Article | Evolving Workforces

The missing workers threatening Australia’s economic recovery

May 4, 2021

By Raymond Tran Rosie Young

The missing workers threatening Australia’s economic recovery
The barista at your local coffee shop, the maître d’ at your favourite restaurant, the guitarist in your local bar's band, the resident IT helpdesk support who you contact at least twice a week.

What’s the common theme these occupations shared prior to COVID-19? 

Up to 1 in 4 of these workers were likely to be foreign students, backpackers, or transient international visitors, here in Australia in search of a new life or perhaps passing by on a gap year. 
Fast forward to 2021 and the challenge for many businesses is how to adapt to a very different workforce dynamic.

For, while the national economy is emerging in far better shape than originally anticipated, there is no longer a large pool of overseas students able to balance their studies with 40 hours of work each fortnight.

Border closures and continued uncertainties around the COVID-19 pandemic have also removed a large chunk of the casual workforce linked to the backpackers and travellers from 44 countries able to work and holiday in Australia.

Whilst everyone accepts the difficult balancing act State and Federal leaders face to ensure that COVID related health risks are mitigated, there is an increasing urgency to address the acute skilled and unskilled labour shortages that threaten Australia’s continued economic recovery. 

In March 2021, there were 230 temporary student visa arrivals and 160 temporary work visa arrivals for the whole of Australia. This represents a decline of 99.7% and 99.3% respectively from March 2019 to March 2020.

This is against a backdrop where job advertisements are currently running at a 12-year high, with a 13.7% increase in February 2021 alone, according to the latest ABS data. 

It also coincides with government stimulus packages, such as half price airline ticket offers, and signs of a green shoots recovery in the tourism and hospitality sectors – a recovery at risk of being hindered by growing skills shortages in both capital cities and regional areas.

Tourism and hospitality are not the only sectors feeling the pain. The agriculture industry - ranging from fruit picking in Coffs Harbour through to the fishery greenhorns in Australia’s seafood capital of Port Lincoln - are also feeling the pinch.

All of these professions, which were once a magnet for young, nomadic millennials prepared to take-on less desirable, low income work, have now become a topic of national importance for the greater Australian economy – to the extent that special dispensation was provided to chartered flights of Pacific Islanders flown in directly to address the country’s fruit picker shortage. 

There have also been renewed calls from the resources sector in Western Australia, backed by the  Australian Chamber of Commerce and Industry, citing the need to fulfil semi-skilled, unskilled and skilled labour roles, particularly in regional localities, which were once fulfilled by international students and working holiday makers. 

Beyond their labour roles, these workers and their ancillary spending in remote regional towns - be it at the local youth hostel or on the $5 coffee & muffin combo deal from the local café - have played a critical role in keeping the wheels of Australia's economic engine turning.

However, without prompt action, there is a risk that Australia will lose out to more proactive countries in the fight for labour. This has been evidenced by New Zealand’s recent announcement that it will lift working hours permitted for Working Holiday Maker visas from 20 to 40 hours per week, to coincide with the commencement of the Australia/New Zealand bubble.

Amid these challenges, there is also a need for industries that house and support Australia’s transient worker population to adapt in the interim to support the “new normal”.

In the PBSA (Purpose Built Student Accommodation) sphere, operators are continuing to lobby State & Federal Governments to be able to temporarily re-position existing properties to either allow occupation by non-students or to be used as an extension to hotel quarantine.

The NSW State government is now calling for PBSA operators with suitable quarantine capabilities to be able to handle a volume of 600 rooms weekly.

Owners and operators of youth hostels, student accommodation and co-living properties are also increasingly looking at more innovative solutions to ensure their properties remain functionally and economically viable.

An example is the recently announced partnership between YHA Australia and Atlassian, based on a vision that the modern-day, tech savvy traveller or "digital nomad" will be drawn to the YHA's new 'tech hub' in Sydney, which shares a neighbourhood footprint with Atlassian's Central Station "Tech Central" precinct.

As well as accommodating regular tourists and the "flashpacker" (flashy backpacker), projects like this have the potential to accommodate Australia’s next generation of innovators and tech talent, creating Sydney's own post COVID, Silicon Valley catchment in the Central and Chippendale areas.

They will also be critical to driving Australia’s post COVID recovery, coupled with a much needed government focus on supporting Australia’s transient worker population.