The Australian economy is expected to see mixed conditions over the next six months. While commodity prices and consumer sentiment have increased, boosting growth, housing investment and business investment are slowing. The unemployment rate dropped to 5.6% in September unexpectedly. Over 60% of businesses are actively reshaping work to blend contingent and regular employees for talent needs. Freelancing and independent contracting are growing significantly.

1. Monthly Media Brief
Employment | The Economy | Contract Work
A CXC Global Knowledge Initiative
October 2016

2. THE ECONOMY
The following, a summary of the coverage around the economic outlook for
Australia for the period: Sept-Oct 2016 (date: 3 November, 2016)

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Economic Outlook
This week, the reserve bank decided to keep
interest rates at a record low 1.5%. With a more
positive economic outlook, & sentiment shifting to
a rosier perspective, it’s anticipated the next move
for the RBA will be a rate cut, not hike - one likely to
happen later, rather than sooner
CBA’s chief economist, Michael Blythe, had tipped
the bank would cut rates on Tuesday this week, but
has since pointed to the bank backing away from
views that house prices are cooling, stating ‘prices
in some markets have been rising briskly’
Subtle changes to the language in the RBA’s
statement this week, indicated that new Governor,
Philip Lowe, is happy to keep rates on hold for an
extended period, but wouldn’t hesitate to ease if
the conditions warranted such a move
The RBA is a little more concerned about the
housing market, and isn’t completely convinced of
a sustained pick-up in employment

4. There’s been a recent resurgence in commodity prices, elevating
Australia’s terms of trade and bolstering our dollar: this paints a
more positive picture for growth
Economic Outlook
Having said that, many economists
believe the commodity convalescence -
especially in coal - to be temporary,
with the expectation that coal will
decline eventually
September’s CPI inflation report saw
interest rate markets scale back
expectation of a further rate cut from
the RBA this year
Just ahead of the RBA’s announcement
this week, the Aussie dollar slipped
lower against the Greenback, as
investors awaited the RBAs rate
decision

5. Consumer sentiment rose by 0.3% in
September compared to August, when
it increased 2%. Hence the index was
up a healthy 8% on Sept last year
Underlying inflation is
soft, however
Australia’s consumer
sentiment for the
period edged higher as
an improvement in
personal finances made
people more likely to
splash out on big ticket
items
Sentiment may have
been supported by
news last week that
Australia's economy
grew 3.3% in the year to
June, marking 25 years
without a recession
Economic Outlook
.3%
3.3%

6. In summary…
economic conditions in Australia over the next 6
months are expected to be mixed: what’s driving
that outcome is the combination of a softness in the
investment sector – both business investment,
where we’re seeing a transition from the mining
sector to the broader economy, – and a weakness
now emerging within the housing sector, particularly
investment in new dwelling construction. We’re
seeing an overbuild in new apartments and once
that tapers off, we should see a slowdown more
generally within housing investment
Economic Outlook

7. Finland
Sweden
Estonia
Lithuania
Poland
Latvia
France
Germany
Spain
Italy
United Kingdom
Cyprus
Malta
Portugal
Ireland
Romania
Bulgaria
Greece
Globally, the Brexit outcome and how that
plays out in terms of renegotiated trade policy
between the United Kingdom and European
Union member states is one to watch.
Whether the EU member states allow free
trade, or if they are more punitive in how they
deal with the UK could slow down the
European economy even more so than
anticipated
Economic Outlook
Problems associated with European debt still
exists. What’s going to happen with Greek
debt, Italian debt, Portuguese debt, are
influencers that are starting to bubble to the
surface

8. The Chinese economy is still one to watch.
The debt levels in China are increasing,
particularly private sector debt. Issues
around the housing market and housing
bubble in China are important, but the
Chinese Government has still got a strong
hand to play in the adoption of new
economic policies which could see about
$250 billion worth of investment activity
occur, and help stabilise the Chinese
economy going forward
Economic Outlook

9. JOBS OUTLOOK
The following, a summary of the coverage around jobs outlook for Australia for the
period: Sept- Oct 2016.

10. Australia's seasonally adjusted unemployment rate
unexpectedly dropped to 5.6% in September,
compared to an upwardly revised 5.7% in August and
below market estimates
In September, the seasonally adjusted labour force
participation rate came in at 64.5% from 64.7% in
the month prior
Employment fell 9,800 to 11,947,200: full-time
employment decreased 53,000 to 8,105,300 and
part-time employment increased by 43,200 to
3,841,900
Labour Force
Participation Rate
Unemployment
Rate 5.6%
Employment
Jobs Outlook

11. Over the past 12 months, employment
increased by 163,134, the smallest annual
gain recorded since April last year. In
percentage terms, employment grew by
1.38% over the past year, also the slowest
pace since April 2015
Jobs Outlook
Part-time employment has grown by 5.4%
over the past year, the fastest pace seen
since January 2010. On the other hand, full-
time employment has fallen by 0.4%, the
first decline registered since April 2014. It
now sits at the lowest level since February
2013
According to the ABS, the largest
employment increase was registered in
New South Wales with employment rising
by 6,700 persons. Victoria recorded the
largest decrease in employment of all the
states and territories at 11,700. Along with
New South Wales, Tasmania was the only
state to record a lift in employment
Unemployment Rate in Australia averaged
6.93% from 1978 until 2016, reaching an all
time high of 11.10% in October of 1992 and
a record low of 4% in February 2008
(unemployment Rate in Australia as
reported by the Australian Bureau of
Statistics)

12. Labour force participation slid from
64.7% to 64.5%. It now sits at the
lowest level seen since May 2014, falling
from its recent peak of 65.3% in
November last year
Explaining the slide over the past year,
labour force participation among males
dropped to 70.1%, the lowest level
seen in the history of the ABS survey
Female participation held steady at 59.1%
Jobs Outlook

