See beyond the numbers

Australia and New Zealand’s skill shortages are entrenched in our labour market and its impact continues to intensify in many industries. So much so, that despite recent increases to skilled migration and automation adoption, almost nine in ten employers are experiencing a skills shortage as reported in the Hays Salary Guide FY23/24.

It means employers intend to invest in talent but in the same breath, employees are still keeping their options open. 95 per cent of employer’s plan to increase salaries, up from 88 per cent last year and even further ahead of 67 per cent the year before. Meanwhile, employees are more confident in negotiating a pay rise in a skill short market, with 65 per cent planning to ask for a raise.

And while it’s well known that salary is the most significant factor in talent attraction and retention, it's not the whole picture. In such a market, employers must also see beyond the numbers and consider the benefits they offer, consisting of the right mix of work-life balance, upskilling and personal fulfillment.

The work revolution: survive or thrive?

The pandemic changed everything, moving us away from offices and adapting to hybrid ways of working, and now generative AI is arriving in a way that everyone can access and exploit. As individuals, we will need to upskill and reskill to take advantage of rapid changes, and organisations need to be more agile than ever to capitalise on benefits that radical change can present.

Almost two thirds of respondents reported undertaking some form of workplace transformation in the past 12 months, with 69 per cent undergoing organisational restructures, 35 per cent digitising workstreams and 30 per cent improving their workforces’ skills and capabilities.

Transformation needs to be handled with care, with our Salary Guide finding that staff turnover increases 1.21 times when a business has undertaken transformation in the past 12 months.

The rapid rise of automation will also affect the jobs we do, with 64 per cent of respondents reporting that automation will change the skills composition of their workforce in the next 10 years – requiring 96 per cent of employees to upskill digital skills, 95 per cent technical skills and 85 per cent soft skill sets.

Upskilling: The learning imperative

Investing in upskilling your workforce is still critical to future-proofing your organisation. It helps solve skills gap issues, but more than that, it enhances employee engagement and retention, and increases loyalty.

Upskilling importance has remained high as skills shortages continue through all industries and levels of business, with 88 per cent of respondents reporting they are experiencing shortages. It also means that with this shortage, employees are recognising building on their skills increases their value, with 90 per cent stating that an organisations L&D program was important to them when deciding who to work for and 61 per cent listing training as the top benefit they value. Additionally, employees are 1.38 times more likely to stay with a current employer when a formal learning and development program is on offer.

It means that learning and development needs a rethink, with more collaborative social learning not covering the full spectrum when it comes to development, particularly when considering skills needed for the future. Organisations can utilise online training platforms to keep their workforce up to date with new capabilities that may be needed. Employees also need to take greater responsibility for their learning – short online courses can help keep skills relevant.

Diversity, Equity and Inclusion: Time for action

While it’s been on the agenda of boardrooms for decades, the needle has hardly moved on Diversity, Equity and Inclusion. For example, considering diversity through the gender lens in Australia, the gender pay gap is 23 per cent and in New Zealand it stands at 10 per cent. At this rate, it will take another 132 years to close the global economic gender gap, executive teams will take at least 29 years to reach gender parity and 24 years to reach cultural parity according to the World Economic Forum.

It’s widely recognised that a diverse and inclusive workplace offers benefits for employers and employees, including increased employee engagement and retention, enhanced innovation and creativity, improved reputation and better decision-making. In fact, 78 per cent of professionals surveyed believe that an organisations stance on DE&I was important when considering whether to work with them.

But how can the needle be moved? Accountability is one aspect that needs to be looked at closely. While 90 per cent of employers believe a diverse team can offer better business outcomes, only 22 per cent said leaders were held accountable for DE&I outcomes in their organisation.

Consider all the facets

So, while salary is still top-of-mind, by reviewing both the financial and emotional offers together, employers can cultivate a positive workplace culture that puts value on employee wellbeing and growth, directly leading to improved performance. This is key to unlocking an organisations potential during this continuing skills recession.

The Hays Salary Guide FY23/24 offers market insights and workforce trends based on data from more than 14,000 respondents across Australia and New Zealand. Download your copy now.