Data from payments platform Airwallex reveals that Australian businesses are facing a talent crunch, resulting in a significant increase in spending on recruitment agencies.
According to the data, businesses have spent an additional $429 million on recruiters compared to a year ago. This surge in spending highlights the challenges businesses are facing in finding and attracting skilled professionals.
Overall, business expenses have risen by 9% in the past year, totaling over $152.8 billion from January to May 2023. Airwallex’s data sheds light on the financial burden caused by Australia’s skill shortage. On average, businesses are spending an extra $10,000, representing a 16% increase, on employment agencies compared to the same period last year.
The data, which captures spending from January to May in both 2022 and 2023, reveals a significant increase of 76% in Australian business spending on domestic recruitment agencies. This increase amounts to an additional $15 million compared to the previous year. Furthermore, international spending on employment agencies has surged by a staggering $414 million as organizations turn to overseas sources to fill crucial roles.
The rising spending on recruiters reflects the growing difficulty Australian businesses face in finding qualified talent within the local market. The skill shortage has prompted businesses to seek solutions both domestically and internationally, incurring substantial costs in the process.
This data serves as a reminder of the pressing need for effective strategies to address the talent crunch in Australia. Businesses must explore alternative avenues, such as upskilling existing employees or investing in training programs, to mitigate the reliance on expensive recruitment agencies. Additionally, policymakers and educational institutions play a vital role in fostering a skilled workforce that meets the evolving needs of the Australian economy.
As the talent crunch persists, Australian businesses must remain proactive in their efforts to attract and retain top talent. This may involve implementing innovative recruitment strategies, offering competitive compensation packages, and creating a supportive work environment that appeals to skilled professionals. The challenges presented by the talent crunch require a collaborative approach between businesses, government entities, and educational institutions to ensure a sustainable and prosperous future for the Australian workforce.
Airwallex Director of Sales, Lachlan Millist, said the data showed the economy-wide skills shortage was forcing businesses’ in-house recruiters to look for external support.“Our Expenses data shows recruiters are emerging as the winners of the talent crisis,” Millist said.
“Increased spend on employment agencies suggests SMEs are struggling to find talent in the ongoing skills crisis, forcing them to turn to third parties to resource their teams.
“This brings a new cost into consideration for businesses at a time when money is already tight. Businesses need to find cost savings elsewhere so they have access to the talent they need to grow. Too many businesses are paying through the nose for everyday essentials, including on exchange rates and transactions. They may seem insignificant numbers in isolation, but over the course of a few months or a year, it all adds up.
“Money management platforms such as Airwallex can help businesses run their business as usual, but at a far lower rate and with real-time transparency on where funds are being utilised.While businesses of all sizes are feeling the impact of a tightening labour market, Airwallex is bucking the trends of many tech companies and actively recruiting for 500 roles worldwide.
“Just a few years ago businesses were spoilt for choice when it came to recruitment but now they’re having to be smarter about costs in other parts of their operations to source the talent they need to grow. This is a really tough macro environment for a lot of companies, so being able to track and account for every dollar being spent is important.”