13. CONTINGENT
WORKFORCE COVERAGE

14. Nearly two thirds of all businesses are actively reshaping how work
is completed across the enterprise, blending a mix of contingent
workers and payrolled employees to better leverage talent as a
business differentiator, according to the research ‘The State of
Contingent Workforce Management 2016-2017: Adapting to a New
World of Work’ released by Ardent Partners and SAP Fieldglass
Contract Work
According to the research, 63% of organisations are rethinking how
work is executed – ranking it as the top adaptation strategy
currently being deployed in the shifting business and talent
engagement environment. This transformation in executive thinking
digs into the core of every corporate project and initiative, allowing
for projects to be handled by a broader and more diverse collection
of talent, including freelancers, independent contractors and gig
workers, the report said

15. Some of the additional findings from the report include:
.
01 Best-in-Class CWM companies deploy a variety
of strategies to outpace the general market
best-in-Class companies excel in real-time
visibility into spend-and supplier-led aspects
of CWM (68% vs. 25% for all others), conduct
regular reviews of worker and enterprise
relationships (74% vs. 49%), leverage VMS
platforms (72% vs. 46%), and maintain
comprehensive onboarding and offboarding
processes (79% vs. 55%)
02
Contract Work
Real-time sourcing is the top strategy for
talent engagement
overall, 71% of businesses are leveraging
social, mobile and online talent networks to
discover new talent. Other popular strategies
include increased hiring of ‘senior candidates’
for contract roles (67%), targeting millennials
as a prime source of skill sets (65%) and
formalising a companywide ‘agile talent’
acquisition strategy (61%)

16. Some of the additional findings from the report include:
.
03 04
Contract Work
Cost savings is no longer the top driver for
executing a contingent workforce
management program
several years ago, the report said, costs
(currently at 32%) would have placed ahead
of talent engagement (51%) on the priority
scale. As the gig economy continues its rapid
expansion, discovering new talent and
managing compliance (62%) have taken on
more important roles
As the gig economy takes shape, businesses will
generate value leveraging an evolving ‘non-
employee workforce technology ecosystem’
core traditional platforms such as Vendor
Management Systems (VMS) and Managed
Service Provider (MSP) networks provide a
‘centralised source of truth’ to control and
manage all forms of non-employee talent.
Overall, 72% of organisations believe such an
ecosystem effectively addresses talent,
spend, supplier and quality aspects of non-
employee workforce management

17. Contract Work
Gigster’s CEO Roger Dickey believes that by 2020,
40% of America’s workforce will be freelancers. His
assumption is backed up by Intuit’s 2020 Report, but
anecdotally hebelieves that by 2025, at least half of
U.S. workforce will be freelancing, either entirely or
as a side job
Gigster is a software/app development platform,
which farms out work to IT, coding, programming
freelancers: ‘Gigster lets top-gun programmers work
how they want, when they want’. The site is invite
only, accepts around 1% of applicants, & has 400
developers, 200 product managers and 100 designers
servicing more than 1,000 clients including Airbus,
World Bank, MasterCard and IBM
In other news in the contractor & gig economy,
software development skills are proving to be
incredibly lucrative for freelancers: thanks to the
explosion of apps across consumer and corporate
culture, coding is the hot skill of the moment.
Producing a huge amount of high-quality code is
drawing $500k incomes for freelancers (Gigster)

18. A new study by McKinsey Global Institute has likened the
shift in the nature of working today, thanks to the digital
revolution, to that of the Industrial Revolution: (see chart)
94 million people in the more developed nations of the
European Union (EU-15) are independent workers, according
to the McKinsey study. Up to 68 million people in the US fall
into the same category. Combined, that represents some
28% of their combined working-age populations. (But half of
those are full-time workers moonlighting on the side)
On balance, independent workers are satisfied more often
than not with their employment. The McKinsey survey found
that 68% of those who make most of their money from
independent work would like to continue that arrangement.
Also, 32% of those who supplement their work with
freelance jobs would like to make most of their living from
independent work. Even among traditional workers, 12%
would like to go freelance as their primary source of income
Contract Work

19. ‘The Millennial Myth’ is the assumption that most independent millennials are drivers for Uber. The fact is, older Americans aged 55
- 75 are nearly four times more likely to be independent workers than 16- to 24-year-olds, according to a study by Harvard
economist Lawrence Katz and Princeton economist Alan Krueger. And independent workers are twice as likely to use offline means
of finding work or customers offline rather than new online platforms
.
Contract Work

20. Not everyone believes the independent workforce is growing that
much (US data). According to data from the Bureau of Labor
Statistics (BLS), there are fewer self- employed workers today than a
decade ago. And the number of workers with multiple jobs – a
hallmark of the gig economy – has barely changed since 1994. “The
evidence on recent growth in the independent workforce is thin,”
the McKinsey report states
Having said that, the BLS hasn’t done a survey since 2005, hence the
Katz & Kruger study is an attempt to update it: it’s this survey that
leads them to conclude that independent workers’ share of the
workforce has risen from 10.7 percent in 2005 to
15.8 percent by 2015
Finally from this study, the internet-fueled gig part of contingent
workforce is growing furiously. In one year, Uber doubled the
number of daily rides it handles from 1 million to 2 million. Between
2012 and 2015, the number of adults using digital platforms to find
work grew an astonishing 47-fold, according to a 2016 study by the
JPMorgan Chase Institute
www.bls.net
Contract Work

21. http://www.businesstimes.com.sg/
https://data.oecd.org/australia.htm
http://www.businessinsider.com.au/here-comes-
australias-jobs-report-2016-10 http://bit.ly/2eXFXBp
http://prn.to/2eXFAXM http://bit.ly/2fjSIVv
Sources