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The Jobs Summit must deliver a solution for struggling food and hospitality businesses

Industry Insights

- This article was first published on Smart Company on August 30th -

Labour shortages are the biggest issue affecting hospitality and food businesses right now. However, these industries will not survive if the government does not seriously address migration caps in its upcoming Jobs and Skills Summit on September 1 and 2.

Hospitality and food businesses are hurting more than ever before and it’s largely due to a lack of employees. The production of food has been disrupted at every level of the supply chain due to staff shortages, all the way from farms to factories to issues with shipping. Disturbances are occurring at each and every checkpoint, delaying the production and delivery of products or preventing their sale altogether.

This sequence of events has a flow-on impact to the entire food industry, including hospitality and its consumers. Never before have we seen such disturbances in relation to food businesses.  

The last two years have tested business leaders in hospitality and food and it seems these challenges are here to stay. The food industry has never been an easy one, but in today’s climate it’s becoming impossible. Businesses are struggling to find workers, as unemployment in Australia hits a 50-year low. Hospitality and food businesses are being forced to close their doors, due to an inability to source staff, yet businesses across Australia have also recently laid off hundreds of staff.

So, how did it get to this and what can be done to enact change?

COVID-19 as a catalyst for economic downturn  

Australia is still feeling the effects of international border restrictions introduced during the pandemic, which saw tens of thousands of foreign workers leave our shores. These workers provided valuable skills and input into the national workforce, which is now reeling in the wake of their mass exodus. The combined effect of national workers out-of-action due to illness and less international staff has resulted in half a million jobs unfilled.

According to Corinna Economic Advisory, there were 224,000 less 15-34 year olds in Australia in May 2022 compared with March 2020. However, what many fail to realise is these young internationals fill valuable roles within the Australian workforce and economy. Farm work, hospitality positions, short-term roles and many other positions across the food and beverage industries rely on international workers.

Australia is now in a predicament where its local workers are either sick, fatigued or taking advantage of the globe’s open borders, yet international migration has nowhere near recovered since the pandemic. Likewise, skilled migrants are facing hefty delays to their visa applications which is worsening the hospitality skills crisis.

More than 56,000 skilled workers entered Australia in the last financial year on a temporary skill shortage visa, yet data from the federal government shows it’s taking between six months and two years to process visas for the families of skilled regional workers. As we’ve recently seen this creates major issues for many industries across the nation, add to that increasing inflation and our economy is at risk of grinding to a halt.

In the food business and tech world, we’re now seeing workplaces lay off hundreds to thousands of staff including Linktree, Shopify and Immutable, shedding employees at an alarming rate. Within our own business, Foodbomb, which intersects between both the food and tech industries, we’ve also had to make hard decisions to cut back and let valuable staff go.

For more than two years now food and hospitality businesses have been hanging on by a thread and it’s time to see some relief directed their way. It’s clear that greater government support is needed for struggling manufacturers, farmers and food and hospitality businesses to ensure irreversible damage is not done.

What do the food businesses need to survive?

As a first step, the Albanese government needs to significantly increase the migration cap in Australia from the current intake of 160,000. Though there are talks of doing so at this week’s Jobs Summit, action must be taken swiftly to assist with the recovery of Australia’s economy. Likewise, the processing time of visa applications for skilled migrants needs to be significantly improved.

Business groups across the health, trades, manufacturing, tech, hospitality and food industries are rallying for changes to be made this September at the summit. While official numbers are yet to be released, some reports have revealed that the number could increase somewhere between 180,000 to 200,000.

All eyes will be on Canberra next week, for immediate change and relief when it comes to jobs shortages. After all, this is the most fundamental step to ensure Aussie businesses across the board can continue operating effectively.

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