Category: Contingent Workforce Management

The Labor Department released its January 2020 jobs report which shows that U.S. employers added 225,000 jobs in January, which beat analyst expectations. The unemployment rose to 3.6%. The labor force participation rate rose to 63.4%. Year-over-year wage growth increased to 3.1%. U.S. employers have now added to the payrolls for 112 straight months, extending the longest continuous jobs expansion on record.

The Numbers

225,000: The economy added 225,000 jobs in January.

3.6%: The unemployment rate rose to 3.6%.

3.1%: Average hourly wages increased at a rate of 3.1% over the last year.

The Good

The overall jobs numbers for January look strong. The 225,000 jobs added to the economy beat analyst expectations of just 160,000 in the first month of 2020, according to CNN. The growth was strongest in construction, healthcare and transportation and warehousing. Some of that increase could be attributed to a warmer than average January.

While an increasing unemployment rate can sometimes be seen as a downside, in this report, it demonstrates that more sidelined workers are being pulled into a strong economy. The Washington Post reports that the labor participation rate hit a seven-year high of 63.4%.

The Bad

The strong hiring numbers in January didn’t apply across all industries. Manufacturing continued to lose jobs. Marketwatch reports that those losses were caused by the trade war with China. Jobs in retail also dropped.

Additionally, the January report included a few revisions that decreased the number of jobs created in 2019. The overall employment level for March 2019 was decreased by 514,000 jobs. For all of 2019, the number of jobs added to the economy fell by 12,000 to 2.096 million jobs.

The Unknown

Despite strong job growth, the yearly wage growth remains lower than expected. The Wall Street Journal reports that the growing number of people reentering the workforce could be a factor in keeping the rate of wage growth from increasing more quickly. However, the cause of the persistently sluggish wage growth has been debated by economists for the past couple of years.

It is also still unclear what impact the coronavirus will have on U.S. jobs numbers. The easing of the trade war with China was expected to relieve some of the strain on the manufacturing industry. However, increasing concern about the virus could impact that. The data used for the January report was collected before news about the spread of the virus.  

Statistics Canada reported that the nation’s unemployment fell to 5.6%. In December, the economy added 35,000 jobs, beating analyst expectations. The total number of jobs added in Canada in 2019 was 320,000. Average weekly wages increased 3.7% on an annual basis. Ontario, Quebec, Manitoba and Prince Edward Island all posted job gains, while declines were recorded in Newfoundland and Labrador.

The Numbers

35,000: The economy gained 35,000 jobs in December.

5.6%: The unemployment rate fell to 5.6%.

3.7%: Weekly wages increased 3.7% over the last year.

The Good

Statistics Canada reported that 35,000 jobs were added to the national economy in December, which in great part reversed the losses recorded in November. In 2019, employment increased by 320,000 or 1.7%. This was primarily due to gains in full-time work which grew by 283,000 or 1.9%. In contrast to the United States, Canada added more jobs in 2019 than in 2018. 

From an annual perspective, Ontario, Canada’s most populous province was a clear winner in job growth. Employment in Ontario increased 243,000, an impressive 3.3%. This was the largest year-over-year increase measured in December since 1987, and the growth was driven by full-time jobs in a range of industries. Quebec also posted healthy gains in 2019 adding 63,000 positions growing 1.5% over the year and was driven by full-time work. The strongest gains were from the two groups at opposite ends of the age spectrum, youth aged 15 and 24 and people aged 55 and over.

Weekly wage growth dipped in the final report of the decade on an annual basis, but it is still one and a half percentage points higher than the rate of inflation. Canada ended the year and the decade on a positive note with unemployment dropping three-tenths of a percentage point to 3.6%.

The Bad

At 3.6%, Canada’s unemployment rate was the same in December 2019 as it was in December 2018. In May, the unemployment rate dipped to 5.4% which was a record low since the start of comparable record-keeping in 1976. The ensuing months produced uneven results which disappointed observers hoping for an extended period of historic low unemployment. 

