Demand for skilled labour across all of Australia’s primary professional occupations has increased, showing the first signs of an across the board positive movement in 12 months.
The Clarius Skills Index –Australia’s only measure of supply and demand of skilled labour – showed a shortage of 2,300 skilled labour in the June quarter, compared to an oversupply of 15,000 in the March quarter. We can compare this to the Clarius Skills Index in the March quarter of 2010 which reported a surplus of 38,000 skilled workers to see just how the market has changed.
The good news from this past quarter is that we’ve seen an upward swing in demand for candidates across all skilled labour sectors and this should continue as long as there are some consecutive months of consistency and stability. Many organisations are looking to 2013 as the year for growth.
Engineering professionals are now Australia’s most sought after workers with a shortage of 8,564 workers being led by the mining sector. The shortage is exacerbated by the unwillingness of skilled people from the eastern states to move to more remote locations in the west.
In ICT, there’s a shortage of 8,258 workers with some of the biggest shortfalls felt among the newer technology skill sets such as cloud computing, mobile development, and networking. Diminishing university enrolments across the IT sector is a worrying trend and will see further shortages. As a result, Australian companies are favouring permanent employment to snare top talent as opposed to contract employment, or they’re hiring from overseas.
The Clarius Index saw the shortage of accountants double, from a 1,500 shortfall in the March quarter to 3,800 in June. With greater shareholder and community scrutiny as a result of the GFC, companies need stability and long-term viability and they’re looking towards good accountants to help them achieve this. Those in greatest demand have been internal and external auditor roles and financial and management accountants
A change of approach
Post GFC businesses have been reengineering their workforces and this has meant some fundamental shifts in the way they’re employing and the way candidates are approaching their careers and job prospects. On the employers’ side, the feedback across the board is that companies have asked their people to do more with less. Many companies, particularly in the finance and banking sectors and the big four accounting firms have shed staff.
Companies are refocusing on core strengths and a desire to operate leaner. Functions not core to the business and requiring a specialist resource is being reviewed for potential outsourcing. Work ethic has come back into play. Employers are more aware how important it is for a person to put in the hard yards when they’re needed.
As businesses seek staff that can step up and support their leaner structures, the interview process has become more protracted with culture alignment and a broader skills mix becoming more valued. For example, in accounting, candidates face a process of at least five interviews and in some cases up to nine. No longer can an accountant be just a good been counter, they’re expected to have broader business acumen and be good communicators.
The same can be said for ICT workers. Employers want their IT people to have good communication skills on top of technical nous.
The employee’s perspective
However Australian workers are also having their say in the post GFC paradigm. With consumer uncertainty still plaguing the business environment, good talent is just not willing to take the risk to move to another employer if they feel relatively secure in their current role. This adds to the shortage in some of the highly prized occupations such as accounting, corporate services and specialist areas of ICT.
A stark example can be seen in sales and marketing. Companies are now trying to kickstart their sales as they aim for growth in 2013 (they’ve pretty much well shelved 2012 for any growth opportunities). As a result the demand for talented sales and marketing ‘rain makers’ has hit extreme levels.
But here’s the rub. Good candidates in this space simply don’t want to move. Their view is ‘better the devil you know’ because they understand that creating sales is a pretty challenging thing to do in this market and they simply don’t want the pressure.
The trend for companies to ride out the aftershocks of the GFC at the lowest levels of staff numbers may have far reaching ramifications. Lean staffing levels have placed unprecedented stress and job expectations on existing employees and loyalty has plummeted. When conditions improve an exodus will occur, particularly from companies who have not treated staff fairly. People who believe their employers have not treated them well during the worst of this period, or have lost colleagues to staff cuts, will be lining up to look for a new opportunity.
Small business wins
A big winner in this environment has been the growth of freelance opportunities and small business markets that are capitalising on the weak market sentiment that’s paralysing the larger corporates. A growing number of people are joining their ranks and the likelihood is those people won’t want to return to corporate life when sentiment heals.
The question for these larger organisations is are they prepared for a talent drain and is it too late to stop it? It is essential that employers should place greater emphasis on communicating the rationale and reasons for any change (for example downsizing) with existing staff. This can help with immediate productivity, but also with the long-term retention of critical talent.
Where possible, staff should be involved in decision-making and setting business objectives. The commercial reality of the current landscape should be articulated so staff understand why decisions are being made and the benefit of them in the longer term. This has a powerful psychological advantage for staff because they feel part of the solution and are more likely to implement processes which support the organisations direction rather than focusing on the reasons why such decisions are detrimental.
Staff recognition is a powerful retention tool employers can use and it doesn’t necessarily have to involve money. Some ways to achieve this include formal recognition of employee performance at team meetings, the offer of flexible hours with an emphasis on half and full days off and even providing staff with vouchers which support activities rather than cash.
What can workers learn?
There are a lot of learnings for workers as well, as they look for a new opportunity. As a basic premise it’s important they understand the expectations of companies post GST and the behaviour of that company during it as a predicator for future behaviour.
For example candidates can do some research into the workforce culture and how any cuts or workforce reengineering was undertaken. This will provide some key insights into the value an organisation places on its people.
When an opportunity arises candidates should be patient and be prepared for a longer interview process. They should demonstrate a strong work ethic and willingness to be a team player as well as specific experience in some of the ‘softer’ skill sets such as communication.
Another reality is that most salaries and wages have been fairly stagnant over the past 12 months so candidates need to be realistic about their expectations and look at the opportunity with a longer-term view.