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Paying handsome salaries has become essential to recruit, but that means staff have a responsibility too.
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The swings and roundabouts of staff shortages
23 September 2022
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13 minute read
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Whenever topics around money come up, there’s an instant switch in most of our brains. We change gears and step into a mental space that considers two potential sides in a particular situation.
As a business owner, I have found myself confronted with a broader reality when I recently advertised and interviewed candidates for a vacancy in my team. As an accountant, I am always aware of the state of the world and its financial affairs and how they impact various sectors of society and businesses.
While salaries haven’t increased greatly over the past decade but the cost of living certainly has, I have pondered the ethics around pay and salaries.
In my view, paying employees well is, of course, non-negotiable, but it must go both ways. Pay people what they are worth but hire employees that are authentically and genuinely invested in the health of the business.
At the end of the day, business owners must position themselves to pay well, or the job simply won’t be done with genuine interest and investment in the outcomes of the business.
Overdue increases
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At the same time, the world is seeing wage increases that perhaps should have happened over the past decade come roaring into the market now as employees demand higher pay. Much of this is attributed to COVID, and the tables have turned. Where employers may have previously advertised a position at a certain salary bracket, employees are now arriving at interviews with expectations about what to looking for.
Many employees are only interested in work-from-home opportunities and refuse to accept anything else. At the same time, there seems an all-time low interest in taking opportunities because of great work environments, career advancements, healthy workplace cultures, and workplace interaction are on offer. Instead, employees are focused on financial benefits and exclusively working from home first and foremost.
How did we get here?
Why are employees’ demands entertained now, and how have the tables turned? COVID and the restrictions have slowed the influx of skilled workers and students entering the country. Additionally, the fact that Australia had some of the most stringent lockdown regulations in the world has deterred many skilled workers and students that may have entered the country from doing so. This leaves Australian businesses in a battle to find reliable, affordable, skilled staff for their businesses.
In short, the skilled worker shortage is resulting in slim pickings for businesses, and almost zero affordable labour. Workers are asking for higher rates of pay than what many businesses are able to afford.
Where businesses may have found a unicorn previously, a talented youngster willing to work and learn their way up at a low wage, we’re seeing demands for higher pay rates across the board.
Additionally, the work-from-home opportunities have driven the labour prices up across the country, especially in rural settings and small towns where they were traditionally lower. Larger firms are now hiring remotely, giving people in small towns the opportunity to earn higher salaries, putting further pressure on rural firms.
Name your price?
I have always put my team’s needs ahead of everything else, believing that each member must thrive if my business is to bloom, but I believe there are real downsides for everyone in this situation. It’s an employee’s market, as a worker you can name your price. If, as a business owner, you want to get the work done, to a degree, you have to suck it up and pay it.
The fact is that the cost of living has increased exponentially and workers are responding to that. The downside is that businesses have little alternative but to accept the terms employees are asking.
As a result, prices go up or business profits go down, it requires greater resources and time to find suitable candidates that fit into the company’s budgets and requirements, and we then see the cost of professional services rising, which sets in motion a vicious cycle.
I try to tackle these issues from a holistic viewpoint, looking at the factors that contribute to the decisions and actions of everyone involved. Getting small businesses to adapt to the drastically changing financial climate and business environment is my area of expertise.
While the current times are not easy, having compassionate, open-minded, and expert guidance can make all the difference for businesses seeking to navigate their way to a prosperous state in their niche.
Sonia Gibson is founder of Accounting Heart.
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