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Edition 85 – Labour Pool

If yours is a family business that works in any trades based area, you’ll need to listen up.

A number of businesses that I know in the building and construction industry are struggling to find staff at the moment. In a growing economy. With 5.7% unemployment.

They’re advertising, but getting little interest. Or if there is interest, it’s coming with highly inflated salary demands, up to 30% higher than what these businesses are willing to pay!

Around six or seven years ago, these businesses faced these pressures as a result of Australia’s mining boom. The big miners in Western Australia and Queensland waved monstrous salary packages at anyone who was willing to don high vis gear and get dirty. As we know, the boom went bust, common sense returned and so did some of those that saw big paydays in mining.

This time around, it is different. Wildly different. Not only that, I believe we’re heading for a big structural change in blue collar employment, particularly in Sydney and Melbourne and here’s why. It is expensive to live in Sydney and Melbourne. The median house price in Sydney, a city of 5 million people, that stretches 70km from Bondi to the Blue Mountains, is more than $1 million.

Why is this a structural change? Simply because if business owners in these industries don’t start thinking differently, the issue won’t be the inability to recruit new staff, but the inability to hold current staff and by its very connection, the survival of those businesses.

With that in mind, here’s some questions you need to be asking yourself if you’re operating a trades based business:

  1. Will my team demand higher wages?
  2. If they do, can our business afford to pay them?
  3. Will my team be willing to travel long distances to work because they can no longer afford to live in the Sydney and Melbourne metropolitan areas?
  4. Will I need to consider more flexible working arrangements for my staff so they’re not spending every week day working or transiting?
  5. Am I doing enough now to employ apprentices, build them up and secure skills whilst they still live with their parents?
  6. Will I need to relocate my own business to an area where there is an available pool of trades based employees?
  7. What am I doing in my business to make it an attractive employment proposition for employees – and compete against bigger players who can easily waive around more dollars?
  8. Will I need to get creative about non salary based remuneration to make it attractive for candidates to consider my business?
  9. Will I need to consider offering annual leave in excess of four weeks per annum to differentiate myself in the marketplace?
  10. Is there some element of the work that we do in my business that can be undertaken by technology or some mechanical operation?
  11. Will we need to fundamentally change the process of how we do, what we do, to overcome a future skills shortage?

Trades based businesses are facing a monumental challenge in the next five years to answer these questions before the tsunami hits. For these businesses, this requires a completely different mindset to solve the impending crisis.

Professional based businesses have partly solved these problems by using technology to recruit workers – either those that are home based, or by offshoring parts of their operations. By the very nature of the work undertaken by trades based businesses, you’ll need workers on site to perform the tasks. Or maybe you won’t?

This Week’s Tip

It’s time to get thinking about what you need to do today to solve tomorrow’s problem, before your business becomes as relevant as yesterday