Employment demand co-exists with crisis

Recruitment consultants say they look at past behaviour to predict future behaviour. Right now though, consultants worth their money won’t bet any money looking at past economic hard times to make a firm prediction about the future of the employment market.

Managing director of Michael Page Australia and New Zealand, Phillip Guest, says most people are tempted to compare the results of this financial crisis with the recession in the early 1990s.

“Anyone who does this and tries to draw some conclusions will come unstuck,’’ he says. “Our economy is so much more international than in ‘91/’92.’’

Deborah Loveridge, chief executive of the Vedior Group, also believes that predictions are problematic.

She believes underlying technological and productivity improvements, our ageing population and many industries still playing catch-up in investing in talent development, will mean demand for skills will remain.

“Lots of people have reinvented their business over a long time. So the impact [of the uncertainty] is not so sudden,’’ says Loveridge. “When I go to clients, I don’t see evidence of fat areas,’’ she says.

“They are very concerned about labour cost and productivity. Businesses have been far more accountable for their performance.’’

Guest agrees that demand for skills will continue. “At the moment there is some underlying strength in the Australian economy. However, people are shocked by what’s happening internationally and we are not immune. We may see slower growth, but we expect high demand for skills.’’

Like Loveridge, Guest interprets our underlying demographic shifts as influencing demand for labour. “The trend has been historically towards earlier retirement, however this may change because of share prices hitting super funds,’’ he says.

“But we are still seeing the ageing of the population, people leaving work, a big increase in the birth rate with more professional women choosing to have families,’’ says Guest.

“This skillset is leaving the economy and employers are struggling to get them back.’’

Loveridge has observed an upswing in demand in IT roles and a huge need for accountants. She notes that engineering demand has slowed, but that this has been more of a continuation of a longer-term decline rather than a sudden reaction to economic uncertainty.

The most contradictory indicator Loveridge has seen is the huge increase in demand from their industrial clients who are typically a barometer of economic fortunes.

“We’ve kept looking at our industrial clients. It’s the best temperature gauge of a slowdown, but then perhaps lots of the change has already occurred.’’

Guest says slowdown has been sector specific.

“It’s still tightening in the market in financial services -definitely tightening,’’ he says. “But this has also created some new job opportunities for people.’’

Guest has seen strong demand growth in finance for reconstruction, credit risk and recovery positions as employers are looking at their loan books and liabilities and assessing risk.

Guest has witnessed some notable shifts. “Anything to do with investment banking is under enormous pressure. But we’ve seen a transferring of skills from investment banking into retail banking. The big four banks are bullish in opportunities.’’

There are also interesting changes at the top end of the market.

“At executive level for CFO and CEO roles we are seeing some business turnover,’’ says Guest. “Boards seem more inclined to change heads and employing more around financial skillsets.’’ He’s noted demand for CEOs with change management and business growth experience.

It seems the immediate reaction to the share market turmoil is caution. While Loveridge says she’s not seen the hard data, they have had clients in the finance sector recently pull orders.

Guest has had a mid-sized mining project cancelled as a result of increases in the cost of funding and lower commodity prices.

So what do you do if you’ve already lost your job and you are among a bunch of people with a similar set of skills? Holidays are out for a start. “Don’t assume you won’t get a job in the same field. It’s not like last time,’’ says Loveridge.

“But you will need to be swift to get out and market yourself to recruitment firms. Many of them will not advertise, but try to fill a role off their database.’’

Both Loveridge and Guest agree that if there is a dramatic downturn we will see an increase in demands for temporary and contract staff.

This has pluses for both client and jobseeker. Guest says contract work offers cautious clients a chance to try before they buy, a bonus for jobseekers trying to transfer industries.

“Be prepared to do temporary or contract work as a foray into an organisation,’’ says Loveridge “You can then access the internal job board and make yourself available.’’

Another advantage is that you can build a relationship with the recruitment agency, which can get to know you and your skills- then market you to other clients.

“You’ll need to think about the adaptability of your skills,’’ says Guest.

“Say ... you were a mergers and acquisition person in financial services-demonstrate how these skills apply to credit and corporate reconstruction.’’

If nobody’s placing firm bets on the landscape of the market, does this atmosphere feel any different from the past?

“This is not the toughest I’ve seen. Gosh, not by a long way,’’ says Loveridge.

In the 1980s their senior team took some drastic measures to keep their core recruitment business functioning including salary cuts, merging roles and executive management staff manning the front phones.