While the job gains in December were generally considered strong, they did not completely make up for the November losses. In addition, the strongest sectors for job gains was in accommodations and food service and in construction. While an increase in construction jobs in the midst of winter is considered to be a positive indicator, growth in foodservice and the hotel sector may be short-term since they are closely tied to the holiday season. Even the robust growth in Ontario posted losses in one troubled sector, posting losses for jobs in manufacturing. Most other large provinces had little significant change in their job levels in 2019.

Wage growth, while still strong, has been fluctuating throughout the year so there is no clear trend that has been established. Annual pay increases at the hourly level in some key sectors of the Canadian economy were well below that national rate of 3.6%. For example, the increase in the sales and services sector, stood at 2.6% in December, a full percentage point below the national figure.

Future Job Growth:  Geography as Destiny?

Over the past year, Ontario accounted for 76% of Canada’s job growth.  Based on last year’s numbers, almost all job increases are taking place east of Manitoba. However, when viewed on a provincial basis, these numbers can be misleading. It is instructive to look at some local growth rates to get a more accurate picture.  While British Columbia’s job market may be stagnant, Abbotsford and Victoria were ranked third and fourth, on BMO’s ranking of cities with the strongest job markets. Alberta’s relatively sluggish job market is contrasted with Calgary which added 3.3% new jobs last year, vastly outpacing the national rate.

And despite the surface geographical contrasts, the variance between the best-performing and worst-performing parts of the country is narrowing. As BMO’s senior economist Robert Kavcic notes, “job convergence is taking place all over Canada.” Canadian employers should look beyond the headlines to assess the accurate jobs situation in their markets and sectors as they plan their strategies for recruitment and retention in the rapidly evolving labour environment.

The Labor Department released its December 2019 jobs report which shows that U.S. employers added 145,000 jobs in December, which was below analyst expectations. The unemployment rate remained at 3.5%. The labor force participation rate was also unchanged at 63.2%. Year-over-year wage growth slipped to 2.9%. U.S. employers have added to payrolls for 111 straight months, extending the longest continuous jobs expansion on record.

The Numbers

145,000: The economy added 145,000 jobs in December.

3.5%: The unemployment rate held at 3.5%.

2.9%:  Average hourly wages increased at a rate of 2.9% over the last year.

The Good

The final jobs report of the decade showed another month of solid job growth. The average monthly gains for the last three months of 2019 were 184,000, which is close to the quarterly averages earlier in the year. In the last year, 2.1 million jobs were added, which is more than sufficient to keep up with the demands of population growth. There were notable monthly increases in the retail sector with 41,200 jobs added, in healthcare which was up by 28,000 and in leisure and hospitality which grew by 40,000.

From an annual perspective, many key sectors recorded job growth or were little changed.  Growth in healthcare was especially impressive. The sector added 399,000 jobs in 2019, increasing by 49,000 more positions than in 2018. Even some industries which experienced setbacks over the course of the year posted modest gains overall in 2019. Manufacturing grew by 46,000, and retail jobs increased by 9,000.

The year began with an unemployment rate of 4.0% in January and ended at a 50-year low of 3.5%. Significantly, an alternative measure of unemployment which captures those underemployed and marginally attached to the workforce known as the U-6, fell to 6.7% in December, the lowest on record going back to 1994.

The Bad

The December report confirmed that a decade of robust job growth ended with a notable slow-down. The 2.11 million jobs added last year was a drop from the 2.68 million added in 2018, and 2019 was ranked eighth for job growth in the past 10 years. With the exceptions of healthcare and leisure and hospitality, most key sectors added significantly fewer jobs in 2019 than in 2018. The transportation and warehousing sector which is closely tied to the overall economic health of both the nation and the world, added just 57,000 jobs in 2019, approximately one-fourth of the 2018 gain of 216,000.

