Global economic insecurity has Australian businesses asking themselves a number of important questions: how will it affect us? How bad is it going to get? How long will it last? And even, how will we survive? But one question is less frequent, and it’s one that should be addressed by any company hoping to maintain its competitive edge in today’s climate and beyond: how can we take advantage of conditions to boost productivity, re-focus on our key objectives, and ultimately widen the gap between ourselves and the competition?
In the current changing environment, top performing organisations in any sector can capitalise on the confusion, lack of adaptability and increasing internal focus of less effective competitors to grow market share and demonstrate their differentiators. It is far easier to be successful in a buoyant market, and the current climate provides the truly strong performers with the opportunity to demonstrate that when the going gets tough, the tough get going.
On a recent month-long trip around Europe and the Far East I was able to see first-hand the effects of international uncertainty on a number of different cities, each with its own unique set of economic strengths and weaknesses. Of those I visited, Dublin was the hardest hit, suffering from the withdrawal of several key American players in the market, which has resulted in mass job loss and a plummeting morale. London has experienced the double whammy of a finance and business sector sorely affected by events in America, and a sharp rise in the cost of essential services. Cash-rich cities in the Far East, such as Hong Kong and Singapore, speak of recession and crisis economies, but in actual fact are still hiring and appear relatively unscathed by events overseas.
Governments everywhere are taking swift remedial action and applying many of the hard-earned lessons of the early 1990s. But will it be enough? Without a crystal ball it’s really a case of wait and see.
So what is likely to happen here in Australia? Sometimes distance can be a great advantage. The reverberations of the crisis have hit us later than elsewhere, which has given local businesses the opportunity to assess what’s happened in markets overseas and modify our actions and responses accordingly.
We should also keep in mind that we have our own, unique set of economic conditions; ones that will quite possibly protect us from the toughest jolts experienced in countries such as those I saw in America and Ireland. Our economy is in a pretty good state; our national debt is manageable and inflation isn’t onerously high. We are still in full employment at five per cent. This figure is estimated to rise to six per cent in 2009, but it’s still only a little above the common definition of full employment used in the western world of around five per cent. And I believe it is likely to come down fairly quickly due to the tangible skills shortage in the key areas outlined above (over the next five years it is estimated that we will still face a shortage of more than 200,000 skilled workers), combined with an ageing population and a declining birthrate.
But to the person on the street, it’s also about perceptions. Those of us who experienced the recession of the early 1990s remember the lean times and grueling economic conditions. This was not a time to walk out of a job or close your doors if you really didn’t have to.
Today we have a whole new generation of workers who haven’t known a time when they can’t walk out of a job when they feel like it and expect to walk straight into another one. They haven’t experienced a time when they might not get that first job at all. Individuals are going to face a tougher working climate where they may be forced to stay in jobs longer than they had planned. They may also find themselves competing for career advancement or senior positions in a market crowded with others who are themselves staying in jobs longer or delaying their retirements as a result of the loss of superannuation and dips in the price of shares.
One of the other notable impacts from the international crisis is a change in the flow of traffic through the Europe/Asia/Australia corridor. At RossJuliaRoss we have a team dedicated to managing our international client pool. This division has long seen a considerable flow of candidates through this corridor in both directions. But over the last few months we have noticed a marked increase in the number of skilled personnel coming to our shores from Europe, both international candidates and returning Australian and New Zealand ex-pats. They not only come from the banking and finance sector, but legal, IT and technology, and sales and marketing sectors too. Of course this is in part due to reduced work opportunities in Europe and America, but it’s also due to the appeal Australia still holds for its buoyant economy and good lifestyle.
While they’re not coming in such numbers that will greatly impact the recruitment market overall, the in-bound trickle of skilled talent is good news for Australian businesses, which have long complained of losing their best talent overseas. So, rather than focus on the worldwide hysteria and daily feed of horror stories flooding in from overseas, consider the potential advantages of a significant spike in the number and quality of incoming talent. Ask yourself how you can attract this incoming talent, and where could that talent be positioned to best affect your business? Only by rising above the hysteria and taking advantage of opportunities yielded by the economic crunch will you emerge triumphant once the storm has passed.
-Julia Ross is group managing director of Ross Human Directions Limited (www.rosshumandirections.com), the global recruitment experts with offices across the world.
How can your company remain competitive in the current climate?
- Adjust your cost base. Create a more flexible cost base by using temporary and contract workers to manage peaks and troughs.
- Review operating procedures. Ask yourself whether you’re really doing things in the most cost effective and productive way.
- Introduce technology that reduces costs long term. There is a lot of technology around HR and employee management, for example, that can reduce your costs and improve your services to employers.
- Your staff are often one of your biggest operating costs. Keep your staff motivated and productive to ensure that you’re getting the best return from your investment.
- Use contractors to help you get through the peaks and troughs.
How to attract talent in a competitive market
- Create an attractive working environment that appeals to those seeking long-term security in a productive, forward-thinking company
- Offer career advancement opportunities.
- Provide a level of employee empowerment and trust.
- Provide ongoing training and regular appraisals.
- Show your positive engagement with the community in which you operate.
- Enable staff to have a direct impact on service quality, products and the workplace environment.
- Promote a positive work-life balance. Many candidates entering our market from overseas are attracted to Australia’s focus on lifestyle.