Prices could be on the rise in Tamworth, with businesses struggling with production costs that have increased following yesterday's minimum wage increase.
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With most businesses still struggling to overcome labour shortages many said they could not afford to slash staff for savings, with their only option to pass costs onto consumers.
CEO of Central Hospitality Group, Jye Segboer, said it's getting more and more expensive to keep the doors open.
"We don't want to compromise anything we do in terms of our staffing numbers or service to our customers, but ultimately we are going to have to have a serious evaluation," he said.
"We've got until October to start evaluating how we're going to pivot our business towards meeting those increased costs."
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The Fair Work Commission on Wednesday announced a decision to increase the minimum wage by 5.2 per cent for the nation's poorest-paid employees.
The increase will kick in from July 1.
However, the rise changes little for many local businesses struggling to find enough staff.
Regional manager of New England and the North West for Business NSW, Joe Townsend, said the situation extends throughout the entire region.
He said businesses need to account for the increasing cost of transport, fuel, energy, and rent due to an increased inflation rate.
"These increased staff costs have just added to the fuel at the moment," he said.
President of the Tamworth Business Chamber, Stephanie Cameron, said skilled workers are particularly difficult to find, and most business have been left with increasing the cost of their products and services as their only option.
"Despite COVID and the recovery process, there are a lot of businesses out there doing very well who need staff, and they're just not out there," she said.
"I think it has a little bit to do with the fact that the education system needs some attention. I also think it's about the fact that with COVID we haven't had the people coming in from overseas that we normally would."
Larger operators like the Central Hospitality Group have been able to take advantage of international borders opening - employing new skilled workers from Singapore and Malaysia - but this isn't the case for most.
Mr Segboer said he's hoping to be able to fill the gaps in the skills shortage, by providing training for new staff, giving prospective employees the opportunity to train up.
He hopes that will introduce more skilled employees to the Tamworth labour market.
"Even if they're not successful in a role with us they'll still be able to move into the industry at another venue," he said.
With inflation expected to peak in October, local business will need to continue working together to meet the challenge.
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