The labor participation rate at 63.2% remained steady. However, this rate is still below the levels posted before the Great Recession. The stall in participation may indicate that no matter how low the unemployment rate falls, additional Americans who are out of the labor force are not being drawn back into it. Some economists have suggested that an underlying reason for this is the changing age demographics of the United States due to its low birth rate and aging population. This trend is not expected to change anytime soon.

Instead of posting strong wage gains at a time of historic low unemployment, the rate of growth actually decreased in December. While the 2.9% annual wage increase is still ahead of an inflation rate of just less than 1.5%, workers in many sectors are having their wages grow at a rate much lower than the national average. 

Easier to Get a Job Than a Raise

As Diane Swonk, chief economist at Grant Thornton noted: “It’s easier to get a job than a raise in this economy.” While some employers may benefit from attracting those who are seeking a new job due to their stunted paychecks, they may be just as likely to lose talent for the same reason. Adding to the challenge of extremely low unemployment, the most recent jobs opening report showed an increase in vacancies which continues to be higher than those who are unemployed.

Australia’s economy gained 39,900 jobs in November. The unemployment rate fell to 5.2% in November as labour participation remained steady. The Bureau of Statistics reports that full-time employment increased by 4,200 and part-time employment rose by 35,700.

Numbers

+39,900: The Australian economy gained 39,900 jobs in November.

5.2%: Australian unemployment fell to 5.2%.

66.0%: Labour force participation was steady at 66.0%.

0: The Business Confidence Index fell to 0  in the latest NAB release.

Upside

The 39,900 jobs added in November were a welcome reversal of the job loss experienced in October. The number of unemployed Australians decreased by 16,800 to 708,100 people. Over the last year, full-time employment increased by 144,700, and part-time employment rose by 110,200. The job gains last month helped push the unemployment rate down one-tenth of a percentage point to 5.2%. While the participation rate remained stable at 66.0%, it is at a near record-high level. In another sign of progress, monthly hours worked in all jobs increased by 2.9 million hours in November.

In seasonally adjusted terms, the largest increases in employment were in Queensland (up 17,300) and Victoria (up 13,700). Some states also had jumps in their participation rates which indicates that more of their residents are being attracted into the workforce. The participation rate increased by 0.5% in Tasmania to 61.1%, 0.3% in Queensland to 66.2% (which is higher than the national rate) and in South Australia which grew by 0.2% to 62.9%.

Downside

Part-time job gains greatly outnumbered those in full-time employment. Only 4,200 full-time jobs were added compared to an increase of 35,700 in part-time work. The only job decrease was in New South Wales, the nation’s largest state by population which shed 2,800 positions. The seasonally adjusted participation rate there also decreased by 0.2%, falling to 65.3%.

The modest reversal in job growth has not inspired many economists to express optimism regarding Australia’s near-term economic outlook with some predicting a rise in unemployment next year. Capital Economics analyst Marcel Thieliant pointed to the fall in employment advertising as a sign that November’s job growth will likely be reversed: “The continued fall in job advertisements suggests that unemployment will climb further,” he predicted. “What’s more, households’ unemployment expectations are consistent with the unemployment rate rising to 5.5% by mid-2020.”

His sentiment was echoed by others including Indeed’s economist Callam Pickering who noted that the Australian labour market is showing “signs of fatigue” with an unemployment rate that has been continuously higher than the 4.9% level posted in early 2019.

Closing the Skills Gap:  Implications for Employers

While some economists are expressing concern over future job growth, many Australian workers appear to be concerned that they do not have the right skills to succeed in the jobs that will be available. A recent study by Centre for the New Workforce at Swinburne University of Technology, in partnership with YouGov, sought to reveal how Australian workers are preparing for the future of work which includes factors like digital transformation, artificial intelligence and automation. Their findings include:

• 61% of Australian workers don’t think that their current skill set is suited for the next five years of work. This is a jump from 56% in just one year.
• Key motivators for Australian workers include learning more and being stimulated by their work. In response to what inspires them most about their jobs 46% selected ‘the nature of the work itself’ and 34% chose ‘opportunity to learn and grow.’
• For the main barriers to learning at work, 56% responded ‘not having dedicated time for learning’ and 39% cited ‘unsupportive working environment where learning is stigmatised.’
• 51% of Australian workers spend less than one hour a week at work on learning in any form which includes 20% who state that they have no learning at all on their jobs.

