as the benefits of paying staff at market rate and giving access to hybrid working and other perks outweigh the costs associated with hiring new staff.

The report cited retention concerns being driven by employees expressing concern about their workload and competing organisations actively headhunting and offering higher salaries, benefits, and perks.

As part of their concerted efforts to retain employees, surveyed companies said they are allowing semi-remote work (71 per cent), enhancing professional development (70 per cent), increasing recognition efforts (68 per cent), and boosting compensation (62 per cent).

With hybrid working options now becoming an expectation among professionals, the report warned that businesses who want their staff reporting to the office full-time risk losing employees or failing to attract skilled talent. 

“Organisations who embrace hybrid working arrangements and give their staff choices benefit from higher staff morale and better performance,” the report stated. 

Work/life balance and the cost and time spent on commuting are some of the reasons that employees cite as deterring them from returning to full-time, in-office work arrangements, the report showed. 

Despite this, data showed that 59 per cent of the surveyed business leaders said they will require staff to increase the number of days they are in the office.

Staff at medium-sized businesses are expected to feel the strongest push from their employers to be in the office more, according to the report, as 73 per cent of business leaders in the sector said they want staff to come back more frequently.

Only 58 per cent of large businesses and 47 per cent of small businesses want to increase the number of days spent in the office, the report found.

“Now that restrictions have been fully lifted and the workforce is bouncing back and re-establishing their ‘normality’, employers are rethinking how often employees should be working from home and how many in-office days should be required,” Nicole Gorton, director at Robert Half, stated. 

Lastly, the report pointed out that there is still one area that employers and employees are not seeing eye to eye: salary.

Fierce competition for talent is putting salary at the forefront of the battle to attract talent, with starting wages continuing to trend upward. 

Following two years of high salary jumps, the report found that candidates are expecting their salary to continue to rise in 2023 with each role change, which it noted is potentially leading to “unrealistic salary requests and expectations”. 

Among the employers surveyed, 61 per cent have had a candidate with unrealistic salary expectations in 2022, with 30 per cent of employers acknowledging they can’t compete with other companies’ salaries, benefits, and perks. 

Meanwhile, 43 per cent of employers said they are providing financial management training to support their employees with the rising cost of living.