OCT ‘23
Business Challenges: Cost Minimisation vs. Investing in Talent In the June Quarter, the Australian Bureau of Statistics reported a modest 0.4% increase in GDP.
a growing number of businesses on hiring freezes are limiting organizations’ ability to secure skilled staff.
While Australia may not be in a technical recession, we are now officially experiencing a per capita recession, with a significant decline in living standards across the country.
In an effort to cut costs, some companies are resorting to hiring less qualified staff, resulting in lower productivity.
As households prioritise spending on essentials, savings have plummeted to their lowest level since the Global Financial Crisis. Additionally, the Australian job market is showing signs of strain, with an increasing number of hiring freezes. The latest data from the Australian Bureau of Statistics in August revealed a 9.2% decline in private sector vacancies and a 6.3% decrease in public sector vacancies since May 2023. In response to this economic uncertainty, businesses are starting to feel financial strain and exploring ways to reduce resources to mitigate risk in a potential decline of the economic climate.
Challenges for Companies: Companies are facing several challenges in the current market. There has been a shift towards stricter adherence to salary ranges and a focus on cost minimisation rather than investing in new talent. Budgetary constraints and
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Hiring processes and salary reviews are also taking longer as hiring managers become more cautious. Internal negotiations for the smallest increases above salary bands are prolonging decision-making. As a result, inflexibility and slow decision-making are escalating the risk of losing highly skilled talent in elongated review and recruitment processes.
Recommendations for Companies: a. Conduct a thorough analysis of workforce needs: Evaluate organisational objectives and identify key roles that are crucial for driving growth and achieving core goals. Prioritise and allocate existing resources accordingly. Where necessary, go out to market to fill vital roles. b. Optimise internal resources: Identify skill gaps within the current workforce and provide training opportunities or reassign employees to areas where their skills can be effectively utilised. c. Consider alternative solutions: If there’s a hiring freeze, explore options such as engaging contractors, outsourcing, or redistributing workloads among existing employees to meet immediate requirements.
