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Hiring Market Update Survey for Australia

Hiring Market Update Survey for Australia

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  • 1. Morgan McKinley | SydneyHiring Market Update - January 2011 morganmckinley.com
  • 2. Hiring Market Update, Sydney January 2011 INTRODUCTION Australia came out of the global financial crisis at such an impressive rate that halfway through 2010, the IMF predicted that its economy would continue to grow throughout the year and into 2011 faster than any other advanced nation’s economy. In the end, a slight slowdown resulted in a 2.2% final growth figure for last year, rather than the +3% predicted 1. Due, in no small part, to higher interest rates in Q3 and Q4, this slowdown did not halt what was an impressive year in a number of areas. The Australian dollar finished the year as the second strongest currency in the world for 2010 2; in US dollar terms, the Australian share market outperformed the global index; and the four major Australian banks posted a collective 2010 profit of $21 billion 3. Economists are predicting a healthy 3.5% GDP growth for 2011, so how will this positive outlook influence the growth and hiring plans of Australia’s leading employers? To find out what the next 12 months will bring for the hiring market in Sydney, global professional recruiter Morgan McKinley recently surveyed over 700 senior level operational and HR managers working across financial services and commerce & industry in Asia Pacific. As part of our ongoing commitment to keep our clients and candidates up to date with the latest trends in the recruitment sector, we asked them about their hiring plans for 2011 and the challenges they expect to face in the Sydney jobs market over the coming year. In this Hiring Market Update, you will find a summary of the survey results. To make it as relevant as possible to you, the results have been separated into two sections: financial services and commerce & industry. We trust that you will find this information useful and we welcome your feedback. Vanessa Harding-Farrenberg & Louise Langridge | Joint Managing Directors | Morgan McKinley Sydney T: + 61 (0) 2 8986 3104 or + 61 (0) 2 8986 3103 E: vharding@morganmckinley.com.au or llangridge@morganmckinley.com.au 1 International Monetary Fund: http://bit.ly/9s4JEk 2 The Daily Telegraph: http://bit.ly/eCVI36 3 Sydney Morning Herald: http://bit.ly/hoqYJwAustralia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 3. Hiring Market Update, Sydney January 2011 KEY FINDINGS Financial Services • The majority (83%) of employers in Australia’s financial services sector have confidence in the country’s economic outlook for 2011, with 89% expecting growth in business revenue. • This confidence is underlined by 88% of financial services employers considering hiring, with 37% stating they will definitely hire over the next 6-12 months. • Recruitment is expected to be predominantly replacement hiring according to 66% of respondents. • Nearly three quarters, (72%) of managers surveyed expect an increase in salaries. • In addition, 94% of all those asked expect bonuses to be paid and 53% expect them to be at a similar level to last year. • Talent retention was anticipated to be the main personnel challenge for financial services managers, with 46% citing it as a concern ahead of talent attraction. Commerce & Industry • Across commercial businesses compared to financial services, fewer hiring managers (66%) had complete confidence in Australia’s economic outlook while 80% were still expecting growth in revenue this year. • Despite less confidence, 92% of employers in commercial organisations have plans to hire, with (63%) stating they will definitely hire in the coming 12 months. • More than two thirds (69%) of commercial employers expect to see salaries increase over the course of 2011. • In addition, 83% of those surveyed say bonuses will be paid and a healthy 56% of respondents predict they will be more than 5% higher than the previous bonus round. • Talent retention was also expected to be the main personnel challenge in 2011 according to 46% of managers across commercial businesses.Australia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 4. Hiring Market Update, Sydney January 2011 FINANCIAL SERVICES Market Trends In a recent survey of senior level operational and HR managers working across a range of financial services institutions in Sydney, Morgan McKinley found that 83% have confidence in the country’s economic outlook for 2011. Of those surveyed, 89% are expecting growth in business revenue, the majority of whom (67%) said it will be organic rather than through acquisition. How would you rate your confidence in Australias economic outlook over the next 6-12 months? (Financial Services) The Reserve Bank of Australia has said that the 0.0% 3.9% 1.9% 15.5% continued rise of China as an economic superpower will further strengthen the Australian economy in 2011 due to the well-established links between the nations 4. This is supported by our survey which found that 76% of hiring managers would be targeting Asia Pacific 78.7% markets as the main area of international growth this Very confident Confident Not sure Not very confident I think it w ill w orsen year. This survey of financial services employers also highlighted that M&A activity is likely to increase driven by cross border deals. The risk and compliance functions are likely be busy in the face of ever-changing regulation; and back office roles will gain more importance with ‘simplification’ strategies being implemented. Do you expect basic salary offers within your business to increase, decrease or stay the same In terms of salary trends in over the next 12 months and by what %? 