This quarter’s Hudson Report: Employment Trends[1] points to a strong outlook for the jobs market for 2015, with employer intentions to hire reaching their highest level since Q2 2012. The surge of confidence is reflective of the structural transformation underway in the Australian workforce, and the subsequent skillset changes that are necessary to compete in a post-GFC world.

According to Hudson, net hiring intentions for Q1 2015 recorded their largest quarterly rise since Q1 2010, with a net 18.7% of employers looking to increase permanent staffing levels in the first three months of the year, up 5.6 percentage points (pp) on last quarter.

“Despite lukewarm economic conditions and recently released weak GDP figures, Australian employers are optimistic about the year ahead. While the outlook is buoyant, the thirst for talent is centered on specific sectors and role families that support business transformation. These often newly created roles are critical to future success and profitability and as such may be less impacted by broader economic trends in the months ahead,” said Dean Davidson, Executive General Manager, Hudson Australia.

Transformation in QLD and NSW drive national momentum

The strong Queensland result is heavily influenced by the public sector. With a government in pre-election mode, there is a considered push to deliver upon the current transformation programs of work and front-line projects.  A net 20.4% of employers in Queensland are looking to increase headcount, an uplift of 1.9pp.

“The public sector continues to drive permanent and contracting growth as government look to bring in talent with the relevant skills and experience from the commercial sector,” said Mr Davidson.

NSW has also seen a wave of confidence with a net 19.4% of employers planning to hire early next year, an increase 9.4pp, largely driven by change and transformation in the financial services sector. According to the report, a net 36.9% of hiring managers plan to increase their financial services headcount in Q1 2015, surging 16.8pp for the quarter.

“Financial services teams have recognised that the landscape has permanently changed and are driving significant transformation projects. Those professionals with exposure to agile environments are highly sought after as are compliance and risk professionals who can help organisations navigate the plethora of regulatory change on the horizon.”

The legal profession has been a dominant force in NSW as well as nationally with a net of 36.9% of hiring managers looking to increase headcount in Q1 2015. There is strong demand for mid-level lawyers in private practice with organisations backfilling roles that were deliberately left unfilled from past years.

ACT shrugs off budget uncertainty

Employers in the ACT have a renewed sense of confidence with net permanent hiring intentions surging 19.2pp to 14.5%.

“The uncertainty created by the mid-year federal budget fuelled weak hiring intentions in the nation’s capital earlier this year. However the delay in implementation has seen employers shrug off the negativity, with growth coming through, not just in government, but also the ACT’s commercial market,” said Mr Davidson.

ICT drives contract growth

A net 14% of employers are intending to increase their contracting/temporary workforce in Q1 2015, up 3.2pp on Q4 2014 and 9.4pp compared to one year ago. The ICT profession is leading contracting hiring intentions significantly, with a net 23.7% of businesses looking to hire in Q1 2015.

“ICT is fast becoming the dominant force behind the contracting market in Australia. We have seen demand for strong project managers increase over the past 18 months as large transformation projects have reached implementation stage, and we don’t see this changing in the New Year,” Mr Davidson said.

“Businesses are investing in personnel who can really support them to deliver key projects and ICT is becoming an increasingly important component of business growth.”

Employers seeking real contributions to business growth

According to Mr Davidson, one key theme emerging across Australia is an increasing demand for employees who will have a real impact on businesses’ bottom lines.

“We are seeing less demand for reporting and transactional roles and a shift towards roles that underpin future growth opportunities. The business environment remains challenging for most sectors and so businesses are focused on creating positions – and seeking out employees – that are really going to add tangible value.”

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Dean Davidson

New research from Hudson, a leading provider of specialised recruitment, talent management and RPO solutions in Asia Pacific, reveals an optimistic outlook for the end of year with intentions to hire across Australia reaching the highest level in 18 months.

On the back of the recent drop in the official unemployment rate, the latest Hudson Report: Employment Trends[1] found that the number of employers looking to increase headcount in the final quarter of 2014 rose to 23.9% – the highest level since Q2 2013. The 2.7 percentage points (pp) increase over the previous three months also represents the highest quarterly rise recorded in almost four years.

The positive sentiment is consistent across every state in Australia, excluding only the ACT. Positive hiring intentions for the final quarter of the year also increased in seven out of the ten professions surveyed.

“Hiring intentions are all about sentiment, and employer sentiment has improved markedly,” said Dean Davidson, Executive General Manager, Hudson Australia. “Over recent weeks, we have seen improvements in a number of indicators of employment conditions [2] and our research shows significantly more employers are looking to hire than to fire in the final three months of this year.”

Positive intentions across states and professions

• In Queensland, the picture is particularly promising, with the number of employers who are looking to boost headcount rising by 2.7pp to 27.8%. Demand for legal professionals continues to be strong while accounting and finance staff with blue-chip backgrounds are in short supply
• In Western Australia, the number of employers looking to increase headcount has surged by 7.6pp to 24.7%. This increase is also largely driven by intention to hire legal professionals,  increasing 35pp
• The percentage of employers in Victoria who are looking to hire has risen by 4.5pp to 25.3% with particularly strong demand for talented sales & marketing professionals
• While the number of employers in NSW looking to boost permanent headcount fell by 0.6pp to 21.9%, those looking to increase their office support teams jumped 13pp
• The ACT continues to lag the other states in positive hiring expectations, with one in five employers looking to reduce permanent headcount, a drop from one in three last quarter.

Across 10 skilled professions in the survey, the legal profession was a clear winner, with the number of employers looking to boost permanent headcount of legal professionals soaring over the last three months by 20.7pp to 44.8%.

“We are seeing a continued increase in the need for front-end transactional lawyers within private practice, especially those with 3-5 years experience. Firms are now playing catch-up after many years of downsizing,” said Davidson.

Hiring expectations for Sales, Marketing & Communication professionals is also strong. Boosting the digital bench-strength of marketing teams is a key focus for many employers over the coming months.

A war for talent

The latest Hudson Report also found that 60% of hiring managers believe there is a talent shortage, with nearly 90% saying that sourcing the right talent is the most challenging aspect of the recruitment process.

“During the slower growth of the past 18 months, organisations may have felt comfortable waiting to fill current – and potential – open positions. But the reality is that organisations are already struggling to identify the right talent and given positive hiring expectations for the fourth quarter this challenge is only going to increase over the coming months and into 2015,” said Davidson.

“Make no mistake, there is a war for talent, and a challenge in finding the right people for key positions. To stay ahead of the competition, organisations need to establish a clear understanding of the skills and other attributes needed for their important positions, continually manage a talent pipeline and ensure that they are delivering a compelling employee value proposition.”

Recognising the positive sentiment and opportunities this will present, Hudson itself has invested in its local talent, increasing its team in Australia by over 30% in 2014 to ensure that it can meet the needs of its partners.

“The latest Hudson report reflects the optimism we are seeing in the market, with the economic environment –record low interest rates, low inflation and no major economic shocks on the horizon – all conducive to business growth. In anticipation of this growth we’ve ramped up our team to help both employers and candidates alike win the war on talent,” concluded Davidson.

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