The impact of labour shortages on the cleaning and maintenance industry

Over the last couple of years, the Australian labour market has been going through a severe labour shortage due to many macro and microeconomic factors.

While The Guardian recently reported that unemployment rates in Australia dropped to the lowest levels since 1974, experts have said that the major contributor to this drop in unemployment rate is not the creation of jobs, but rather the shortage of skilled workers in already existing jobs.

Businesses across industries have been impacted heavily by these shortages and the cleaning and maintenance industry is no exception. The industry is currently experiencing its worst labour shortage, which has resulted in disruptions to service delivery for many companies.

What could these labour shortages mean for you if you’re looking to or have already contracted cleaning and maintenance companies to work on your property?

The reasons for the labour shortage

Before exploring the impacts of this once-in-a-generation labour shortage, it’s important to understand how the industry found itself here in the first place.

• Repatriation of foreign workers

The beginning of these labour shortages can be traced back to the start of the COVID-19 pandemic and the resulting border closures enforced by the government.

The majority of the labour force is composed of international workers—students, in particular—and the border closures forced most of them to repatriate to their home countries, creating a major labour shortage in the industry.

While many countries opened up their borders promptly, the extended border closures in Australia only added to the already growing labour shortage in the country—extending the effect of these shortages.

• Cleaners and maintenance workers relocating to regional areas

It’s not surprising that the majority of cleaning and maintenance companies are based in urban and suburban areas, as that’s where the highest concentration of the population resides.

But, because of the high costs of living in these areas and the pull of high wages elsewhere in recent months, many cleaning and maintenance workers have chosen to relocate to regional areas and take up other job roles to support their lifestyles.

The emergence of similar jobs in regional areas has also contributed to this mass relocation of potential cleaning and maintenance workers.

• Fast-tracking visa scheme for other jobs

The fast-tracking programme introduced to accelerate the visa process for applicants applying under Temporary Skill Shortage, Skilled Employer Sponsored Regional, Employer Nomination Scheme,​ and Regional Sponsored Migration Scheme visas has also contributed to the labour shortage in the industry.

While this helped alleviate the skill shortages in jobs on the PMSOL list, it has extended the visa processing times of other visa applicants, including cleaning and maintenance workers.

• Relaxing of rules to allow international student workers to work for more hours

Due to the labour shortages in other industries, in May 2021 the Government relaxed the employment rules for international student workers to work more hours in selected industries such as agriculture, food processing, healthcare, aged and disability care, and child care. Up and until January 2022 this relaxation did not apply to the cleaning industry.

This means that many student workers who worked in the cleaning industry in 2021 could earn more by switching to other industries that allow for longer work hours—and many have seized this opportunity, leaving the cleaning and maintenance industry with a severe shortage of workers.

What has hurt the industry even more is the dip in international students arriving in Australia. This has created a situation where the industry is losing existing workers at a rapid pace as well as struggling to find new workers to replace them.

What does this mean for you?

For starters, this severe labour shortage has presented a unique challenge for the cleaning industry; it has increased wage competition in the labour market, increasing wages not only for recruits but also for existing cleaning and maintenance workers.

These increases in wages will be reflected in the prices of cleaning and maintenance services as cleaning companies need to compensate for the increased cost base with their prices.

The labour shortage may also lead to a disruption in service delivery, which can increase demand for cleaning and maintenance services and drive up prices further.

Given the nature of the factors that led to this set of circumstances, it is likely that challenges will persist until favourable situations return and the labour shortages are sustainably resolved.

Contact Accord for further information

If you’d like to learn more about the prevailing condition in the industry and how it has impacted the availability and prices of building management and facilities management services, don’t hesitate to get in touch with our team at Accord.