All signs point to strengthening hiring activity

We are seeing very strong evidence of the sharp recovery in Australia’s labour market as we continue to emerge from the COVID pandemic.

The federal Budget forecast that the unemployment rate, currently at 4%, will fall to 3?% by the September quarter of this year. That would be a remarkable feat – the lowest jobless rate in 50 years.

We also know that the jobs market has bounced back and that the size of the labour force is now bigger than before the pandemic.

It’s consistent with the findings from our latest ManpowerGroup Employment Outlook Survey which shows very strong hiring intentions for the second quarter of this year.

The survey measures the Net Employment Outlook (NEO), calculated from the percentage of employers expecting an increase in hiring activity, minus the percentage expecting a decrease.

Taken in January, it shows a +28% NEO – the third strongest result for hiring activity since the survey began 14 years ago. Staffing increases are forecast for all regions and industry sectors.

Interestingly, the largest expected increases in employment are in the not-for-profit sector (+40%) and among medium sized businesses (+35%). Traditionally the NFP sector has struggled to attract talent away from the private sector. However, after the last two years, the NFP sector is likely to benefit as many employees opt to engage in more rewarding work – work that has a purpose.

?The survey findings are a powerful signal that confidence is returning after a lengthy period of uncertainty.

?But the results also bring into sharper focus some of the challenges we confront.

We are now in an extremely tight labour market. Skills shortages are going to be with us for some time. It means that the power in the hiring relationship will sit firmly with employees and jobseekers.

?It’s a timely signal to all employers that they should focus on engaging and supporting their existing employees. In these market conditions, retention is much better than hiring.

?This is a most unusual labour market. Many of us will not have experienced anything like it.

For employers, it’s important that they identify what’s important to their employees, be flexible with their offerings, and do their utmost to retain the skills critical to their businesses.

?I encourage you to check out the findings of the latest ManpowerGroup Employment Outlook Survey here – https://hubs.li/Q016ql010 – and please, if you wish to leave a comment below or reach out to me to share your personal experience in this unique and changing market, I would love to hear from you…?