4 months ago, we presented Executive Outlook’s findings on business sentiment and trends, reflecting the views of over 80 business leaders across the region. 89% of executives cited skill shortages as their top constraint. This was the mood on the ground.
“It’s easy to get work, the market’s hot. We need more staff to grow”.
“It’s a merry dance of competition for staff and higher wages”.
“Balance has shifted in favour of employees, and they know it”.
The pandemic led to a surge in career switching and early retirements. That’s a lot of knowledge walking out the door. To add to this perfect storm, immigration is still recovering.
Has the tide turned?
Four months later, we’re seeing signs the hiring boom is cooling, and the market is just starting to turn. More candidates are actively applying for roles. Anecdotally, some “pandemic-induced retirees” have found the grass isn’t greener, and are taking on part-time roles, as firms seek to build talent (or hire for projects). There are fewer panic hires, with a shift in focus towards boosting productivity and upskilling employees.
RCSA’s latest Jobs Report showed a 4.7% drop in job postings last quarter. The changes were reflected in the National Job Index, which dipped 1% in the December quarter. (Queensland bucked the trend, with a rise of 1.7% in postings).
“It seems that businesses are remaining resilient against recession chatter, the soaring cost of living and interest rate rises,” says RCSA CEO Charles Cameron.
In context, this comes off the back of a huge boom. Vacancies are still 5.7% higher than a year earlier. Unemployment is still incredibly low and the need for skilled workers is huge (but watch this space).
There are no triggers, just a sense that the wheel will turn. Global debt levels have skyrocketed, and grown faster than underlying economies for decades (America’s nudged $32 trillion). The capacity to service these debts is hindered by rising interest rates. Stagflation is a threat once inflation burns out. That’s when prices and purchasing power drop. Demand falls, supply builds and unemployment rises. These are macro risks, but we’re all connected.
At this point, we’re finding local businesses are still keen to lock in talent. Overall business sentiment is healthy and commodity exports are strong.
That said, this is the right time to prepare for a turn in the market. Know your tangible differentiators. What matters to your employees and clients? How can you share insights, advice and deliver better outcomes? Automate what you can to enhance productivity, and invest in relationships to build traction when the market turns.
Are skills shortages a thing of the past?
I was interested to read PwC’s latest survey. 100% of CEOs surveyed in Australia are concerned about cybersecurity. This tops their list of concerns.
Cybercrime is the elephant in the room. Data breaches, ransomware, spoofing and phishing attacks have exploded. Recent high-profile data attacks have boosted demand for cybersecurity specialists, analysts and developers to protect our businesses. This is where we’re likely to see a deep talent deficit.
The bottom line is despite fears of a recession, candidates with in-demand skills will continue to control the job market. It’s important to give them the tools to thrive, help them evolve and invest in their training and development (it’s not just about money).
Business leaders shared their retention ideas in our latest Executive Outlook survey – find out more.
Compiled by Jan Gadsden, Founder of Top Office Group Pty Ltd.