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Retail labour shortages worsen as business costs escalate

Labour shortages continue to cripple the retail industry, with retailers saying the situation has worsened over the past three months, becoming much harder to find and recruit new team members.

28 June 2022 

About two-thirds (61%) of retail businesses say labour shortages have gotten worse, or much worse, over the past three months, according to the latest survey by the Australian Retail Association (ARA).

The data revealed no retailers found labour shortages had improved and 39% said the situation stayed the same. About 84% of retailers said it was becoming much harder to find and recruit new team members.

ARA CEO Paul Zahra said the labour and skills crisis must be urgently addressed.

“Retail businesses are fundamental to Australia’s economy and our daily lives, and they simply can’t get enough staff. This has been an issue through the pandemic which has intensified this year and what’s worrying is that things are not getting any better,” he said.

“The labour and skills crisis are in addition to the intense cost pressures businesses are facing, with rents increasing along with fuel and energy costs and supply chain constraints. It is a dire situation for many small businesses, who are struggling to keep their heads above water.

“We are in the tightest labour market in over 50 years, and what is clear is that traditional recruitment methods are not working. We need to see some practical solutions so businesses can access a bigger talent pool, which would allow them to trade closer to their full potential.

“We continue to call on the federal government to allow employment income to be exempt from the age pension income test. This would mobilise a willing and able cohort of workers and allow pensioners to supplement their income, work more hours and help address the staffing challenge."

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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.” 

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