About three-quarters of retailers (73%) said job vacancy rates were worse than business as usual, according to the survey.
More than half (55%) of retailers found absenteeism rates were worse, or much worse, than three months ago.
Retailers also wanted to see reduced red tape when it comes to immigration so businesses can get more skilled foreign workers into the country, along with more international students, who are sorely needed to fill frontline roles across retail and hospitality.
Mr Zahra said the shortages were pronounced within specialist roles such as data and digital which was stifling the growth and performance of businesses within critical areas of e-commerce.
“Hair and beauty professionals and specialist roles particularly within regional areas are also acutely impacted. We are competing globally for talent, and unfortunately, our reputation has been damaged because of the lockdowns, meaning we are not the attractive option we once were for foreign workers,” he said.
“We are in discussions with state and territory governments around accelerated training solutions to mobilise other important workforce cohorts including return to work parents and people from culturally and linguistically diverse backgrounds.
“Without government intervention, the labour and skills crisis will only deteriorate further and push some businesses to the brink. You cannot have an economic recovery without a retail recovery, and this is also a major handbrake on growth and productivity.”