Australia’s economy suffers from $180B Covid border closures – as skills shortages mean bosses struggle to find staff
- The findings come from a new study by RMIT Online and Deloitte Access Economics
- The drop in skilled migration means 380,000 fewer people have entered the labor market
- This has cost the economy $32 billion, without the pandemic $148 billion would have grown
- Border closures are cited by 1/4 of employers as the main obstacle to attracting new employees
Closed international borders in response to the COVID-19 pandemic and a sharp drop in skilled migration have resulted in 380,000 fewer people entering the labor market, costing the Australian economy $32 billion.
These findings, from a new study by RMIT Online and Deloitte Access Economics, also calculate that Australia’s economic growth could have grown by an additional $148 billion had it not been for the impact of the pandemic.
“The closure of international borders has effectively halted Australia’s migration and exacerbated Australia’s talent shortage,” the study published on Tuesday shows.
Closed international borders in response to the COVID-19 pandemic and a sharp drop in skilled migration have resulted in 380,000 fewer people entering the labor market
It also warns that the impact of closing Australia’s international borders is not a temporary setback and, without action, the economy will be permanently smaller than it otherwise would have been without COVID-19.
“This means going back to pre-pandemic trends is not enough. Instead, even stronger growth is needed to offset the losses incurred during the pandemic.
Border closures were cited by a quarter of employers as one of the main obstacles to recruiting new employees.
A survey of 413 company directors and 1,040 employees from medium and large companies across several Australian sectors found that more than half of Australian workers have taken steps to change their current employment.
“It’s no secret that employers across Australia are struggling to find great people with the right skills,” said Helen Souness, CEO of RMIT Online.
“In some industries, like tech, big companies are raising salaries to attract talent and making it even harder for smaller companies and startups to hire. We need to improve education and open borders to change this situation.”
“The closure of international borders has effectively halted Australia’s migration and exacerbated Australia’s talent shortage,” the study published on Tuesday shows
But employers are optimistic their employees won’t leave, with a third of companies expecting six to 10 percent will switch and a quarter expecting 11 to 20 percent to go elsewhere.
Almost three in four employers surveyed found it difficult to attract new employees, with 27 percent citing border closures as the most common obstacle.
Additionally, employees who are looking for their dream career (26 percent) and have extremely high standards for work-life balance (24 percent) have created significant barriers to attracting new hires.
Research shows that digital skills are becoming increasingly important in all work areas.
Analysis of job advertisements in 2021 revealed that these skills were the third most in-demand skills, behind customer service and project management and ahead of core areas such as sales, budget management and business processes.
“Upskilling will play a critical role in closing the skills gap,” said John O’Mahony, Partner at Deloitte Access Economics.
“Employers expect to spend more on learning over the next year, and employees appreciate that investment, with many noting that it’s a sign their employers want to invest in them and care about their development. “
Border closures were cited by a quarter of employers as one of the main obstacles to recruiting new employees
