The job market through 2010 has been through what is almost now a complete 360 in terms of the fundamentals.
As the economic climate deteriorated through 2008 and 2009 organisations had a constant focus on "bottom line". Cost cutting was inevitably to find it's way to the most significant line on the P&L, staff wages.
Despite being crude and unsophisticated, it remains the first cab on the rank, and the restructures and right sizing "strategies" were accompanied by headcount freezes redundancies, retrenchments and retirees.
Lucky to have a job
With this unemployment rose and whilst here the rate never got close to some of the predicted levels, overseas markets reached record levels of 10% and more. Those of us that kept our jobs put the head down, bum up and were regularly reminded that we were lucky to have a job.
Towing the corporate line meant sharing responsibility for the "greater good" and many organisations put into place fairly radical mechanisms to ensure the "bottom line" was well looked after. By looking after your employees slightly less made the equation easier, and pay freezes, no review policies and reigned in bonuses became de rigeur.
There were many companies that implemented pay cuts, compulsory holiday, 9 day fortnights any mechanism to reduce the accruals in the balance sheet. Non financial benefits were reduced all with the anecdotal "we don't want to do this....but......".
Little or no choice
Employees had little choice and to be fair where this was done well it did ironically lead to performance improvement. Even CEOs were coming to the party cutting what cynics would say were ridiculously high packages to slightly less ridiculous packages. Doing more with less was spun to be process improvement and increasing efficiencies. At its worst you had more work allocated to fewer people earning less, a situation that is clearly not sustainable and, when not recognised, a human resources time bomb.
The year of 2010 saw a gradual thawing in this environment. The local economy did not go into recession, and as all around experienced bank failures, bail outs, write downs and even sovereign debt failures, Australia has bucked the trend.
For the latter half almost of this year unemployment has been in decline. And with this comes the 360. There has been a lengthy period of a labour market in favour of the employer. About as favourable as it can get, remember pay less get more, lucky to have a job. What developed was an undercurrent of employees that stayed in their jobs because they have had to, and surveys highlighted that the overworked and under payed were poised to revolt at the first opportunity as the economic conditions improved.
Attracting real talent
Conditions have improved, and demand has risen sharply, giving organisations new challenges in attracting and retaining talent. Already there is a skills shortage in certain sectors and salaries are back on the move.
When people move jobs they move with a pay rise, rarely on the same money, and even more rarely for less. Yes research shows that people don't move just for money, but when people do move they get more money. The softer perks, gym membership, lunch and so on are considerations but having been through times like we have, employees want some certainty and the biggest measure of this is what shows up in the bank account on pay day.
Wage increases are the result of some these factors, but more fundamentally having ducked the recession bullet, inflationary pressure is mounting, RBA rate hikes, property prices, energy rates increasing mean that even the slightly less ridiculously payed CEOs outgoings are mounting (not quite on struggle street yet though).
The hard conversations
As the pendulum swings in favour of the job seeker, salary packages are going to be placed further up on their list of priorities. Some employees have been left "underpaid" having been through pay freezes but the swing of supply and demand is starting to raise job seekers expectations when it comes to cold hard cash.
Short sighted employers will lose underpaid staff and fail to compete in attracting new talent. Employees are now looking to have those "hard conversations" about money, and companies caught unawares or hindered by policy will be out hiring replacements that will "cost" them more as they try and attract the more demanding job seeker in an increasingly competitive market.
Simon Boulton is Director of accounting and finance recruitment practice Aequalis Consulting. He has more than 12 years of finance recruitment experience in London and Sydney, where he has launched multiple divisions for international companies. At Aequalis Consulting, he provides tailored strategies for companies in various industries to attract and retain the most talented professionals in the market. Visit www.aequalisconsulting.com.au.