The results of the study show that Australian workers are both concerned about their skill levels meeting future demand and not having the time or supportive environment to acquire the skills that will help them succeed. In order to retain their valuable workforce, employers should effectively communicate the learning opportunities that are currently available and develop these programs to include the skills that are anticipated to be needed in the future. It is also important to structure the work environment and scheduling to support continuous and effective learning. A successful learning programme can also be an important tool in attracting talent and can be featured as part of a sourcing effort and building an employer brand. Enterprises can effectively leverage their employee development and learning programmes to support retention and recruitment by partnering with a recruitment process outsourcer which can share its experience and expertise on how to maximize the impact of an enterprise’s investment in the learning and growth of its workforce.

The December Labour Market Report released by the Office for National Statistics, which includes the three month period covering August through October 2019, reported that 24,000 jobs were gained as the unemployment rate held at 3.8%.

Notable figures from the December report include:

• The UK employment rate was estimated at 76.2%, 0.4 percentage points higher than a year earlier but with very little change over the previous quarter. Despite just reaching a new record high, the employment rate has had only small fluctuations over the last few quarters.
• The UK unemployment rate was estimated at 3.8%, 0.3 percentage points lower than a year earlier but largely unchanged over the previous quarter.
• Estimated annual growth in average weekly earnings for employees slowed to 3.2% for total pay (including bonuses) and 3.5% for regular pay.

Slight Job Gains after Consecutive Losses and Continued Low Unemployment

The 24,000 new jobs were welcome news after consecutive reports posting more than 100,000 job losses. The gains, while modest, beat analyst expectations, with one poll of economists predicting a median loss of 10,000 jobs. One particularly encouraging data point was an increase of 8,000 jobs in manufacturing, although a new study showed that a recent downturn in manufacturing output could have serious repercussions for the UK economy overall.  

The unemployment rate continues to be very low at 3.8%. It has not been lower since the final quarter of 1974, well before the living memory of much of the nation’s workforce. The UK economic inactivity rate was estimated at 20.8%, 0.2 percentage points lower than a year earlier but mostly unchanged over the previous quarter. The inactivity rate includes those in their prime working years who have not been seeking work within the last four weeks and/or unable to start work in the next two weeks.

The modest job gains and recent losses are viewed by some economists as part of a trend of diminished growth in employment compared to recent years. While uncertainty over Brexit may have played a role, employers have also faced challenges finding talent with the right skills for their open positions. As Tej Parikh, chief economist at the Institute of Directors, noted, “The UK’s jobs boom continues to be a big plus point for the economy, but it is slowly losing momentum. Businesses have shown a strong appetite to take on staff in recent years, and climbing employment levels have boosted household incomes, adding buoyancy to the economy. However, firms are now cutting back on new hires as it becomes harder to find the skills they need.”

Steady Decrease in Job Vacancies and Wage Growth Outpacing Inflation

The number of job vacancies has been dropping since early 2019. For the September to November 2019 period, there were an estimated 794,000 vacancies in the UK—20,000 fewer than for the previous quarter (June to August 2019) and 59,000 fewer than the previous year. (Job vacancies in the UK are reported over a three-month period beginning one month later than the other major labour market estimates.) While the fall in job vacancies has coincided with a drop in the unemployment rate, a continuing downward trend in open positions could have the adverse effect of discouraging additional workers to join the nation’s workforce next year.

The rate of annual pay growth reached 3.9% in the May-July 2019 period and was the highest nominal pay growth rate since 2008. In the August to October period, it dropped to 3.5%. While the annual pay increases are still well above the rate of inflation, there is no evidence future strong rate increases which have emerged in the past during times of very low unemployment.

