Despite earlier pressures and projections, wage growth in Australia has remained moderate, according to the RBA (Reserve Bank of Australia). To be more explicit, wage growth in the public sector was slow. Though there were some good signs in the private sector, the growth had only improved to about its pre-pandemic level.
This has a direct impact on three parties. Each reacts differently and has its own action plan but all will contribute to push wage growth in the foreseeable future. These parties are:
- The Australian government:
The government has been slow to boost migration as they believe that rapid return of significant migration would suppress wage growth. From experience, they believe that more than 80% of jobs will be recovered post lockdowns. So, this plan was carried out with the hope that more jobs could be created and filled by Australian during the Christmas and New Year holiday season.
Many union leaders are with the government on this, agreeing that opening the border to the pre-pandemic level now is too much and too soon. These unions feared that temporary visa holders would be exploited and business owners would use this to hold down wages.
- The Australian professionals:
In the same note released by the RDA, Australian professionals are quitting jobs for higher pay. Professionals working in the private sector has been active and pushed employers to offer higher pay. This is believed to encourage more workers followed the lead and changed jobs.
Meanwhile, Australia is actually losing people overseas, rather than gaining them. Part of this is due to the government restriction plan mentioned above. However, the main drive behind this is the eager to travel. After more than 20 months of lockdown, Aussies, mainly young professionals, are leaving the country to travel, reunite with families, and work abroad. All of them have no plans to return to Australia in the near future, making Australia’s labour market considerably tighter than it has been.
- The Australian firm owners:
Since the government decided to limit immigration “entries”, business owners, especially accounting firm owners, have had no choice but to give significantly greater salaries to compete for applicants. Some even offer a wage increase of up to 20%. Even yet, the majority still have difficulty finding suitable candidates.
Many accounting firms have been compelled to outsource as a result of this. Firms eventually learn that they save a lot of time and money on finding, training and retaining local talent by sending work overseas. It is unclear how long this situation will last in Australia, outsourcing has been and will continue to be a viable solution to labour shortage.
If you’d like to talk more about how Odyssey can assist your accounting firm in this challenging time, drop us a line.