0% 10% 20% 30% 40% 50% 60% 70% financial services, 72% of More than 26% increase 0.0% employers expect some 21 to 25% increase 0.0% 0.0% increase in salaries, though 16 to 20% increase 11 to 15% increase 1.9% only to stay in line with inflation. 6 to 10% increase 6.8% Nearly all those surveyed (94%) 1 to 5% increase 63.1% 0% 28.2% do expect bonuses to be paid, 1 to 5% decrease 0.0% although more than half of all 6 to 10% decrease 0.0% 11 to 15% decrease 0.0% respondents (53%) predict that 16 to 20% decrease 0.0% they will be at a similar level to 21 to 25% decrease 0.0% More than 26% decrease 0.0% last year. Half of managers (51%) state they are not making any significant changes to the structure of compensation packages.4 The Australian: http://bit.ly/dfzXtYAustralia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 5. Hiring Market Update, Sydney January 2011 Recruitment Prospects Employers’ confidence in the economic outlook is supported by the positive reaction in our survey that 88% of financial services employers are planning to hire over the next 12 months. Half of respondents (51%) said they would definitely be recruiting, while 37% said hiring was a possibility. Will you be hiring over the next 6-12 months? (Financial Services) Most managers, (84%) expect this hiring to be on a permanent basis. If economic growth continues 37% and the financial services sector blossoms, a number of opportunities will open up externally for 50% talented professionals. Coupled with the traditional movement in the jobs market caused 13% Yes No Maybe by bonus payouts in areas such as investment banking and capital markets, replacement hiring will be crucial for employers and the survey shows that 66% of managers surveyed believe this would indeed drive their recruitment plans in 2011. Following the global financial crisis, a number of large organisations are currently looking to create or expand their platform in Australia, possibly also moving into new sectors. Such business development plans explain why 44% of managers surveyed were looking to increase headcount, with the majority of new hires expected to be at an associate or junior manager level. Personnel Challenges For employers, one downside of an upturn in the market is facing the possibility of key talent moving What do you think are the main personnel challenges you will face over the externally to further their careers elsewhere as a next 12 months? (Financial Services) wealth of new opportunities open up in their50% 45.6% specialist fields.40% 31.1% 29.1%30% 25.2% 21.4% Managers’ concerns about this were illustrated in20%10% 4.9% 7.8% 4.9% the survey: talent retention was considered the0% main personnel challenge to be faced this year by management Remuneration Diversity & Other (please attraction retention redundancy Benefits & Talent inclusion rewards Talent Handling Change specify) close to half (46%) of all financial services employers.Australia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 6. Hiring Market Update, Sydney January 2011 To retain the best people, the most popular solution was seen by 43% to be increased training and development opportunities, while 28% planned to increase salaries 26% intend to focus on driving and employee engagement as an effective talent retention tool. Other key personnel challenges identified for the year ahead in the financial services sector were the management of benefits and rewards, a concern to 31% of respondents; change management, flagged by 29% and talent attraction which was seen as an issue by 25%. What strategies are you planning to put in place to combat talent attraction issues? (Financial Services) 40.0% 37.5% 37.5% 34.4% 35.0% 31.3% 30.0% 25.0% 21.9% 21.9% 21.9% 18.8% 20.0% 15.0% 10.0% 6.3% 6.3% 3.1% 3.1% 5.0% 0.0% 0.0% Direct recruitment via job Direct recruitment via Compensation and External recruitment development/investment Internal Referral Corporate social None Corporate Branding and Other Career opportunities Work - life balance Other (please specify) responsibility boards/advertising schemes social media benefits Training and in people firms PR What strategies are you planning to put in place to combat talent retention issues? (Financial Services) 45.0% 42.6% 40.0% 35.0% 30.0% 27.7% 25.5% 23.4% 25.0% 19.1% 20.0% 17.0% 14.9% 14.9% 15.0% 8.5% 10.0% 6.4% 4.3% 5.0% 0.0% Implementing management Performance Increase in Increase in remuneration None development Other (please engagement deployment Attraction Resource new benefits and cross Increasing Employee bonuses salaries training & Reward & & rewards specify) brandAustralia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 7. Hiring Market Update, Sydney January 2011 COMMERCE & INDUSTRY Market Trends The senior managers surveyed across commerce and industry businesses had slightly less confidence in the economic outlook for Australia than their counterparts in the financial sector with only 65% giving a favourable response. Despite this, 80% were still expecting to see growth in their business revenue in the coming year with 61% of these anticipating organic growth rather than acquisition. How would you rate your confidence in Australias economic outlook over the next 6-12 months? (Commerce & Industry) As businesses focus on growth again, 9% 0% 14% investment