Shifting Talent Pool

The period of the labour market report released today ended in October, more than a month before the national referendum, the results of which greatly increased the probability of Brexit on January 31, 2020. However, even while there was uncertainty over whether an exit from the European Union would ever come to pass, some striking migration figures began to emerge. The Office for National Statistics reported last month that net migration from the EU to the UK fell to its lowest level since 2003. In November, more than 140,000 EU citizens applied to live and work in the UK after Brexit adding to a backlog of more than 360,000 applications from those who are still waiting for a decision. At the same time, the level of non-EU migrants into the UK is reaching near record highs.

The volatile and fast-changing availability of talent from abroad adds to the already challenging conditions of extremely low unemployment faced by UK employers. Because of uncertain environment, partnering with experts in both the evolving talent market and employee acquisition such as a recruitment process outsourcer in the months to come may never have been more important as a factor to an enterprise’s success than in the year to come.

Statistics Canada reported that the nation’s unemployment climbed to 5.9%. In November, 71,200 jobs were lost. Average weekly wages increased 4.5% over last year. Job levels were lost or were relatively unchanged in key sectors of the Canadian economy. The November job losses were the biggest the economy has had since the financial crisis more than ten years ago.

The Numbers

71,200: The economy lost 71,200 jobs in November.

5.9%: The unemployment rate rose to 5.9%.

4.5%: Weekly wages increased 4.5% over the last year.

The Good

Statistics Canada reported that strong wage growth continued in November with average weekly wages increasing by 4.5% over twelve months. When viewed from an annual growth perspective, employment gains since November last year totaled 293,000 (+1.6%), with the increase largely accounted for by full-time work. Over the same period, total hours worked also grew by 0.2%.

While the job-loss numbers are significant, 20,000 of those jobs were due to the ending of temporary employment related to the recently completed federal elections. 

The Bad

Canada experienced its worst job loss in November since the Great Recession. Jobs were shed in both goods-producing industries and the service sector. 

In the goods-producing sector, fewer people worked in manufacturing which dropped by 28,000 positions and in natural resources (-6,500), with the bulk of the declines in each of these industries happened in Quebec. On an annual basis, Canada-wide employment in manufacturing was little changed, but it has declined in natural resources (-25,000 or -7.2%), mostly in Alberta and British Columbia. Job losses in the services-producing sector were led by those in public administration, where the number of workers fell by 25,000 in November.

Quebec was the hardest hit province in November where 45,000 fewer people were employed in November. This decline is primarily attributable to manufacturing and the accommodation and food services sector. Since more people looked for work in the province while jobs were dropping, the unemployment rate in the province increased by 0.6 percentage points to 5.6%.

Employment in Alberta fell by 18,000 in November, with declines happening in a number of sectors led by wholesale and retail trade. With more people seeking work, the unemployment rate in Alberta rose by 0.5 percentage points to 7.2% last month. Employment in British Columbia fell by 18,000 in November, with the losses spread across several industries. The unemployment rate rose to 5.0% in November from 4.7% in October.

Even in those provinces where the job markets did not have significant losses, unemployment rates rose. While employment in Ontario held steady in November, the unemployment rate increased by 0.3 percentage points to 5.6% as a result of more people looking for jobs. Employment in Saskatchewan was little changed, while the unemployment rate rose to 5.8% (+0.7 percentage points) as more people looked for work. There was also little employment change in Manitoba, and the unemployment rate edged up 0.3 percentage points to 5.6% in November.

The jobs report was seen by some analysts as shedding light on long-term weak spots in the Canadian economy, especially in manufacturing. Josh Nye, Senior Economist at RBC noted that there has been a steady decline in manufacturing jobs and that with ongoing trade uncertainty, there is no sign of recovery in the near future:

“That decline is pretty eye-catching. It’s one of the bigger stories. It’s one of the weaker industries if you’re tracking employment growth year-to-date, down an average 4,000 per month. Manufacturing has been weak globally this year. You’ve got rising trade tensions between the world’s two largest economies and slowing global growth that’s really been concentrated in the industrial sector.

