News & Blog

19 July

There is a real and threatening epidemic emerging…. and I am not talking about COVID.

I’ve worked in recruitment for over 20 years now and in that time have seen many changes in the labour market. From dozens of jobs and a lack of candidates to dozens of candidates and no jobs. When COVID first hit, I wasn’t alone in thinking that this would see a huge wave of job seekers hitting the market as companies cut their workforce, thus giving companies who were hiring the pick of a large pool of talent.

However, in reality, the reverse is true. Yes, many businesses downsized early on in the COVID lockdowns and redundancies did occur, but not as prolifically as expected. COVID brought out the best in business owners, with many (including myself), working for free for the year to ensure their staff could be kept in their jobs.

Now, businesses are back in growth mode, desperate to attract staff to aid their expanding orders or business operations. But where are all the people? 

The latest Australian Business Review figures show that job mobility is the lowest rate on record. That is exceptional. Job mobility is a measure of how many people are changing jobs and how often. With the rate being the lowest on record, this means people are not moving jobs, and what we’re seeing is companies are grinding to a halt because they can’t find staff.

The COVID pandemic has inadvertently triggered a sudden, widespread occurrence of another undesirable phenomenon – lack of available (and willing) talent.

Regardless of what the unemployment figures might say, at the pointy end, hiring managers are seeing an acute scarcity of labour, with firms finding it particularly difficult to hire. The job mobility figures reinforce what we’re seeing and hearing. There are less skilled people putting their hands up to move jobs. We are seeing fewer applications across the board in almost all sectors, with a notable drop in skills and experience from the few who are applying.   

This has hamstrung many organisations, so they are now looking at alternative ways to move forward and this is where it gets interesting.

With governments putting their heads in the sand to this labour shortage epidemic and making obtaining visas for offshore workers even harder, companies have been left with little choice but to think ‘what now?’

This month, within our client base, we have seen an Optometrist reduce consulting hours from 6 to 3 days a week because he can’t find suitably experienced staff to assist, and hotels turning away bookings because they can’t get cleaners to attend between guests. That’s just the tip of the iceberg.

Across the USA, just 10% of US job seekers are urgently looking for jobs, according to a recent survey conducted by job board, Indeed. Whether it's because of virus fears, childcare costs, financial cushions or enhanced unemployment benefits, the jobless in America aren't clamouring for many of the jobs on offer, which are largely in the hard-hit restaurant and hospitality space. So, what’s a business to do?

They are going to adapt.

Here’s an example. At cellar doors around the wine regions of Victoria, we are seeing the bespoke tasting experience with passionate wine-making staff now replaced by ‘self-directed’ tastings, where patrons are seated at a table with a tray of pre-prepared samples and a laminated tasting guide.  This means less staff are required overall, those who are hired need less experience and training and the tasting experience is ‘systemised’ for increased efficiency. 

What we are also seeing is a greater investment in plant and machinery, and AI technology to replace roles previously held by humans to being completed by machines.

In the US, the hospitality industry is turning to robots. Hotels are allowing guests to use kiosks to check themselves in, apps to control the television and light switches in their room and a few use delivery bots to send to guests’ room when they want a refreshment. Restaurants are using robots to deliver menus to guests, McDonald's has fewer counter staff now, as you place your own order instore, and has started testing automated drive-thru ordering… the list goes on.

Singapore has been one of the biggest uptakes in AI for the labour force. The population trend means that Singapore is rapidly becoming a nation that cannot renew its labour force. As workers age out of the market and retire, the country will not have enough younger people entering the workforce to replace them. It faces a real danger of labour shortage.

With the seniors living longer and a decreasing pool of working adults, those capable of providing economic support to the elderly will shrink accordingly as well. Nearly 30 years ago, in 1990, there were 10.5 workers supporting one elderly. By 2018, the number had shrunken to just 4.8 workers. Accordingly, its people are also fussy about what they want to work in – a sentiment we are seeing locally as well. Manual, menial labour is shunned; PMET (Professionals, Managers, Executives and Technicians) jobs are preferred. The service industry, in particular, is feeling the squeeze with positions no local wants to take up. So, they are turning to AI and robots to “fill the labour shortage”.

The benefits seem to be obvious. Automated solutions are often one-time investments for companies, they can boost productivity, and don't require re-training when staff turnover.

A recent report from the World Economic Forum predicted that by 2025, the next wave of automation – turbocharged by the pandemic – will disrupt 85M jobs globally. New jobs will be created but “businesses, governments and workers must plan to urgently work together to implement a new vision for the global workforce”.

There is a real potential long-term negative impact here for workers. COVID has certainly seen many people reassess their priorities, favouring shorter working weeks, lower salaries in favour of time with family, a simpler way of living and less stress. Has this fundamentally changed the workforce forever?

As we move to replace roles with machines, thousands of people may find themselves eventually out of work. Whilst it might seem like a good idea now for workers to prioritise lifestyle over effort, this attitude may well backfire. As businesses restructure and invest in technology, we will find that many jobs simply won’t exist anymore and options will be limited. 

Those that can service the machines will win, those that can’t retrain or have jobs that have been dissolved and replaced with machines will lose.  

As I see it, there are several considerations here... New Zealand typically follows 10 years behind US trends. With technology development and adoption, that time will be less. This means, in NZ, there is real potential that Kiwi businesses will give up on trying to find workers and move to robots to replace roles.

Short term, there are practical things you can do if you are a business struggling to find staff.

Firstly, you need to shift your thinking from believing there are vast numbers of talented people out there. You have to get creative with your advertising and ensure you have the best ad, to give you the best opportunity to engage with potential workers. You also need to think about where you are placing your ad. Most of my clients have moved to digital campaigns across social platforms to ‘fish where the fish are’ as they find job boards failing to deliver. They are also engaging us more than ever to copywrite their adverts to ensure it meets the market expectations.

For the workforce, I’d say it’s time to start thinking big picture. Consider this, does your role have longevity? Or are you at risk of being replaced by a robot in the next 5 years? If you are, what will you do? Workers who are enjoying the potential short-term bubble of working from home with full salary and a 4-day week may be up for a rude shock shortly. It may be time to think about retraining, diversifying and ensuring you are building transferable skills that will take you into the future.

 

 

References:

https://www.businessinsider.co.za/labor-shortage-automation-restaurants-hiring-employment-productivity-job-market-outlook-2021-7

https://www.gpc-gr.com/robotics-singapore/detail.php?seq=1

There is a real and threatening epidemic emerging…. and I am not talking about COVID.