The data continues to show that during this period of inflation, workers are experiencing higher nominal wages, but they are not witnessing real wage gains. In layperson’s terms, that means that pay is not keeping up with higher prices. That said, there are some industries and markets where workers are making significant strides. One of those places is Australia, a country that has experienced significant talent drains ever since the start of the pandemic. Much of that talent deficit has to do with the country’s strict border requirements and lockdowns, which caused foreign talent to flee and cut off the constant stream of incoming talent. This has resulted in a job-rich, candidate-poor market across Australia, one that is especially acute in the advertising industry.
Australia’s talent crisis has lasted for more than a year, and this has emboldened talented people across the advertising industry. According to recruiters, the top firms are having to pay “staggering” salaries to make sure that their key people will not be poached by competitors. It is not uncommon for someone to join an agency, and then leave within a few months because they are offered 20,000 AUD more by a competitor. But this level of competition-induced employee turnover has also emboldened the not-so-talented. Even new or inexperienced people are demanding high salaries. Normally, such demands would be scoffed at, but firms have been forced to consider them because all of the experienced foreign talent is no longer in the country.
The Old and the New
It was not always this way in Australia. For many, a strong economy and an improving reputation meant that Australia became a melting pot. Instead of brain drain, it was a net brain importer, and the advertising industry was flush with talent. It used to be that candidates in the advertising industry would accept offers immediately, then stay at the firm they chose for many years. From an HR perspective, this was easy mode. Times have gotten tough. Nowadays, candidates have three or four offers on the table. They are not only looking for the best offer, but they are also expecting each firm to negotiate. Since it is an employee market, companies that are not willing to negotiate are losing out. If they are not willing to pay higher salaries to attract the best talent, they either do not end up finding anybody at all, or they end up finding people who are less qualified for the role.
This trend in the Australian advertising industry is a microcosm of the global labour market. So long as there are not massive recessions – although all signs point to major recessions in major economies coming very soon – this trend is likely to continue. Employers that want to stay competitive will either need to pay more or find other ways to stand out from the crowd. Few employers are able to offer something truly unique, so they have to get ready to stretch their salary budgets.