March Market Update

Summer may have come to an end but unlike the continued hot weather, the recruitment markets have cooled dramatically, leaving many sectors including Financial and Professional services sat in a limbo like state, taking time to evaluate what the future of the economic markets may hold before moving to add talent.

Below I'll give a quick snapshot of what I'm seeing in the market, the overarching message of the conversations I've had with clients and candidates alike and what the future may hold for the recruitment sector in the near term.

The signs are there

Interestingly and excitingly, the right signs appear to be pointing towards the Australian economy having a softer than soft landing in a turbulent global economic slowdown. Recent unemployment figures showed a shock drop to 3.7% from the previous 4.1% once again underlining how robust the local economy is but also highlighting the importance of having multiple sectors not reliant on one another for growth. Mining, Healthcare, and Commerce are experiencing a steady demand for talent whereas financial and professional services are suffering a severe slowdown after three booming years. The diversification of our economy is quite unique globally with heavy US influence on finance and a huge reliance on China's demand for minerals and fuel to feed their ever growing economic machine. This points to a mixed, but on the whole positive picture with employment opportunities popping up in multiple areas and Australians almost being at full employment again.

Once more, Australia is experiencing being seen as the 'Lucky Country' With record amounts of migrants entering the nation (net 550,000) in 2023. Many economic migrants choose Australia not just for it's amazing weather, incredible vistas, landscapes, and lifestyle but also for its economic viability of being a high wage high growth economy where lifestyle trumps the office, home, pub mentality of the British and Irish isles. In saying this, the influx of well educated and expectant migrants is putting housing stock and public services under severe pressure as well as adding credible competition in an ever tightening labour market. With live roles dwindling and competition for roles slowly rising, it will be an interesting 6-12 months to see how this balances out.

Inflation is stubborn at 3.4% which shows there is a little way yet to go before the RBA sit up and potentially bring down interest rates. A perfect storm of lower inflation and higher unemployment is needed for this to happen and many individuals in roles are holding on to the rails tightly, not wanting to jump ship too quickly in a slow market for fear of being first in first out when mortgages and other debt repayments are on the line. This naturally creates a more stubborn employment market, and a chess like warfare of slow and calculated movements across the recruitment spectrum.

For the employed it's also good news as salaries are on the up, with many employers listening to their workforce under stress from the cost-of-living crisis and providing 15-year high annual salary increases of 4.2%. Showing that already existing talent in organisations is not being taken for granted and a general appreciation of a competitive recruitment landscape still remains.

The sentiment however, is not

In spite of all of the economic pointers going green, hiring is not on the horizon for many of the clients I speak with. Highly specialised talent is still in demand but more generalist roles are being snapped up without the need to even explore the headhunting market. Job ads are seeing an increasing number of genuinely talented candidates and many organisations are able to utilise direct sourcing to fill roles rather than engage networked Recruiters like ourselves.

Across Financial and Professional services the general sentiment remains the same. Sit and wait, read the numbers and act upon them later. In certain circumstances some of the growth dependent businesses I work with are making silent moves in the market to bring on highly specialised talent as they adopt the mantra of 'fortune favours the bold'. However more widely speaking, there is a clear lack of necessity to onboard new talent and instead the focus is on upskilling and redeploying existing staff to where resource is needed.

It remains to be seen when the tide will turn on this but I would say sustainable and steady growth is now upon the current market, more hiring is likely but only in sporadic areas and we will not see hiring sprees anything like 2021-23 for years to come. We've entered the reset phase with markets returning to what they were from 2012-20, slow, steady and sustained growth based on previous profits or well measured plans. It's by no means doom and gloom, but it is time to reset expectations, shake off the COVID pay bump expectations and ready ourselves for a competitive recruitment market for the coming years.

If you're interested in having a confidential conversation about your hiring plans or career, please reach out to me on LinkedIn or on [email protected]