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Should Australian manufacturing, logistics and warehousing sectors prepare for the Great Resignation?

over 2 years ago by
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​The Great Resignation in New South Wales: fact or fiction?

Early in 2021, whispers began circulating about a "Great Resignation". Anthony Klotz proposed the theory that workers had been rethinking their lives as they spent time in lockdowns and remote working. They wanted more. They wanted better. The evidence of this came predominantly from the USA and Britain. As time has progressed many commentators have been predicting worldwide resignations and worker shortages.

In the last few months, more and more voices are being heard questioning the validity of this phenomenon. It seems, they say, that the data itself doesn't fit an Australian 'Great Resignation.'

One of the country’s leading labour market economists, University of Melbourne professor Jeff Borland, says there are no convincing statistics he’s aware of to support the idea of an Australian Great Resignation. “We have no evidence,” he says.

Job resignations have increased as workplaces have opened up. However, some are attributed this to an 'evening out' after 18 months of very low resignations. These voices are arguing that annual resignation numbers are very similar to previous years' totals. They may even be lower.

It will take some time to collect and analyse the data to see if the effects of COVID-19 lockdowns, restrictions, slower lifestyles and remote working environments have really had such a significant effect on people's attitudes towards work.

Is 'wait and see' a valid option?

If there is doubt over the reality of the Great Resignation and its impact on the manufacturing, logistics, and warehousing (ML&W) industries can we just wait and see? Is there any reason to prepare for something that might not happen anyway? Looking at recent findings from the ABS (Australian Bureau of Statistics) it seems clear that, Great Resignation or not, demand for workers within the ML&W industries in New South Wales is increasing.

Whether that is due to a change in attitude and demands from workers or other factors, it is a reality. The occupancy rate of warehousing Australia-wide has been increasing. This indicates an expansion within the industry. Businesses that had to let workers go at the height of the lockdowns are now building up their workforce again. Vacancy rates in the manufacturing sector have risen from 8% to 22.9% between Feb 2020 and Aug 2021. In the transport, postal and warehousing sector, they rose from 5.3% to 15.7% over the same period. Businesses that do nothing to prepare within this industry are likely to face worker shortages and a lot of stress.

Retain or recruit?

To keep worker numbers stable, or in the case of growth, to increase worker numbers, your business is faced with two options. Retain those you have or recruit new workers.

It takes a lot longer to recruit someone, train them and get them up to 100% productivity than the notice period most employees are likely to give. It also takes extra resources and investment to onboard a new employee. Practically and economically, retention is the best option. But economics aside, a workplace that prioritises retention benefits in many intangible ways, not the least of which is the Mental Health of its workers.

Retention requires deliberate action

According to Dahlia Jovic, the main reasons for employees leaving their job include:

  • seeking better pay

  • lack of growth opportunities

  • underused skills

  • employee well-being not being prioritised

  • minimal communication from leadership

All of these points can be addressed in a business that is serious about providing an appealing workplace and retaining its current employees.

Pay rates

Commentators have noted that Australian wages have not seen the significant rise that USA wages have seen over the last year. Part of the reason for this has been the availability of workers compared to the demand for them. This could change moving forward.

Things could change as NSW and Victoria reopen their economies, of course. Before the two biggest states went into their mid-year lockdowns, there was a massive jobs boom underway - and that may well resume, driving up wages as a consequence.

Hand in hand with pay rates may be bonuses or other incentives to motivate employee loyalty.

Workplace conditions

One of the most significant ways employees can be convinced to stay in a workplace is to provide high-quality workplace conditions. Businesses that communicate well with their employees and listen to them are much more likely to recognise growing frustrations. Frustrated employees are the ones who are looking for work elsewhere.

Workplaces that prioritise employee Mental Health go a long way toward ensuring their employees enjoy their jobs. They also support them to do those jobs well.

If employees are able to use their skills and feel they have opportunities to grow those skills and advance in their workplace, they will feel much more satisfaction in their work. Frequently, employees will look for a new job because they believe they have no room for growth or extension in their current position. By being proactive about identifying potential and providing training opportunities for your workforce, a business can increase the sense of satisfaction and value workers feel.

In a tight labour market, calling on current employees to 'fill the gap' when there is a vacancy is tempting. When positions are not filled, employees are often called to cover roles they don't know. They may be asked to increase productivity to make up for labour shortages. Working conditions become stressful and employees start looking elsewhere. Losing employees because you are already down on staff becomes a vicious cycle that only worsens. According to HRSolutions:

Inadequate staffing is a principal contributor to job-related stress, which is, in turn, a principal factor in turnover. Employees in understaffed organisations can lack a sense of control over their rapidly increasing workload. This hectic environment can lead to poor work performance and can be detrimental to the organisation as a whole.

Workplaces that make sure staffing levels are adequate, even if they have to use short-term contracts to do so, are much more likely to retain the staff they do have.

Recruitment requires preparation

While retention is the ideal goal, vacancies will always be a reality. Even if you could operate your business in a way that provides the ideal working environment, expansion and seasonal demand changes will mean that you need to hire new workers at times. If you wait until you need it, you waste valuable time and risk that ‘ideal’ environment you have worked so hard to provide.

Avoiding issues is much easier if you have established a good relationship with a recruitment agency in advance. Recruitment can take time, and that time can be minimised by having a recruitment company you know and are known by before you need them.

Casual workers can fill the gap as you are working through the process of hiring long-term workers. They are also invaluable for those seasonal fluctuations or to cover periods of unexpected demand.

MTC Recruitment works hard to ensure that the candidates they send out are the right fit. Consultants get to know your business well during the onboarding process. They understand your needs and the skills and experience needed for your workplace. They also get to know their candidates well. They ensure that any candidate, whether for casual or permanent contracts, is well prepared and supported as they come into your workplace.

By building a workplace with great working conditions and connecting with an effective recruitment company, you can make sure you are ready. Ready for either the Great Resignation, or just the predicted growth and expansion in labour demand as the economy gets moving again.

If you want to be proactive about meeting your future labour demands efficiently and without pressure on your current labour force, contact MTC Recruitment today.