At a seaside restaurant in Sydney, Joe Natale can't get staff – and can't pay them more than the wages he's already raised.
"We've had to cap our bookings, we've had to eliminate takeaway. We've had to accommodate our business according to the staffing that we've got on," he says.
Mr Natale is weighing up if he needs to close one of his four venues in the Cronulla area, because the staff he's seeking want wages he can't offer.
"The number that people are throwing at the moment is $100,000. And … it's ridiculous."
For a chef without restaurant experience – "No knife skills. Probably spent a month or two in a cafe" – demands for six-figure wages are now standard.
Mr Natale's response is to offer a high wage, with training: "They've come back with, 'Hey, that's the going rate.'"
He's now paying some salaries nudging $90,000 annually. But even with nearly 90 staff on the books, Mr Natale was recently washing dishes on a Friday night after a kitchen hand walked out to a new gig offering $55 an hour plus penalty rates.
"It was just getting to a point where I was constantly getting asked on a weekly basis for more money, people coming in, people walking out, people getting poached by other operators," he says.
The bedlam — and potential for a wage spiral — is clear. Restaurants without staff can't open their doors.
"People are desperate. And they're doing anything just to be able to open their doors."
Wages going up
We'll know more about wages in November, when the Australian Bureau of Statistics (ABS) releases new wage price index or WPI data. Other indicators are already going up.
"The wage price index has risen 2.6 per cent over the past year," says Catherine Birch, a senior economist at bank ANZ.
"But if we look at average earnings per hour, that's risen by a much stronger 5 per cent over the past year. And that's more relevant for households because it's what workers are actually being paid."
There are a lot of reasons why average earnings are rising faster than the wage price index. People might be getting promotions or taking higher-paid jobs in other organisations.
"We're also seeing a rising share of workers in higher-paid occupations."
There's added complexity – wage rises aren't coming to people who remain in the same job.
Quit for more
It's sad but true. Staying where you are will probably cost you.
People are switching jobs at the highest rates since 2013. What's called 'job mobility' comes from annual data released back in February, but the hot labour market – with huge demand for workers – has super-charged it.
"People changing jobs is a big driver of wage growth," Ms Birch says.
"Because we've got such a high job vacancy rate at the moment, lots of businesses are competing for workers and it is easier for people to move into higher paying roles and occupations."
Staying put
Not all employers are paying more.
Fast food restaurant McDonalds launched a hiring blitz to find 14,000 workers across the nation, with an online game and days of 'on-the-spot' interviews for staff.
But after questions from the ABC, a McDonald’s Australia spokesperson confirmed it was not lifting wages above the levels set in the Fast Food Industry Award, a broad enterprise agreement.
"McDonald’s has thousands of jobs available for people of all ages and experience across the country, in crew, management, barista and maintenance roles," a statement read.
"As individual business owners, McDonald’s franchisees may choose to offer additional incentives to recruit people, including sign-on bonuses."
Sweet problem
Manufacturer Andrew Leakey has 720 staff, largely in regional Australia, making products like Maltesers chocolates and Extra chewing gum. It has on-site agreements at its factories, meaning wages and conditions are negotiated with employee representatives and unions in broad contracts that span years.
"We do tend to pay over the industry rates, which also helps us when it comes to being a great place to work," says Mr Leakey, the general manager of Mars Wrigley treats and snacks in Australia.
He says it's more than money.
"It's about wages. It's about training and development. It's about skills, it's about that sense of community.
"We have (relatives from) multiple generations working in all of our sites: going back (sometimes) three, four generations. So that tells us we're a good place to work."
The company hasn't been raising wages beyond what is set in its fixed agreements, but says it is only an element in how potential employees will decide where to work.
"It's a strong element. But certainly, as we're seeing people come to the workforce, the younger generation coming through, they want culture, they want progression, they want opportunity, they want development, and they want a purposeful organisation," Mr Leakey says.
"So, understanding what makes the heart of the organisation tick, and how we play in the communities and where we operate is as important".
The company has internal training programs and works with education providers in regional areas to build skills for future employees but wants to see more investment in training for modern manufacturing roles.
"It's not a problem you can fix tomorrow and say open borders and everything will fix it. It's about long term development of training skills," he says.
"If we can move that six months, 12 months and we see a significant change. I think it can make a tangible difference to where we are now."
Constructing growth
In many fields, the challenge of finding and retaining staff is a business problem that outweighs inflation, interest rates and global uncertainty.
For Alice Hanna, people and culture manager for Melbourne-based builder Kapitol Group, there's no avoiding that construction has to get better at attracting and retaining good people.
"Skilled migration will help short term, but there's a lot more work that needs to be done. That's not a silver bullet."
Kapitol Group has about 150 staff. Once you add in sub-contractors – workers with specific skills used on contracts – the number is closer to 500 people. And wages have soared.
"I think in construction we're probably offering 20 to 25 per cent more than we were three years ago. Obviously, with cost of everything else going up, as well as supply and demand issues, that's a really big squeeze on margins," she says.
At a certain point, money isn't enough, she adds. In addition to healthy wages, you need to create a safe, respectful and comfortable environment.
"You also have to give people really good career development opportunities," she says. "And they have to know that they are wanted, cared, heard, respected, and loved".
Those conditions will help businesses retain staff and attract the ones they need.
For staff looking for more money to combat rising inflation, there could be some good news there, too.
Growth coming
Catherine Birch from ANZ is looking forward to what the wage price index data tells us next month. Compared to similar nations – many of them facing the same or worse inflation – we're lagging.
"So, in the US, the comparable measure is at 5 per cent (annually) versus 2.6 per cent in Australia. In New Zealand, (wage growth) is up 3.4 per cent," she says.
With more jobs than workers, and Ms Birch tipping the unemployment rate to have a '2' in front of it by early 2023, expect competition and new agreements at big employers to force wages up.
"By the end of next year, we could see wage growth closer to 4 per cent than 3 per cent"
That means that even workers who stay put should see their wages go up more quickly.
Crunch point
In Cronulla, Joe Natale is running at a loss. His ballooning wages bill is on top of cost increases for ingredients and other unavoidable costs like power.
He can't find staff, even as he offers massively boosted wages that threaten the viability of the business. The chefs he has are working twice as hard, covering shifts and tasks others would normally do.
"I'm not the only one in this predicament. This is across the board," he says.
"A main [meal] that costs around $30 should realistically be priced around $55, but with interest rate hikes and competition that's not possible.
"Because I'm at a point where there are days I don't enjoy, I don't love coming to work. Because I'm having to confront the staff shortages, the predicament of increases of prices.
"It's not sustainable. I don't know how long we're going to keep it going for."
