Natasha is a leading HR expert, entrepreneur, author and sought-after media commentator for outlets such as Sunrise (Channel 7), ABC Radio and The Australian Financial Review. Natasha co-founded Employee Matters in 2011 to help Australian businesses achieve success through their people.
We’ve been helping organisations across Australia with HR and Recruitment for well over a decade now, and if there’s one thing we’ve learned, it’s that not only are no two businesses the same, but understanding where they operate matters too. That’s why have local teams across Australia to ensure that we can deliver local knowledge for our clients.
In an increasingly globalised, digitised Australian economy, it’s common to think there’s a one-size-fits-all to professional solutions, but our experience (and client feedback) has shown us that this is not the case for effective HR solutions. Organisations that need the most assistance from us are often those overlooked by other outsourced-HR providers that don’t take a localised approach to understanding their customers and, in-turn, delivering bespoke services.
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If you’re a Victorian employer and you’re up at night wondering how to find and keep the best talent, how to drive engagement, and how to see real results from your workforce investments, then you’re not alone. In this article, we’ll cover some of the common HR and Recruitment challenges faced in Victoria, which call for local know-how.
HR & Recruitment Challenges in Melbourne and Across Victoria
Hiring and managing the best talent in Melbourne and across Victoria - in a timely manner - presents a dynamic mix of challenges, even as some indicators suggest a slight easing in hiring difficulties compared to previous years. Here's a breakdown of the key issues:
Skills Shortages and Talent Scarcity:
Persistent Demand for Skilled Workers: Despite a general easing in recruitment difficulty for lower-skilled roles, there's still a significant challenge in finding higher-skilled workers, particularly in niche sectors such as healthcare, tech, engineering and construction.
Regional Disparities: Workforce shortages are often more pronounced in regional Victoria compared to metropolitan Melbourne.
Future Workforce Needs: Victoria expects significant workforce growth in construction, healthcare and social assistance by 2027, with most new jobs requiring post-secondary qualifications, highlighting an ongoing need to develop and attract skilled talent.
Evolving Candidate Expectations:
Work-Life Balance and Flexibility: Candidates increasingly prioritise work-life balance, flexible work arrangements (including hybrid models) and overall employee well-being over traditional incentives like salary alone. Victorian businesses need to adapt their HR practices by offering comprehensive benefits and fostering a supportive culture.
Career Growth and Development: A lack of clear career growth opportunities is a significant driver of employee attrition. Employees are looking for training, upskilling and supportive leadership, emphasising the need for robust internal mobility programs and career-development pathways.
Economic Pressures and Cost-Cutting Measures:
Uncertain Economic Outlook: Organisations are facing predictions of sluggish growth, or at the least, an unpredictable near-term outlook, leading to cost-conscious hiring and HR strategies. This can result in less hiring of support positions and increased workload for existing leaders. It is important to note that as of June 2025, Victoria has the second-highest unemployment rate in Australia at 6.4%.
High Cost of Hiring: The average cost to hire a new employee in Australia is estimated to be around 50% to 150% of an employee’s base salary. With a significant number of new recruits leaving within their probation period, careful hiring decisions, a great onboarding programme and effective retention strategies are crucial.
Compliance and Regulatory Challenges:
ER / Workplace Legislation: An ambitious workplace legislative agenda and rising compliance burdens require businesses to stay abreast of a plethora of changes in employment law, including areas such as industrial relations and payroll remediation.
Hybrid and Remote Work Management: Navigating the complexities of hybrid and remote work environments, including fair work considerations and managing employee expectations, remain a challenge for leaders.
Importance of HR Execution and Strategy:
Moving from Tactical to Strategic: HR is increasingly expected to move beyond transactional tasks to a more strategic role, embedding data into overall decision-making and accelerating efficiency through technology. But in our experience, most businesses, unless they’re outsourcing their HR, are struggling to get the basics right as they manage competing priorities and often lack the internal experience or capacity to capitalise on the advantages that exceptional HR practices can deliver.
Leadership Development: Equipping leaders with the right skills, particularly in managing hybrid teams, employee well-being, and addressing underperformance, is vital for improving productivity and retention. This requires expert training, delivered in a timely manner.
Employee Engagement 2.0: Beyond traditional engagement, organisations need to focus on human-centred leadership by empowering employees, inviting input, and recognising the ‘whole person’ to drive loyalty and productivity.
While there are signs that recruitment challenges are easing in Victoria, particularly for lower-skilled roles, the market remains competitive for top talent, especially in specialised areas. That’s where HR professionals are presented with an opportunity and an ongoing challenge: the need to adapt to evolving candidate expectations, economic pressures, and technological advancements to attract, retain, and develop a productive workforce. Meeting this challenge can be the difference between a business thriving, or just surviving.
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Where to Start Addressing Your HR & Recruitment Challenges?
There’s no one-size-fits-all answer to establishing exceptional HR and Recruitment practices, especially given the need to also understand the unique requirements of any given geographic area. But there is a high-level decision that businesses need to make: do we ignore it all and hope for the best, try to do it ourselves and hope for the best, or get expert help?
If you’re a medium-sized business with between 50 and 500 FTE employees (or sometimes as high as 1,000 depending on your operations), then you may find that the best way to approach these challenges is to first ask yourself: “do we have the time and skills to set up and oversee these functions?”
If you think so, you may still want to use outsourced consulting to help you draw up, onboard and maintain your in-house HR or Recruitment function, and to help you deal with short-term challenges that require expertise and experience. In our experience, the most efficient Small and Medium-Sized operations find that the answer is “no - we’d rather focus on doing what we do best” which is where an outsourced service like Employee Matters comes in. We’ve been helping our clients meet their Employee Relations (ER) requirements to minimise risks, while also building an exceptional Employee Value Propositions (EVPs) to make sure their employees are their greatest asset, aligned with the business’ goals and driving their success.
For larger organisations with 1,000 FTE employees and above, it often makes sense to have some or all of your HR & Recruitment function in-house. Even then, we would recommend supplementing your in-house team with outside help during busy times, or to ensure that you are up-to-date with the latest Employee Relations legislation requirements in your region, especially if you operate across multiple regions.
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We’re Here to Help
Employee Matters has dedicated, local HR and Recruitment experts across Australia. Reach out today to speak with an experienced member of the Employee Matters team about your unique requirements, and to learn how our embedded HR and Recruitment Experts can solve problems faster, without the overheads of a permanent internal HR/Recruitment team:
There is a significant amount of mandatory Employment Relations legislative change that impacts you and every other business in Australia now. Our resource hub is designed to help you understand these wide-ranging changes.
Call us on (02) 8021 4206 or use the form below to tell us about your requirements and we’ll be in touch to guide you on which Employee Matters services are best for you:
