New wave of uncertainty hits Aussie employers

Australian employers are paring back their growth plans for the year’s end, with hiring expectations dropping for the first time this year, according to the latest Manpower Employment Outlook Survey released today.

The survey of over 2,200 Australian employers indicates hiring pace may soften over the next three months. The seasonally adjusted Net Employment Outlook is at +19%, a five percentage point drop from the last quarter’s seasonally adjusted outlook. The number of employers planning to increase hiring has remained steady (at 27 percent), but the number of employers planning to decrease headcount has increased to seven per cent (up from six percent in Q3).

According to Lincoln Crawley, Managing Director of Manpower Australia & New Zealand, while hiring optimism has been tempered, the results are still strong overall.

“At the time of the survey, a looming election and talk of a double dip recession in the US may have affected employer confidence. However, the overall employment picture is still strong, especially compared to a year ago when the Net Employment Outlook was at +8% –  it’s now 11 points higher,” said Mr Crawley.

The survey results were mixed across both industry sectors and geographies. Employers in the Transport & Utilities sector anticipated the most turbulence, with their Outlook dropping 19 percentage points to +15%, compared to +34% last quarter.

Both the Manufacturing sector (+11%, down from +18% last quarter) and Mining & Construction sector (+25%, down from +31% in Q3) have also seen reductions in employer hiring optimism looking towards the end of the year.

“After building inventory during the recovery, it’s not surprising to see these sectors paring back their investments at this time,” Mr Crawley said.

A similar trend is being played out regionally. Employers in both Queensland and Western Australia are reporting a reduction in employment expectations (QLD at +17%, down from +25% in Q3; WA at +32%, down from +37% last quarter).

“The results suggest that uncertainty around the mining tax has impacted the employers in the sector and the states in which they’re based. But it must be remembered that while hiring intentions have fallen, they’re coming off a remarkably high base. And the latest economic figures prove that whatever concerns they’ve experienced, resources companies are still driving much of the nation’s growth,” said Mr Crawley.

Manpower believes the real threat to growth isn’t a drop in demand but a shortage of skills. Its recent global Talent Shortage Survey found that in Australia, skilled trades – on which the resources sector relies heavily – are the nation’s number one area of skills shortage.

“We need a more detailed understanding of which skills and competencies are needed, then a national program for developing them. Strategic skilled migration is also crucial for ensuring we have the right skills, in the right place, at the right time,” he said.

Keeping skilled workers is the other big challenge. Right Management, a Manpower company, recently released research that found when resources sector employees are made redundant, half of them leave the sector altogether

According to Rosemarie Dentesano, Talent Management practice leader at Right Management, “A large investment goes into attracting people to work in mining and resources and then training them in such a specialised area. So, it’s crucial that they don’t let the people they do have walk away from the industry.

“Employers need to invest both time and resources in improving engagement and retention, but they also need to become more sophisticated in the way they redeploy skilled workers. Ideally, when they finish one project, they should move seamlessly to another.”

Across the states and territories, Tasmanian employers have indicated their strongest hiring intentions since 2006, rising 15 percentage points both year-over-year and quarter-over-quarter to +23%.

Employment Outlook for Australian industry:

    
Employment Outlook for Australian regions:

         
Article compiled by recruitment firm Manpower, Australia and New Zealand.

September 10, 2010.