September Market Update

What is happening in the job market?

As we move into the final quarter of the year, where is the job market heading?

From an advertising perspective, SEEK is reporting a 0.3% increase in job ads month on month across the Australian market, with Technology job ads up 1.3% for a second consecutive month. In Victoria, job ads were up 2.7% month on month, and 4.4% in Technology – perhaps a promising sign of some pre-summer movement in the market. This is certainly consistent with what we are seeing & hearing as a business at the moment.

In terms of salaries, there are signs wage inflation is cooling off. Advertised salaries were up 3.9% year on year in August. This is down from 4.4% in July, with just a 0.2% increase in advertised salaries month on month. This is the slowest monthly increase since mid-2022.

Globally the employment markets remain fairly flat. LinkedIn Hiring research shows, unsurprisingly, that the labour market is directly following economic output eg pretty slow! Australia continues to be hit hard, with Linkedin job transitions lower than the global average. Applicant numbers per role are on the rise globally – this is also being reported in Australia by Seek.

Full LinkedIn report can be found here: https://www.dhirubhai.net/pulse/global-labor-market-remains-sluggish-amidst-policy-ctevc/

In the broader economy, unemployment remains the same at 4.1% and inflation is heading downwards at 2.7% - finally inside the RBA target range of 2-3%, and for the first time since August 2021, below 3%. However, the trimmed mean (factoring in the utility incentive and removing more volatile commodities) still sits at 3.4%. We don't expect a drop in interest rates this side of Christmas, but surely can be optimistic for a new year's treat.

In Other News...

Are we about to see the end of the WFH party?

One of the positive legacies from the COVID era, and perhaps the reward for all those lockdowns, was a reset of how and where we work. Initial prophecies of a future where we all are working fully remotely seemed a little far-fetched at the time, but the hybrid model (the 3 days in the office/2 days from home is the most popular model) does appear to have become the new normal work week.

However, in the last few weeks, the full return to the office mandate has had a resurgence and become a topical conversation again. Both Amazon and Tabcorp have told workers to get back to the office 5 days a week. What’s especially interesting here is that these companies are essentially Tech, or at least Tech dominant - which makes the decision even more surprising. News of their RTO plans triggered the expected response e.g. predictions of mass resignations, claims of living in the dark ages etc…

But are these companies out of touch or ahead of the curve?

KPMG’s latest CEO sentiment survey, published late last week, showed 82% of CEOs believe white collar roles will be back in the office 5 days per week within 3 years. Asked the same question last year, 66% held this belief. Quite the jump in opinion! When asked how they will achieve this, 78% of CEOs are looking to pay rises, promotions and “more interesting” projects as an incentive.

This raises a few questions.

• Why the sudden shift in outlook?
• Is their position on a return to the office representative of a broad base of CEOs, or just the view of large corporates?
• What is not working with the Hybrid model that needs everyone back to the office?
• Are the failings of the Hybrid model more about poor management, than worker productivity?

The full KPMG report can be found here: KPMG CEO Outlook Sept 2024

What's my view on this?

Personally, I can’t help but feel that the tidal wave of recent employment legislation is another factor in pushing the market back to traditional ways of thinking. The right to disconnect, an increased focus on psychosocial hazards and growing work cover costs are all making it increasingly complicated to run a business, and employ people, in Australia. Having your people attend a place work eg the office with greater workplace definition simplifies some of this complexity.

I'd argue that flexible working conditions also require flexibility in employment legislation to be successful.

Despite the rhetoric, I don't foresee a sudden rush to return to the office. We’re more likely to see a greater focus on individual flexibility at work, opposed to the current broad brush, one size fits all hybrid models. This may mean 5 designated days in the office as the default, but with individuals negotiating an arrangement to meet their specific circumstances.

Call me ultra-cynical, but it could well be Amazon is using the return to office mandate to trim their headcount, without the stress, cost or bad PR of redundancies.

What's the expert view?

I’m always interested to read the views of experts, such as Nick Bloom , on the remoting working debate. Dr Bloom is a Stanford professor who has been researching remote working for more than 2 decades (long before COVID). He’s also the LinkedIn Top Voice on remote work.

In a LinkedIn post reflecting on the Amazon return to office announcement, he cited the evidence and data showing that a return to office mandate will lead to resignations and recruitment challenges. If Amazon do pull it off, and potentially becomes the destination for talent wanting 5 days in the office, then he points out that they will see a negative impact on their diversity in all areas. His view is that the more likely outcome is that Amazon will quietly drop this approach in 2025.

Polls

Every Thursday, I share a poll with my network on Linkedin to get their views and opinions on key topics.

Would you go back to a previous employer?

A recent HBR article claimed 28% of people who resigned from a company during COVID had subsequently returned to this employer. I was honestly amazed by this research. I would put the figure at less than 10% (based on spending alot of my day job looking at people’s resumes and LinkedIn profiles and not seeing this trend).

I was interested to test the idea of returning to a previous employer as a hypothetical idea.

Interestingly, 54% said yes. The comments on the post pointed out that it was about being in the right team, with the right leader and not so much about the company.

So…. the next question is why do we not see as many people going back to a previous employer?

What is KEEPING you in your job right now?

As a recruiter, I often focus my conversations on why someone is looking to leave their role. I thought I’d flip this 180 degrees and ask why people are staying in their jobs!

It’s great to see almost half of people enjoy their team, job and/or culture. It’s also revealing to see just over a third of people are waiting for the market to improve and 1 in 7.5 people are apathetic to their work but can’t face the effort to move.

This indicates to me a surge in movement once the market is stronger. Watch this space!

Which aspect of team performance is most critical to success?

Research shows that engagement at work, and team wellbeing is linked (both positively and negatively) to the success of a team.

A successful team has stronger engagement, and vice versa.

What stands out from this poll is that trust and accountability are the most important thing to set up a team for success. There’s probably no surprise here, but it highlights the importance of psychological safety and open/transparent leadership.

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How psychologically safe is your workplace?

On the subject of psychological safety, I was interested to see how open people would be about their own work environment, and whether they would share their experiences.

It was encouraging to see 42% felt a high sense of psychological safety, but equally concerning that 34% reported it to be low/non-existent. The flaw in this type of poll is that it will naturally attract more extreme views, and likely reflective of personal feelings about someone’s job.

It would be interesting to run the same poll when the economy is booming. I’d image the tighter market conditions lead to great work stressors.

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TALES FROM TECH TITANS

Our Tales from Tech Titans podcast continues to grow. As we approach the first anniversary, we’re delighted to be getting thousands of listeners and views every week.

This month we moved to a two-part format to reduce the episode length to a maximum of 45 minutes.

We’ve had some incredible guests recently including Samantha McIntyre Euan Walker Noel Toal & John Taylor - MBA, GAICD

If you haven’t checked out the podcast, then I encourage you to take a look.

Recommended Reads & Listens

I’m currently reading The Boys in the Boat – the story of the US Rowing team from the Berlin Olympics in 1936. This book was a gift from Andrea Bell – it was also her recommended read back in episode 3 of Tales from Tech Titans ?TFTT Andrea Bell

The book is an amazing story of grit, determination, resilience and teamwork. If books are not your thing, then fortunately it was made into a movie in 2023!

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On the podcast front, I’m enjoying the Amazing Teams podcast.

Every episode is short and punchy – getting straight to the point. It’s been fascinating to hear stories of leadership from a broad range of guests, and not the usual faces who do the circuit of the major business & leadership podcasts.

Check it out!