A shrinking talent pool

Human resource, Young businessman holding white billboard with a question mark on it and waiting for job interview,To say that Australia’s retail industry has benefited greatly from the 457 visa program is understated. Retailers here have long relied on the exposure and expertise of talent from abroad. So when the option to draw on international talent pools is taken away without warning, it is unsurprising that the government decision has left business leaders wondering ‘What on earth do we do now?’ and ‘Where will I find my talent?’

While it appears the changes are not yet set in stone, the nationalistic rhetoric and ‘closed borders’ sentiment have been met with much criticism, particularly when market conditions are already tough, Amazon’s arrival is imminent and local retailer operations are still trailing behind major international markets.

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Overhaul leaves retailers exposed

Although there is general consensus that the 457 visa program required an overhaul, the nature and immediacy of the changes have seen the business community question whether the government has fully considered the implications of such sweeping changes, without consultation or allowing for a reasonable transition period.

Many retailers are feeling extremely exposed by the changes in certain job categories, regardless of seniority, such as retail buyers (which includes merchandise planning), where there has been a constant stream of international talent making their way to Australia from countries like the UK, US and South Africa to supplement home grown talent. Broadly speaking, the level of experience and expertise we see in senior offshore candidates is rarely matched locally and it is that expertise, through upskilling of local talent, that has had a large hand in enabling Australian retailers to step up and compete on a global stage.

Australia’s big name retailers all have a significant contingent of international expertise within their ranks, many of whom have been credited with implementing transformation strategies that have led to remarkable turnarounds across the sector, such as Ian McLeod and John Durkan in supermarkets.

Closing borders to international talent

Whether it has been the government’s intention or not, cutting retail roles from the Skilled Occupations List has sent a message to the international retail community that Australia is no longer willing to look at international markets for talent.

By now, all retailers should have assessed their workforce and be acutely aware of who is on a 457 visa and directly affected by the changes, who is eligible to apply for Permanent Residency (PR) prior to March 2018 and who will not be permitted to remain in the country once their visa expires.

Knowing what’s at stake, some retailers are choosing to lobby the government to reinstate the occupation and also explore the role of company-specific Labour Agreements with the Department of Immigration. Long-term however, it has been made clear that international talent migration alone cannot be a viable solution to Australia’s retail talent.

The visa changes have highlighted the need to invest in and formalise local career pathways in retail, alongside international skills and knowledge transfer, recognising that we are a comparatively small retail market, and there is still much to be gained drawing on offshore talent. This is a good thing, without question, but the ‘all or nothing’ approach does not pave the way to achieving a good outcome.

So while retailers are quick to lobby the government, the industry needs to equally focus on working with Australia’s education and training institutions so that we create a professional pathway for local talent ­– a pathway that provides people with the core knowledge and understanding, which can then be applied in the workplace. This used to exist as internal training and development within countless retailers, but over time became seen as an ‘unnecessary cost’.

Meeting the changes and challenges head on

While there are a number of factors still at play and it is unclear exactly how the changes will impact retailers, we need to be ask ourselves: ‘How did we get into the position of being so reliant on international talent?’

Could it be that the government has done the industry a favour by bringing this issue into the spotlight, even if it has been done in haste and without consultation? While this is by no means a favourable situation for retailers to be in, it does highlight our dependence on international talent pools to the detriment of local talent development strategies. Until now, there has always been a ‘get-out-of-jail-free’ card for retailers to secure international talent.

But it’s important to recognise not all retailers are in the same situation. It is only those retailers that have preferred to or indeed had the capacity to find and fund offshore talent able to hit the ground running that will bear the brunt of changes. For those retailers that have continued to invest in developing and upskilling local talent as a priority, it will be business as usual.

In the recent budget, the government too has proposed a levy on businesses that have 457 colleagues within their structures, adding to the pain that retailers will already be feeling as a result of the changes.

Where to from here?

In the short-term, affected retailers will need to batten down the hatches, look at how to best manage skills transfer and retain talent through a competitive employee value proposition. Retaining talent must now be a key objective. As you would expect, candidates in a limited market become more demanding, and who could blame them for demanding better remuneration and benefits as well as a clear and transparent career path and opportunities?

Longer term, proactively addressing the talent shortage as individual retailers and as an industry through creating a viable local career pathway will be key to reversing the talent drain. At the same time, there is much to be gained engaging international talent. As a nation, we have always looked to other markets for best practice and talent migration is instrumental in that skills transfer to be globally competitive.

Whatever your opinion on why or how the Australian retail industry has landed in this situation, there is no quick fix for the impending talent shortage and it will take a concerted industry wide effort to get on track.


Richard Wynn is managing partner at FutureYou Executive Recruitment: richardwynn@future-you.com.au/0448 416 172.

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