Utilising latent labour to unlock Perth’s labour shortage perfect storm

  • Western Australia’s record low unemployment and ongoing closed borders have created significant labour challenges for many WA businesses.
  • New Committee for Perth research has identified latent labour as one of the solutions with part-time workers increasing their hours and those who are unemployed returning to work to plug the gap.
  • Skilled people are WA’s most valuable resource but are diminishing in supply as the State has experienced considerable growth in demand for workers since May 2020.

Committee for Perth Chief Executive Officer Marion Fulker AM said WA businesses were facing a perfect storm with unemployment rates the lowest in the country and existing border restrictions limiting access to interstate and overseas workers to WA.

Mrs Fulker said with the Covid variant Omicron now in the WA community, WA businesses were bracing for further disruption and were looking for short term labour solutions.

She said new research by the Committee showed one of the solutions was better utilisation of latent labour and those already in WA and Australia. Attracting offshore migrants will take time and is viewed as a mid to long term solution.

“We need to provide support to help and encourage people to return to work or to increase their hours to help address the labour crisis,” Mrs Fulker said.

“For example, some businesses may be able to offer flexible working hours and other incentives to encourage more people into work. Similarly better access to childcare will also assist parents with a greater opportunity to work.

“Following the State Government’s decision to keep the borders closed, we need to be thinking of different ways we can attract and retain workers. This is of particular importance to occupations with relevance to the construction, mining and healthcare sectors.”

Australian Bureau of Statistics data shows WA unemployment rate is currently 3.4 per cent, significantly lower than the national average of 4.2 per cent and the lowest in WA since December 2008.

The research is part of FACTBase Bulletin 78, the first of three papers to be delivered as part of the Race to the Top project.

Race to the Top examines current sources of labour supply in Western Australia, domestic and overseas, to identify where workers and skills are concentrated. This will include identifying factors that impact and the extent of the impact on labour supply including border restrictions, underemployment and education attainment.

The Committee for Perth’s latest FACTBase Bulletin shows the number of people retrenched in WA has fallen significantly from 70,800 in May 2020 to just 8000 in August 2021. Mrs Fulker said this represented the lowest number of workers being retrenched between 2014 and 2021. About half of those who lost their jobs in August had since been reemployed.

Mrs Fulker said the research bulletin had also found that cutting the time it took for skilled labour to find jobs in industries in which they were trained, and which were experiencing shortages, would also help business meet more immediate labour and skills needs.

Additional findings from FACTBase Bulletin 78 include:

  • More than one in five (21.5 per-cent) of Western Australian employers reported job vacancies in August 2021, with technician and trade roles experiencing significantly higher demand in Perth than other major Australian capital cities.
  • While the percentage of people who were not in the labour force and did not look for work has fallen over time, there is still a high proportion in people in this category in WA.
  • Since March 2020, WA had competed with other States for jobs at all skill levels. This competition was particularly intense for Skill Levels 1, 2 and 3. These are typically jobs requiring a Certificate III and above.

FACTBase Bulletin 78 informs the Committee for Perth’s 2021-2022 Race to the Top major research project which addresses immediate labour and skill shortages and prepare the workforce to meet industry demand over the next five years.