should see a demand for commercially focused and project 26% implementation roles. Process simplification will also be high on the agenda with a likely increase in requirement for the skills of Six Sigma and 51% business process re-engineering experts as well Very confident Confident Not sure Not very confident I think it w ill w orsen as change management professionals. Salaries are expected to rise during 2011, with 69% of employers in commerce and industry businesses anticipating increases, although the majority of those asked (67%) see any rise being minimal and purely to reflect inflation rates. Bonuses are expected to be paid as usual by 83% with more than half (56%) predicting that they will be over 5% higher than the previous round of bonus payments. There appears to be little cause for concern over remuneration among those surveyed, with 63% having no plans to restructure the compensation packages they offer. Do you expect basic salary offers within your business to increase, decrease or stay the same over the next 12 months and by what %? 0% 10% 20% 30% 40% 50% 60% More than 26% increase 0.0% 21 to 25% increase 0.0% 16 to 20% increase 2.9% 11 to 15% increase 2.9% 6 to 10% increase 14.3% 1 to 5% increase 48.6% 0% 31.4% 1 to 5% decrease 0.0% 6 to 10% decrease 0.0% 11 to 15% decrease 0.0% 16 to 20% decrease 0.0% 21 to 25% decrease 0.0% More than 26% decrease 0.0%Australia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 8. Hiring Market Update, Sydney January 2011 Recruitment prospects Any lack of confidence in the Australian economy is not set to hinder recruitment plans for commerce & industry organisations. Unemployment rates in Australia have been steadily dropping over the past 12 months and are predicted to fall as far as 4.5% in 2011, with job advertising steadily climbing in the opposite direction. Growth plans are very much in place among those surveyed, with 92% of the employers having plans to hire. Of these 63% said they would definitely be recruiting, while 29% said they may be hiring over Will you be hiring over the next 6-12 months? the next year. The majority of hiring activity will be (Commerce & Industry) for permanent roles, according to 78% of managers surveyed, while almost half (47%) plan to add 29% headcount, indicating short term plans for expansion. As in the financial services sector, increased 62% 9% business activity tends to trigger some movement in the jobs market, as talented professionals in Yes No Maybe specialist roles seek new opportunities elsewhere. Anticipating this, 63% of the senior managers interviewed were expecting to have to hire replacements. They were also predicting that much of the talent on the move would be experienced professionals, with the majority of their expected hiring being at the intermediate to senior level. What do you think are the main personnel challenges you will face over the next 12 months? (Commerce & Industry) Personnel Challenges Replacement hiring may be an immediate 51.4% 54.3% 60% solution, but looking further ahead, 54.3% 50% 40% 28.6% of employers in commercial businesses 30% 14.3% 11.4% 11.4% 20% 8.6% 8.6% acknowledged that talent retention would 10% 0% be the main personnel challenge they re d u n d a n cy D ive rsity & a ttra ctio n re te n tio n management Be n e fits & R e m u n e ra tio n Oth e r (p le a se in clu sio n re w a rd s Ta le n t Ta le n t H a n d lin g C hange sp e cify) would face in 2011. In addition, 51.4% also saw talent attraction as a major issue to be addressed this year. To tackle the talent retention challenge, 44% of managers plan to look into their training and development offerings to keep key staff motivated enough to continue their careers within the same company. To attract new people, 44% said they would be looking at promoting an attractive work-life balance, with solid career opportunities and development also on the agenda.Australia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 9. Hiring Market Update, Sydney January 2011 What strategies are you planning to put in place to combat talent attraction issues? (Commerce & Industry) 50.0% 44.4% 45.0% 40.0% 37.0% 35.0% 29.6% 30.0% 25.9% 25.0% 20.0% 15.0% 11.1% 11.1% 11.1% 11.1% 11.1% 10.0% 7.4% 7.4% 7.4% 5.0% 0.0% 0.0% Direct recruitment via job Direct recruitment via Compensation and External recruitment development/investment Internal Referral Corporate social Corporate Branding and None Other Career opportunities Work - life balance Other (please specify) responsibility boards/advertising schemes social media benefits Training and in people firms PR What strategies are you planning to put in place to combat talent retention issues? (Commerce & Industry) 60.0% 50.0% 50.0% 40.0% 31.8% 30.0% 22.7% 18.2% 18.2% 20.0% 9.1% 9.1% 9.1% 10.0% 4.5% 4.5% 4.5% 0.0% Implementing management Performance Increase in Increase in remuneration None Other (please deployment engagement development Attraction Resource new benefits and cross Employee Increasing bonuses salaries training & Reward & & rewards specify) brand At Morgan McKinley, we hope this research has provided some interesting insight into future trends within the professional jobs market in Sydney. To discuss any of the points raised or your recruitment requirements please contact Morgan McKinley on +61 (0)2 8986 3100. 5 The Australian: http://bit.ly/fJ6PptAustralia | Dubai | Hong Kong | Ireland | Japan | Netherlands | Singapore | UK morganmckinley.com
  • 10. Level 10, 17 Castlereagh Street Sydney, NSW 2000 Tel: +61 (0)2 8986 3100 morganmckinley.com