New budget, better job market?

May 10, 2010, 3:43 pm By Simon Boulton simonboulton

Consumer confidence doesn't necessarily translate into hiring confidence

The aggressive budget only adds to the challenges in the employment market despite the encouraging employment figures.

The improvements in the labour market don't necessarily make job hunting any easier. The situation is delicately balanced. There certainly is a sense of cautious optimism and it doesn't take much to swing this sentiment to cautious negativity. Consumer confidence doesn't necessarily translate into hiring confidence and the implications of the recent budget can only add to the challenges that job seekers face despite the improving conditions.

From bad to worse

The bounce back seems remarkable. The employment market in 2009 will mark as possibly the worst in a lifetime. As the US collapsed to its knees the global reverberations were inevitably severe. The banking collapses of Bear Sterns and Lehmans saw unprecedented international fiscal policies prop up the world's loans and debt markets. Lending grounded to a halt, and the "real economy" started to creak. Ford, Boeing, and other household names began head count or salary cuts. Often there were "rounds" of redundancies, a peculiar staff management strategy, let a number of people go with the motivational news that there will be further cuts!

Inevitably unemployment was on the rise and quickly the numbers of job seekers outstripped the dwindling numbers of vacancies. So fearful were organisations at this point that the usual upswing in hiring temporary employees budged and in some cases fell. Temps are a low hanging fruit to cut...that is why they are temps. Permanent vacancies plummeted as the pause button was hit in almost every sector. Even recession-tolerant sectors were standing still if not laying people off.

Cut, cuts and more cuts

It was miserable time to be a job seeker. Redundancies saw a flood of employees searching for something to do just to get out of the house. CVs were cut, rewritten, re formatted.....this is my management version, here is my strategy version as people tried to represent their experience into something that may land a job doing something. With the lack of even temporary work again the numbers of job seekers grew.

Predictions of 10% unemployment were looking likely, cuts continued and even the most zealous and well qualified of job hunters struggled simply by there not being enough openings. Take for example a Sydney based CFO, 15 years of executive experience. Demonstrated track record of achievement, professional qualifications behind a "career" spent with blue chip and sometimes listed companies. In a global downsizing strategy the team they had been managing had been relocated to a shared services centre in Mumbai. Arguably they had been so good at their job that they had reached career nirvana "making themselves redundant".

This became career suicide when suddenly your job is made redundant and the internal vacancies list looks like the Gobi desert. The news was not much better in the external job market as career nirvana experts scuttle about frantically applying for the same dwindling and tired numbers of adverts on job boards.

Bye-bye 2009

But hallelujah 2009 is over and 2010 is here with the promise of recovery, growth and prosperity. With things being as bad as they had been the smallest grain of good news is leapt on. Job advertisements up, unemployment falling, job creation, massive investment programs, job seekers are breathing a sigh of relief and even rubbing their hands together in anticipation of the multiple offers they are destined for having done the hard yards. But do these indicators mean the job seeker is going to get some relief........not necessarily.

Yes there are more vacancies but as it was when there were few, competition is tight. Unemployed applicants are now joined by the disenfranchised employed that have wanted to move jobs for some time but simply haven't been able to. Some of these are the real talent that has had the trust bridge broken through the down turn and loyalty wanes, job advertisements get another set of eyes pouring over them.

Temporary staff, and contractors turn their minds to looking for a more permanent job, another contender in the now heated up market. Add to this the returning expats that having been in fear for 18 months now look to bring the family home and are building up job seeking through the night. This 24/7 job seeking tide creeps in on every vacancy, making getting noticed / considered a real challenge. Through sheer volume the hiring organisations struggle even to acknowledge applications.

A time to thrive?

Another sector of potential candidates has also appeared and is often the best suited for many reasons. They understand the organisation, the product and in most cases know the hiring manager or HR Director. Yes "The Internal Applicant"....every candidates and recruiters nightmare. Organisations still have capacity and people are ready for a move to the other side of the office.

Promotions have been nonexistent for some time and loyalty brings with it rewards, so shuffling the deck chairs is seen as a win win. This is quite apart from mitigating the risk arising from externally hiring an unknown quantity, which comes at a significant fee not to mention the time and opportunity cost, of training and developing.

So whilst the simple challenge of no jobs has changed, job seekers now have even more curve balls to face and often ones that really hurt. Adding to this a budget breeding further uncertainty it will have an effect on the fickle labour market and its participants.

Lulled into a false sense of comfort as unemployment drops, job creation rises and even salaries climb job seeking is hard for a whole new host of reasons. These factors are perhaps more challenging than those of the dark and dismal days of 2009. People are able to apply for more jobs but at the same time get rejected for more jobs as they compete against this new field of candidates.

Do you think Australia will produce a better job market in 2010? (Share your views below)


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.

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