Australia markets closed

    +15.40 (+0.21%)
  • ASX 200

    +17.70 (+0.24%)

    -0.0014 (-0.20%)
  • OIL

    -1.66 (-2.13%)
  • GOLD

    +8.40 (+0.48%)

    -249.21 (-1.01%)
  • CMC Crypto 200

    +4.32 (+1.13%)

    +0.0004 (+0.06%)

    -0.0001 (-0.01%)
  • NZX 50

    +60.85 (+0.54%)

    -82.68 (-0.70%)
  • FTSE

    +20.07 (+0.27%)
  • Dow Jones

    +152.97 (+0.45%)
  • DAX

    +1.82 (+0.01%)
  • Hang Seng

    -87.32 (-0.49%)
  • NIKKEI 225

    -100.06 (-0.35%)

$45 an hour, cash, for farm work: No end in sight for labour shortages

Workers crossing street in central Sydney.
There is now officially one vacant position for every unemployed worker. (Source: Getty)

Brett Bugg never used to have much trouble finding staff to work at his three IGA grocery stores in northern New South Wales and South-East Queensland.

He used to be inundated with applicants looking for work. But now, due to the chronic labour shortages gripping the nation, he’s lucky to get more than one response to a job ad.

In one of his new stores, Bugg recently advertised for four different positions. The ads attracted five applicants over four weeks.

“And of those five applicants, pretty much none are suitable because of the hours that they're restrained to work,” Bugg said.

“So we've got four jobs going there and no one really to fill them.”

He also owns a commercial farm, where attracting workers has been near impossible. He’s been looking for 18 months and not managed to find anyone on a permanent basis.

“The labour shortage in that industry is so huge that people were just travelling from one position to another position for money,” Bugg said.

Farm workers team harvesting fresh vegetables.
Attracting workers for his farm was never a problem for Brett Bugg. (Source: Getty)

He said some farm labourers had offered their services for $45 an hour, cash in hand, which Bugg was unable to afford. He said these workers would likely move on to another farm willing to pay this rate.

The lack of short-term visa holders in the country was playing a role but Bugg said farm labourers were also being snapped up by higher-paying industries, such as civil construction.

In construction, which is also struggling to fill positions, Bugg said they were able to offer three times the amount most farmers were able to pay.

Bugg had heard of truck drivers getting paid as much as $120,000 a year by construction companies.

Labour shortages across the board

Bugg’s situation is not unusual. Australia’s unemployment rate is now sitting at 3.5 per cent - the lowest it’s been since the 1970s.

According to the Australian Bureau of Statistics, there is now officially one vacant position for every unemployed person.

While there was a small decline in job ad postings in every state and territory in the latest SEEK employment report on a month-by-month basis, there was still a massive 23 per cent increase in job advertisements compared to June last year.

It’s been tricky to attract and retain staff - both entry-level and skilled - across most industries.

One chicken shop in South Hedland in Western Australia recently posted a job ad offering to pay a store manager a $130,000 salary.

The West Australian fast-food chain Chicken Treat was also willing to make the position a fly-in-fly-out (FIFO) role, a condition typically reserved for high-paid mining jobs.

In Kingscliff in NSW, a baker has offered a daily supply of sourdough bread to whoever can find him a baker who will stick around long term.

In the consultancy space, firms have put on corporate festivals to keep their young staff happy.

Salaries have also ballooned, including for grad jobs. A recent report by The Aussie Corporate on junior salaries found starting salaries over $100,000 had become fairly standard, especially in finance, with one trading firm, Optiver, dishing out $250,000 for an entry-level role.

Small companies are even taking aim at bigger firms that are poaching their staff. After losing seven employees to larger firms, Platinum Accounting CEO Coco Hou floated the idea of big companies paying a transfer fee if they hired their staff to account for the training and development put into that worker.

“This kind of approach works in the sporting environment, maybe we need to consider this type of arrangement in the accounting sector,” Hou told Accountants Daily.

What employers can do to keep workers happy

Damien Andreasen, ANZ country manager at HR software company HiBob, said recruitment had become one of the toughest challenges facing Australian businesses.

“A record-low unemployment rate is great news for the people of Australia, but it may not be as well-received by businesses,” Andreasen said.

He said businesses should be doing everything they could to retain staff because it was a lot easier - and cheaper - than replacing them.

Recent research by the company showed flexibility and work-life balance were the two biggest things employees cared about.

Money clearly also plays a role. A recent report from Hays found most employers planned on increasing staff salaries, but the bulk of employers expected bigger pay rises than their bosses were likely to dish out.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.