Employers getting ‘back on the tools’ to keep businesses afloat

In the lead-up to Christmas, Aussie businesses are stranded on struggle street, with a recent report highlighting that 77 per cent of businesses are facing skill shortages.

Business NSW’s recent State of Skills 2024 report calls on the federal government to lend a hand to struggling businesses being affected by the skills shortage. According to Business NSW, the government must accelerate the number of skilled visas and reverse planned cuts to international students.

This comes after the report revealed that 77 per cent of NSW employers are still facing significant skills shortages. Although this is down from 93 per cent in 2022, eight in 10 businesses have had to boost pay or offer better conditions in 2024 to stay competitive in the battle for skilled workers.

“Businesses are bending over backwards to hire and retain staff, and that is being reflected in greater wages and better conditions,” said Business NSW chief executive Daniel Hunter.

“To stay ahead, businesses are not only paying a premium but also innovating their approach, with 80 per cent boosting pay or improving conditions. This is up from 12 per cent in 2017 and 47 per cent in 2022.

“This trend reflects the intense pressure to adapt and secure skilled workers. Businesses are at a lose-lose for workers: they can’t afford to hire people they need, and there is not the pool of people to hire from.”

Hunter argued that the federal government’s plan to cut down on the number of international students entering the country in 2025 is a rather backward decision.

“The federal government’s decision to try and cut the number of international students in 2025 will make things much worse, like we saw during COVID,” said Hunter.

“The federal government needs to accelerate the number of skills visas. We must ensure filling skills shortages are data-driven, not politics-driven.”

The report showed that more than a quarter of employers (28 per cent) reported that they had made five or more attempts at recruiting for a given role throughout 2024. Along with this, 39 per cent of employers anticipate significant negative impacts on their business if skill shortages continue.

To combat this, an increased number (36 per cent) of employers experiencing a skills shortage were relying on contractors and other external service providers, while others had resorted to getting “back on the tools”.