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Human Resource News

Welcome to Human Resource News, your ultimate destination for the latest updates, insights, and trends in the world of Executive Search, Interim Management, Leadership Development, and more. Whether you’re an HR professional, a business leader, or someone keen on understanding the intricacies of workforce management, our blog is designed to keep you informed and ahead of the curve.

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THE GREAT RESIGNATION

Executive search: THE GREAT RESIGNATION – A FIZZER IN AUSTRALIA

In September last year, Harvard Business Review reported that according to the US bureau of labour statistics 4 million Americans quit their jobs in July 2021, The Great Resignations peaked in April and remained abnormally high for several months.

However, Australia is facing significant talent shortages which are exacerbated by the border closures that have limited the availability of foreign skilled and casual student labour for two years. Underlying this is the fact that Australia was due to hit zero net new entrants to the workforce in 2021 anyway – as identified by a Productivity Commission Report “The Economic Implications of an Ageing Australia” in around 2005, which was a simple projection of the birth rate in the immediate years preceding the report, to working age maturity.

There were some interesting The Great Resignation trends in the USA :

  • Resignation rates were highest amongst midcareer employees, those between 30 and 45 years of age.
  • Resignations varied by industry sector with the technology and healthcare industries suffering the highest resignation rates.
  • Some sectors improved their retention rates.

The Great Resignations: BUT WHAT HAS HAPPENED IN AUSTRALIA?

The Great Resignation has not materialised. There are some underlying causes. As the impact of the Covid 19 pandemic began to bite in the second quarter of 2020, unemployment rates in both the US and the Australian economy soared. However, while America’s unemployment rate skyrocketed beyond 14%, Australia’s peaked at 7.4% in June and July 2020.

Rapid intervention by the Australian Federal government with the Cash Flow Boost and Job keeper programs kept many people in work and indeed brought some back. Australia’s employment laws also tend to mean that employers need to take a much more considered pathway to termination.

As both economies recovered and now have a very healthy employment rates Australia has a different challenge to that faced by the US economy. The mindset of successful American employees seems to be that there will always be another job. The Great Resignation has been a reaction to working and commuting in cities, to office cultures, to travel time and the realisation that work life balance has sometimes been poor.

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In Australia, people felt fortunate to retain their employment. International borders were closed at the beginning of the pandemic. On an ongoing basis, this has severely affected labour supply at entry level. Hospitality is a prime example. The industry that suffered most from long periods of closure or being limited to takeaway food during lockdowns now finds itself short of people. It has relied on the part-time work of foreign students and now many of the same cafés and restaurants have recently returned to takeaway services only due to chronic shortages of kitchen and wait staff.

New foreign graduates often assumed entry level corporate roles where they were permitted to remain for postgraduate work for up to 2 years before returning home. This ready supply of skilled labour created upward pressure inside organisations for both performance and promotion. This simply stopped.

There has been a marked reduction in movement between jobs in Australia since the onset of the Omricon Covid 19 variant. Even though people were again permitted to move around the community more freely, there has been a genuine reluctance to give up the lifestyle associated with working from home. There are also elements of health-based caution around venturing into the community too frequently at all. This is been mirrored by very low foot traffic in the CBD of major cities, public transport and at major sporting events.

Despite markedly higher prices than two years ago, Australia’s dominant job board, Seek.com, now posts a warning on the employer job posting site “Candidate cautiousness and high demand is currently resulting in fewer applications for some job ads”.It is actually most job ads for jobs paying under $150,000.

Our recruitment network, the Australian members of NPAworldwide, are consistently reporting order books full of jobs and a scarcity of candidates. This is particularly being felt in the middle market with salaries between $70,000 and $150,000. However, at the executive end of the market where salaries range from $200,000-$750,000 there is still plenty of interest in “new opportunities”

 

WHAT DOES THIS MEAN FOR RECRUITMENT?

There are a number of strategies that recruitment firms need to take to hiring managers and these include:

  1. A truly consultative approach.
    • Clients who expect fast turnaround and rich shortlists for mid-level roles are being disappointed.
    • The recruiter needs to provide objective advice on the talent market, on remuneration based on current data and insights into remuneration and benefits currently being offered to entice people.
    • Insights and advice regarding onboarding, company culture, historical turnover and professional development
  2. The confidence to say no
    • There is no point recruiters taking on assignments where a combination of candidate scarcity, below-market pay rates and even company reputation create barriers.
    • It is, in fact, a unique opportunity for recruiters to demonstrate their consultative capabilities.
  3. Employ some elements of the executive search process
    • At the moment, most advertising is probably a waste of time and money.
    • The ability to map a market, identify talent pools, find and approach individuals are all critical skills and processes. Companies that don’t have the basic sourcing skills of executive search firms are really going to struggle. Employers need to be aware of this.
  4. Insistence on time to work a job, exclusivity and probably retainers and higher fees will qualify the unreasonable towards the weak and the reasonable towards the capable.
    • It’s time for grown up, peer to peer commercial discussions
  5. Educate clients to be prepared for a shortlist of one!
    • Not as an expectation but as a genuine possibility
  6. The provision of ongoing advice around onboarding and retention – services that also need an invoice attached to them.
    • There’s no such thing as free work – nor should there be

The reality is that if the recruitment and executive search industries are not seen as partners by their clients then the client relationship is worth very little at all. Even when a search does not result in employment, the consultant should still be able to provide valuable advice on the market conditions in any sector at that time.