Five Key Issues in the Australian Workplace—Highlights for Multinational Employers

The key issues affecting Australian workplaces bear a strong resemblance with those in the United States. While generalizations suffer from the limitations of being just that, here are five issues HR and workplace leaders in Australia are grappling with in a two-minute read.

1. Skills and staff shortages and wage pressure

Almost one in five Australian employers are having difficulty finding suitable employees to fill jobs according to Government statistics, as the jobless rate falls to a low of 4.2%. The biggest shortfalls are in the small business hospitality and other services sector, but even large utilities, manufacturing, and construction employers are feeling the pinch. Anecdotally, the demand for human resource professionals is on a ten-year high too!

Such shortages are seeing increased wage pressures, which are colliding with other inflationary forces taking hold of the Australian economy.

2. Supply chains under pressure

Add to this another pressure point—unionized workplaces, tired of wage restraint, are bargaining hard for new collective deals with days lost through strike action on the rise. This has added to the supply chain pressure being felt here in Australia on the back of COVID-19 and now fuel price hikes.

While collective agreement workforce coverage is relatively low by historical measures,  blue collar workforces dominate key industry sectors that are vital to the Australian economy including transport and logistics.

With a Federal election imminent, the opposition Labor Party’s industrial relations platform, which includes a promise to regulate more of the Australian workplace, will be cause for a re-think of workplace strategy for many, should it come to pass.

3. Risk over strategy

The regulatory burden for Australian employers has perhaps never been higher—or rather the risk of getting things wrong has never been more acute.

For Senior HR in Australia, the role is more than ever one of managing risk. The biggest shift in recent years has seen a more active regulator prosecuting and threatening to prosecute employers small and large for failure to comply with wage and hour obligations, often complex and ambiguous in their application. Large employers are devoting significant resources to reduce the potential for underpayment claims, while others have found themselves front page news courtesy of an active regular keen to make an example out of big brands.

Without detracting from the importance of compliance, the reality is that the absorption of such resources can come at the expense of other strategic initiatives.

4. Diversity is a strategy

One in four of Australia’s 22 million people were born overseas, and close to 50% have at least one parent who was born overseas. About 20% of Australians speak a language other than English at home.

This has flowed into the demographics of our workplaces, with about 13% of workers born in non-English speaking countries and 23% born overseas. More than half of working Australians have contact with people from a different cultural background through their working life.

Not surprisingly diversity remains a key feature on the agenda of larger employers in particular. But, and I generalize, gender diversity is main focus for many.

According to the Federal Government’s Gender Equality Agency, more than 85% of Australian employers with more than 100 employees pay men more than women on average, and while women make up 50% of the workforce, fewer than 20% are CEOs.

5. And so is “wellness”

Australia has robust workplace health and safety laws aimed at protecting workers. With a better understanding of mental health and impact of work, Australian employers, like many of their overseas counterparts, have looked at ways both proactive and reactive to help employees with their “wellness.” Some larger employers have a “wellness officer,” and many have programs that employees can access whose offerings and benefits transcend their work. In doing so, employers are effectively taking responsibility for the overall well-being of their people. In-turn, “employer of choice” programs promoting such initiates are fueling a generation of younger workers who come to expect more of their employer than previous generations could ever have imagined.

A recent manifestation of this is the quest for “hybrid working,” a luxury for those who can do their job virtually anywhere. Lockdowns in Australia (amongst the longest in the world) have seen work re-imagined, as has been the global experience. People value connection, but they also value the relative freedom of being able to work at home or elsewhere. The connection with “well-being” will make hybrid work hard for many employers to resist.

To understand more about the key issues that employers are grappling with in Australia, please reach out to the author, Chris Gardner, or any of Seyfarth’s market leading Australian Employment team.