In today’s ever-evolving business landscape, Australian employers are encountering a significant challenge – a shortage of local talent to meet their specific needs. This issue is exacerbated by rising costs and a limited supply of skilled workers in every sector, including hospitality recruitment in Australia, prompting many companies to explore global markets to bridge the talent gap.
Business growth and success invariably entail expanding the workforce, and for many Australian companies, this means casting a wider net internationally to achieve optimal results. Therefore, Australian companies are increasingly looking to countries like India, Costa Rica, and the Philippines for cost-effective hiring solutions.
Yet, navigating the global hiring process can be a perplexing challenge for many Australian businesses.
Understanding the Australian Talent Shortage
Why are Australian companies turning to foreign workers for help? Here are some reasons why that explain why Australia is facing the global talent shortage head-on:
Skills Shortages
The Australian workforce is increasingly finding it difficult to locate qualified employees. According to ABS data, over 31% of businesses report difficulty in finding suitable workers for their vacancies. One primary reason cited is that many applicants lack the requisite skills for the job, and there seems to be an overall shortage of job seekers. It’s crucial to note that these shortages affect every industry in the Australian market, disrupting production and supply chains across the board.
Impacted Industries
While most sectors feel the hiring pinch, some are hit harder than others. These include hospitality and tourism, trades, healthcare, manufacturing, and technology. For companies in Australia, hiring foreign workers presents a realistic solution to address the shortages in these struggling industries. Each of these sectors faces its unique challenges, from pandemic-related staffing shortages to limited talent pools. Jobs are available, but finding the right people is highly competitive.
Cost of Local Workers
It’s not hard for Australians to secure a job, but the hiring challenge primarily rests with employers. Instead of competing for limited local talent at higher costs, Australia’s leading recruitment agency is exploring the global landscape for its hiring solutions.
How Companies in Australia are Hiring Foreign Workers?
When it comes to companies in Australia hiring foreign workers, they have three primary methods at their disposal:
Establish a Legal Entity
Expanding your operations to another country, regardless of whether you plan to hire full- or part-time employees, necessitates the establishment of a legal entity. It’s crucial to remember that each country has its own set of regulations and incorporation requirements, and failing to comply can lead to expensive fines and legal repercussions. Establishing a legal entity is a suitable choice for businesses looking to make a long-term commitment and investment in a specific country. Typically, this implies a deep understanding of the local workforce and confidence in building a team there.
Hire Foreign Contractors
The only option that doesn’t require establishing a legal entity is hiring international contractors. However, it’s essential to understand that by engaging overseas contractors, you relinquish control over the management process. Contractors have autonomy over their schedules and timelines, making them less accountable to your deadlines.
Furthermore, hiring contractors doesn’t absolve businesses from compliance responsibilities. Even with contractors, laws exist to safeguard their rights.
In most countries, these laws stipulate that contractors can work for multiple companies simultaneously, control their work status and schedule, and work for shorter durations with a single company to avoid being classified as employees. Adhering to these guidelines and researching specific regulations for the country of operation is imperative. Even minor classification errors can result in costly fines, tax penalties, or lawsuits.
Employer of Record (EOR)
Given the risks associated with contractors and the complexities of establishing a legal entity, many Australian companies hiring foreign workers opt to collaborate with an Employer of Record (EOR) provider.
An EOR is an organisation that assumes legal responsibility for international employees, managing HR, payroll, accounting, and other administrative tasks. This streamlines the hiring process, ensuring your business remains compliant during international workforce expansion. EOR services encompass hiring full- or part-time employees, providing healthcare benefits, executing compliant payroll, creating employment contracts, and handling accounting and tax matters. EORs empower businesses to hire employees in foreign countries without establishing their own legal entity. While the EOR manages the administrative burden, your company retains control over the day-to-day assignments of skilled workers.
Why do Australian Companies Prefer to Work With Recruitment Agencies?
Different companies have varied needs and challenges. While establishing a legal entity may work for some, most lean towards partnering with a recruitment agency, and here are three compelling benefits:
Fast Hiring
Waiting for a legal entity to be established or finding a dependable international contractor can be time-consuming. Partnering with Australia’s leading recruitment agency enables you to tap into an existing network of legal entities worldwide, allowing you to recruit and hire highly qualified candidates within weeks. Your operations don’t need to slow down due to the absence of a legal entity or the dwindling availability of Australian workers.
Compliance
Operating in another country entails risks, particularly given the frequent updates and changes in employment laws. Recruitment agencies relieve the burden of managing legal and tax requirements, allowing you to focus on other growth initiatives. While administrative responsibilities and liabilities mostly fall on the agencies, your business maintains full control over the daily work of international employees, offering peace of mind for your global operations.
Cost
Initially, the idea of companies seeking hospitality recruitment in Australia may seem counterintuitive. An agency allows businesses to test new markets without heavy investment in establishing a legal entity. It provides the opportunity to ascertain market and workforce viability, eventually transitioning to their legal entity if the venture proves successful. In the long run, this approach saves both time and money for companies.
Summing Up
Australian companies are facing a talent shortage, and hiring foreign workers is becoming an increasingly viable solution to address this issue. Whether you choose to establish a legal entity, hire foreign contractors, or partner with an Employer of Record, understanding the options and their respective advantages and challenges is essential to making an informed decision for your business’s international hiring needs.
New Beginning Skills offers a comprehensive solution to recruit, hire, and manage global employees. We handle all complexities, allowing you to focus on scaling your business efficiently. Connect with us today to learn how we can help your company successfully navigate the Australian workforce shortages.
