Retail labour shortages getting worse, says ARA

Labour shortages continue to cripple the retail industry, with the majority of members surveyed by the Australian Retailers Association (ARA) saying the situation has worsened over the past three months, and that it’s becoming much harder to find and recruit new team members.

The findings of an online poll of retailers, representing thousands of businesses nationally both large and small, include:

  • 61% of retail businesses say labour shortages have gotten worse, or much worse, over the past three months
  • No retailers said labour shortages have improved; 39% said the situation has stayed the same
  • 84% of retailers say it’s becoming much harder to find and recruit new team members
  • Around three quarters of retailers (73%) say job vacancy rates are worse than business as usual
  • More than half (55%) of retailers say absenteeism rates are worse, or much worse, than three months ago.

ARA CEO Paul Zahra says 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. 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,” Mr Zahra said.

“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,” he said.

“We also need to see reduced red tape when it comes to immigration so we 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. The shortages are pronounced within specialist roles such as data and digital which is 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,” Mr Zahra 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,” he said.

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