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Published 07 February 2013 01:15, Updated 16 May 2013 00:46
Reading the labour market is becoming more difficult for corporate leaders. An unemployment rate of 5.4 per cent makes us the envy of the world – and yet we don’t feel lucky. We feel worried, insecure, more than a little panicked
It doesn’t help that for many months now the jobs data has shown an unrelenting slide in the number of positions advertised and then come the reports of mass retrenchments.
In January alone job cuts were announced by Boral (700), Iluka Resources (65), QBE (700) and Morgan Stanley (1600 globally), with more expected in the banking sector from National Australia Bank, ANZ Banking Group and Westpac.
To many leaders, the jobs data does not seem to make sense.
How can we be losing so many jobs and not see disaster reflected in the unemployment figures?
It is difficult for companies to make predictions about demand for their products and services if they are confused about the extent of the winds buffeting their clients.
It makes the job of deciding whether this is the right time to hire all that more difficult.
And, as individuals, people need to get a handle on whether their own positions are more or less secure than they were last year.
From his position working in the outplacement industry in Sydney, Directioneering International managing director Nick Plummer sees the gloom continuing for some time.
His company, which helps retrenched people get back into work, has had its biggest January in years, thanks to the influx of newly jobless from professional services firms, finance, telcos and the property sector.
“We’ve been incredibly busy during the past four years,” he says. “Halfway through last year it looked like it was quietening down and then six months ago it accelerated like crazy.
“A lot of people are being laid off. I think that people are very concerned about the way their companies are performing and the general news about the future looks bleak for some people.”
It is now taking people twice as long to get re-employed as it used to, he says. “For many senior people [earning more than $300,000], it is taking more than 12 months to get a job.”
Directioneering has hired an extra four people in its Sydney office to help deal with the load.
And yet there’s that 5.4 per cent unemployment rate, which shines in comparison with Germany (6.7 per cent), Canada (7.1 per cent), the UK (7.7 per cent), the United States (7.8 per cent), Spain (26 per cent) and Greece (26.8).
“We don’t believe the figures,” Plummer says. “I can’t tell you how stunned we are at the [Australian] unemployment figures. We’ve never seen so many people come through our office before.”
The lesson for employers is that there are plenty of good, available people if they are in a position to hire. And despite the job-shedding, people are still being hired.
In Melbourne, recruitment agency Slade Partners director Anita Ziemer has a completely different take on what is happening.
Her associated company Nexthire, which offers a cut-down version of recruitment for jobs in the $50,000 to $100,000 salary range, is going gangbusters. “We’ve had a really strong start to the year,” she says.
January is usually a low month but not this year.
Ziemer says she thinks employers have realised that the current conditions are the “new normal” and are just getting on with business.
“Work is still there; it still needs to be done. People still leave and they have to be replaced,” she says.
For her company, the amount of hiring activity is better now than it has been for the past eight months.
So what does this mean? That thousands of people are being tipped out of their jobs but employers are hiring into other areas? It seems so.
Trying to make sense of the situation is Bob Olivier, who is a recruiter and also runs HRO2Research, which provides job indices for employers.
He points out that three of the top 10 entrants on the BRW Fast 100 list are recruitment companies – a sign that, even in a difficult market, some companies can do very well.
Nexthire may be thriving but there are plenty of others that have gone out of business in the past year, he says.
Olivier does not doubt the accuracy of the Australian Bureau of Statistics unemployment figures, which are collected in a telephone poll of 30,000 households. They are compiled in a way that is consistent with the way the data is gathered internationally, which means comparisons between countries should be valid.
However, he says, the ABS statistics do not take into account the “hidden unemployed”: those who have either given up looking for work or who have picked up a little bit of work but need more.
Roy Morgan Research provides an alternative measure and claims an unemployment rate of 9.6 per cent, gathered through 4000 interviews a month.
But when under-employment is taken into account, the polling company presents a figure of 18 per cent – which certainly reflects the dire mood in the community.
Olivier warns that the Roy Morgan research is a statistically small sample that is not seasonally adjusted like the ABS figures but agrees that real unemployment must be higher than the official figures show.
“The [ABS] number given is a very conservative view,” he says.
“What is the true unemployment rate? I don’t know, but it is bigger than 5.4 per cent.”
When it comes to looking at the slide in the number of available jobs, reported in indices of job ads such as those provided by the ANZ Bank and Seek, Olivier says they also fail to capture the whole story. “They have exaggerated the extent of the downturn,” he says.
These indices generally just measure newspaper advertising and job boards and miss out on the large number of jobs that are filled through employer websites and social media.
This would mean the unemployment rate is worse than reported but new employment is stronger than reported.
Olivier is working on his own range of indices, to be launched in the next few months, which poll employers to find out how many jobs they are offering through all media, including their own websites and social media. He is also looking at niche job boards and recruiter sites.
“I measure up to 2000 sources weekly,” he says. It is too early, however, to make any predictions about how his job statistics will vary from those already available.
Olivier says that once the catch-up hiring after Christmas is finished, he may have a clearer view of what is happening. “It is still pretty bleak,” he says, “but there is an awful amount of pent up demand [in employment] in December and January.”
By the time March is over, the recruitment industry should have a better idea of what the rest of the year is likely to bring, he says.