The Australian technology industry is facing an employment crisis. The COVID border closures and a growing reliance on digital technologies has created a competitive market for tech workers, one where demand for roles such as computer engineers, programmers, developers and data professionals is on the rise; but the supply of talent through graduate and visa programs is not generating enough workers to meet the demand, making recruitment and retention of workers problematic.
The Hays Salary Guide Report FY21/22, a survey of nearly 3,500 organisations, revealed that 68% of the local technology industry is suffering from skills shortages. However, only 58% of the same cohort of local technology companies expected to increase their permanent headcount FY21/22, highlighting the skills shortage.
While the recent change of government came with a pledge from the Australian Labor Party to add 1.2 million workers into the technology sector by 2030, there still remains an 8-year skills shortage gap that will add pressure to an industry already experiencing high turnover and rising employment costs as workers find it easier to build their careers and salaries by chasing new job opportunities rather than dedicating themselves to a single company.
The Australia’s Tech Jobs Opportunity — Cracking the Code to Australia’s Best Jobs Report, produced by the Tech Council of Australia the peak industry body for Australia’s tech sector, found that the tech sector already pay nearly 32% more on an hourly basis and 64% more on a weekly basis in remuneration than the Australia-wide average, adding pressure on tech companies to consider non-cash benefits and rewards as part of their recruitment and retainment strategies.
With rising energy costs and interest rates dominating workers’ day-to-day lives, they’re looking to address cost of living pressures by seeking higher wages. If their current employer can’t meet their expectations, then there are others who are willing to step in and offer a more lucrative remuneration package.
But it’s not just cash that workers are after. Other benefits play an important role when seeking new working opportunities. The benefit identified as most important by employees in the Hays Salary Guide Report FY21/22 was Flexible Work Practices, which can include remote working opportunities, fluid working hours and additional annual leave.
The Best Jobs Report also found that the tech sector is more likely to adopt technology that provides workers with the flexibility of working from home at a higher rate than other industries, even before the pandemic. A third of all new workers hired since the pandemic by tech giant Atlassian, for example, are located at least two hours outside a major city.
While that can go a long way to meet the expectations of workers, for the tech sector, flexible working conditions such as remote working and variable working hours has become quite ubiquitous and does little to sway employees to either join a company or stay in their current roles. This is why tech companies need to find more innovative and meaningful benefits to compel employees to stay or join their payroll.
The pandemic has had an impact on reshaping remuneration packages to include working from home incentives such as allowances for items including: WIFI, IT equipment, office furniture, stationery and meals. But with cost of living pressures set to impact households in the near future, opportunities exist for employers to extend flexible working conditions to provide easier and earlier access to pay, allowing workers to break the monthly pay cycle and get their hands on their hard earned cash earlier.
For most workers, accessing their salaries early involves some sort of interest bearing, fee-ladened loan. Whether it’s payday lenders or begging their bank for an overdraft, early access to salary tends to happen outside their employment arrangement, creating risk and expense at a vulnerable point in their lives. The experience of living pay cycle to pay cycle is stressful and can impact the wellbeing and productivity of an employee.
And while pay on demand services like Beforepay have tried to address this by formally tying in borrowing capacity to the employee’s wage cycle, they remain a cumbersome and expensive option that carries considerable stress and risk to the employee.
Australian Fintech startup CashD has set about to change this by taking the need to access credit and replacing it with an early wage access (EWA) solution that provides a direct path to the cash that an employee has earned but is awaiting a date in the future to be paid into their bank account.
By integrating their platform with an employer’s payroll and HR systems, employees can gain controlled access to a portion of their accrued pay on a daily basis, without the need for loan contracts or the threats of defaulting repayments.
“We set about to change the way people are paid,” noted Founder and CEO, Marcus Lasarow. “Receiving early access to the salary you have already earned, doesn’t have to be a risky, nor an expensive process.”
Employers can offer an EWA service as a benefit that forms part of an extended remuneration package. As there are no contracts or lending involved, fees can be borne by the employer or shared with the employee depending on how remuneration packages are structured.
EWA solutions like CashD can also be seen as a wellbeing solution that can support the culture and financial health of employees. When financial stress is carried into the work environment, it manifests in distractions, absenteeism, reduced performance and ultimately employee turnover.
The confluence of rising inflation and interest rates, along with the growing skills shortage, means businesses need to find innovative and meaningful ways to entice workers, and an EWA arrangement is one way to solve this dilemma.
