Aug 2021

Border closure equals higher labour costs. What you need to do now.

By: Odyssey General, Outsourcing
Tags: COVID19, labour shortage

Closed borders could be an ongoing issue and this is likely to drive up wages. At the same time, many companies are moving quickly to implement technology to reduce costs and reliance on high cost labour.

The RBA recently indicated the border could remain closed for up to two years, which means changes to labour shortages won’t be changing for many years.

If the border continues to be closed, there will continue to be an ongoing shortage of workers, and employers will eventually have to offer higher wages or better conditions (or both) to attract scarce workers away from their rivals. However, at the same time, it’s difficult for new businesses to open when there is a labour shortage which can’t be filled by overseas (temporary or skilled) workers.

Closed borders mean increases in wages, as has been discussed online for the past several months.  And adding an occupation, like accounting, to the skilled migrant program doesn’t affect the supply when there is a reduction in flights into Australia.

Interestingly the AstraZeneca vaccine has not been approved by the US, which means there may be issues for people travelling to the US if they have a vaccine that isn’t recognised by the US. Similar to Australia, the US is shipping the AstraZeneca vaccine overseas. So it seems there will be ongoing issues with governments accepting vaccines used in other countries. This doesn’t bode well for the rapid opening of air travel again. Even if air travel does start, there is going to be an issue with the acceptance of vaccines.

With the indications that Australia won’t be opening up the labour import for at least 2 years, it is those companies moving to implementing technology to reduce reliance on high cost labour that will be in a stronger position. That technology includes the ability to allow workers to operate from anywhere in the world, giving these companies the ability to access more cost effective labour from offshore. If you’d like assistance with outsourcing drop us a line.

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