Workplaces must adapt to a tighter labour market, as official data shows that job listings were 70 per cent higher than pre-Covid levels in October, reaching 285,700, up 0.5 per cent from September and 11.7 per cent from a year ago.
Since reaching a historical low in May 2020, job vacancies have expanded substantially, and Grant forecasts that unemployment will go as low as 3 per cent.
With the labour market continuing to tighten, I have identified five key labour market trends to watch out for in 2023.
Greater staff turnover
With skills shortages rampant in most sectors of the economy and the unemployment rate sitting at a near 50-year low of 3.4% and likely headed towards 3 per cent next year, Grant expects staff turnover to jump in 2023.
“The time has never been better for workers to look for a new job and secure higher pay. The national turnover or ‘quit’ rate rose to 9.5% over the year to 28 February 2022, the highest level since 2012, and has likely climbed since then. That turnover rate could reach 15 per cent in 2023 as workers, especially professionals, look for more rewarding work,” says Grant.
WFH being wound back
Employers can’t effectively introduce a one size fits all WFH policy – ideally, an organisation’s leadership team will have discretion on how they manage their workforce and allow WFH where appropriate. Employers must consider the most effective way for a team and individuals to work without imposing blanket rules and a rigid mindset, which may result in resentment among staff, especially among those who can work more productively from home is. If told to stop, those employees might walk or ‘quietly quit’ by doing less work as their motivation diminishes,” says Grant.
The number of people with second or third jobs to jump
“More than one million people held down two jobs in 2022, and 900,000 people worked three or more jobs, and those numbers will inevitably increase in 2023 as living costs rise, and some Australians take on more jobs to make ends meet. Other people are cashing in on a strong jobs market and rising wage growth, taking on more work to gain more income as more lucrative offers emerge, whether it is high-paid consultants or casual workers who want more money. Their skills are in short supply, so they are cashing in.”
Higher wages growth
“With ongoing tightness in the jobs market, we are likely to see wages growth across the economy head towards 5% in 2023. However, in some sectors, wages are growing much faster, especially where skills shortages are most acute such as in the technology sector, where employers are granting pay increases of up to 30% to attract new staff. That’s good news for those workers who can ensure that their real wages are maintained or increasing,” says Grant. As the labour market tightens, employees are gaining bargaining power, so if they aren’t happy, they’ll likely begin searching for more rewarding employment if their wage demands aren’t met and sell their services to the highest bidders.”
Cyber secure shortage to become more acute
“We are seeing more hackers steal data from organisations worldwide, and this trend is set to increase next year. At the same time, we don’t have enough cybersecurity specialists to prevent cybercrime. Employers are not training staff to fill these important security roles, and universities too aren’t training enough cyber security professionals,” said Grant.
“In some organisations, too, working conditions are far from rewarding given the long hour’s cybersecurity specialists often work (sometimes on call 24/7) and a lack of recognition for their work. Employers need to invest in their staff, which may include retraining IT workers from other areas to work in cyber security roles or paying existing staff more for the value they contribute. As the Medibank saga has shown, millions of dollars can be wiped from a company’s value if hackers infiltrate its systems and steal its data. We need more experts to stop this.”