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23 May 2019

The workforce challenges of rural and regional Australia

Small businesses in rural and regional areas have a lot to contend with right now. Ongoing drought conditions have taken a heavy toll, not only on farmers, but also on the wider community. As if that isn’t enough, small businesses are also in the midst of a workforce shortage.

Meeting the skills and labour needs of rural and regional Australia is about having the right people with the right skills in the right place at the right time. Achieving this is a balancing act for all employers.

Contrary to popular belief, job vacancy growth in our regions is outstripping the growth experienced in cities. According to Regional Australia Institute data, job vacancies in regions have grown by about 20% since 2016 – compared to just 10% in large cities.

It’s not just farm work that’s available. A variety of occupations are in demand, from low skilled and entry level roles through to health and personal care, trades and professional occupations.

One of the biggest challenges for small businesses is attracting skilled workers, which requires a three pronged approach:

  • upskilling the locals with the skills needed by employers in their region
  • encouraging more people to move to regional and rural areas
  • accessing skilled migrants to fill gaps when local workers are not available.

Education and training is key to upskilling the local population. Early school leavers, unemployed young people, Indigenous Australians, people with disabilities and mature aged Australians are looking for work, but lack the skills employers need. There is an obvious need for ongoing training, support and mentoring within these people transition to sustainable employment. It should be said that online courses are not necessarily the answer to this issue. When it comes to quality vocational training, both State and Federal Governments need to work together to provide a range of supportive learning environments, including classrooms and teachers.

Taking on a new employee is a significant investment for a small business. The investment becomes a significant risk if they employ someone who doesn’t have the skills and experience to match the needs of their business.

Upskilling an employee takes time and money – in determining relevant qualifications requirements, and who is best placed in their area to provide the appropriate training and get the best results. Businesses also need access to incentives, to help them defray the cost of training.

For example, if a small town pharmacy wants to train a new staff member in a front-of-shop role, who provides basic advice to customers, they need to consider a raft of education pathways including whether the training results in a qualification – up to five certificate choices - and if they are eligible for any subsidies or employment incentives.

And while it is essential to promote local jobs, when local workers can’t meet the needs of employers, migrant workers should be recognised as an important, viable option for small business.

Initiatives like the Pacific Labour Scheme, the Regional Sponsored Migration Scheme and changes to the regional occupations skills list help employers in the regional Australia get access to workers and bolster their workforce in times of peak demand, like crop harvest or peak tourist season.

But it’s not cheap or easy. Recruitment costs, application fees, the Skilling Australia Fund Levy, employer supported travel and health insurance all add to the cost of employing an overseas worker.

Certainly more can be done in this space by policy-makers to smooth out this process and make it more cost effective for small businesses to engage in.

Unfortunately, for many years these issues have been considered by separate agencies and levels of government and policy solutions have not addressed the broader problem.

There is a clear need for a coherent and holistic regional employment and training policy that brings together all of the relevant players to discuss regional infrastructure, education policy, workforce participation strategies and targeted migration policies to can get appropriately skilled workers out to the regions where they are most needed.

Investing in change to address the needs of employers in regional Australia will create vibrant communities that will ultimately provide the career options, social activities and amenities to attract skilled workers outside the city limits.