Businesses Boost Pay and Conditions to Lure Scarce Talent

The findings, contained in Business NSW’s State of Skills 2024 report, have prompted calls for the Federal Government to accelerate the number of skilled visas and reverse planned cuts to international students. 

The report from NSW’s peak business group reveals 77 per cent of NSW employers are still facing significant skills shortages, down from 93 per cent in 2022 but still above 51 per cent in 2019 (pre-pandemic). 

Business NSW CEO Daniel Hunter said finding the right workers remained incredibly challenging for businesses. 

“Businesses are bending over backwards to hire and retain staff and that is being reflected in greater wages and better conditions,” Mr Hunter said. 

“To stay ahead, businesses are not only paying a premium but also innovating their approach, with 80 per cent boosting pay or improving conditions. 

“This trend reflects the intense pressure to adapt and secure skilled workers. Businesses are in a lose-lose for workers: they can’t afford to hire people they need and there is not the pool of people to hire from.” 

More than a quarter of employers (28 per cent) reported that they had made five or more attempts to recruit for a given role in the past 12 months.

“The Federal Government’s decision to try and cut the number of international students in 2025 will make things much worse, like we saw during COVID,” Mr Hunter said. 

“The Federal Government needs to accelerate the number of skills visas. We must ensure filling skills shortages is data-driven not politics driven.” 

Mr Hunter said 36 per cent of employers in shortage were relying on contractors and external service providers to bridge the gap, while others had resorted to getting ‘back on the tools’. 

The report also revealed a greater reliance on remote workers. 

Business NSW is calling on the government to: 

• Ensure access to vocational education in regional NSW, with incentives for local, innovative solutions via a Regional Skills Fund.
• Speed up visa processing and prioritise regional skilled visas to meet urgent sector needs, particularly in energy and agriculture.
• Collaborate with SMEs to create VET programs that meet industry needs and involve employers in training and development. 

Key findings from the report include: 

Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826. They represent almost 50,000 businesses.