Broadly speaking this is a sector that hasn’t generated much in the way of job growth for a number of years now so it’s hard to see that narrative changing in 2020.”

Canadian Career-Changers are Happier for Doing So. Could They Also be an Untapped Source of Talent?

The majority of Canadians who have switched careers say that they are happier because of their decision to do so according to a recent poll by Indeed Canada. Those who have been recently downsized or are otherwise concerned about their employment outlook or career future may choose to search for work outside their current field.

Almost nine out of 10 Canadians who have made a career change say they’re happier since switching career paths. Researchers polled 1,023 randomly selected full-time workers from a range of industries as well as education levels and found that 38% of them had made a complete career change at some point. Of the respondents, 35% said they were either currently thinking about switching careers or have thought about doing so. Of those respondents who have made a career change, 87% said they are happier since making the change.

Two important elements had to be a part of these Canadian’s successful career transformations.  First, the person making the career switch had to possess the skills to begin a new career or be ready and able to acquire them. Second, the employers who hired them had to have a broad view of their new employee’s potential to succeed, even if they have not had a matching job description in the past.

Rather than limit candidate sourcing to those in a given career category, employers can broaden their search to include those with different professional backgrounds that may be motivated to change careers and could be attracted to their job offerings. Identifying these individuals, especially for hard-to-fill positions in challenging markets needs the expertise and experience which is not always found in human resources departments that may already be stretched to the limit in their talent acquisition efforts. For this reason, it is a good idea to partner with a recruitment process outsourcing company with the knowledge and skills that can lead to the successful onboarding of those individuals from a wide range of career paths.

The Labor Department released its November jobs report which shows that U.S. employers added 266,000 jobs in November, beating analyst expectations. The unemployment rate fell to  3.5%, a 0.1% decrease from last month. The rate’s decrease was caused by strong job growth with little change to the labor participation rate. Year-over-year wage growth rose 0.1 percentage points to 3.1%. U.S. employers have added to payrolls for 110 straight months, extending the longest continuous jobs expansion on record.

The Numbers

266,000: The economy added 266,000 jobs in November.

3.5%: The unemployment rate fell to 3.5%.

3.1%:  Average hourly wages increased at a rate of 3.1% over the last year.

The Good

Reporting on the drop in unemployment and annual wage growth that is well ahead of the inflation may have been overshadowed by the robust (and unexpected) job growth last month. The monthly increase was the best since January’s 312,000 and well ahead of the November 2018 total of 196,000. November’s strong job expansion was fueled by gains in several key sectors. There were 45,000 health care jobs added with a jump in ambulatory health care services (up 34,000) and in hospitals (up 10,000). Over the last year, 414,000 health care jobs have been added to the U.S. economy.

Employment in professional and technical services rose by 31,000 in November and by 278,000 over the last year. Employment in leisure and hospitality continued to grow, adding 45,000 positions last month and a total of 219,000 jobs in just the last four months. Even the embattled retail sector showed modest job growth (up 2,000) which reflected rising employment in general merchandise stores (up 22,000) and in motor vehicle and parts dealers (up 8,000). 

The Bad

Some of the sector job gains are not as strong as they initially appear. The increase in retail jobs was offset by a loss of 18,000 positions in clothing and clothing accessories stores during the month that kicked off the traditional Christmas shopping season. While manufacturing gained 54,000 jobs last month following a decline of 43,000 in October, 41,000 of these were in auto manufacturing generated by thousands of General Motors workers who were returning to work after being on strike.

Despite the strong monthly report, job growth has averaged 180,000 per month this year compared with an average monthly gain of 223,000 in 2018. While the job market is expanding, it is doing so at a slower pace than last year. The most recent BLS report on U.S. job openings showed that they have fallen to their lowest level in a year and a half. While the number of jobs grew last month, the number of those employed part-time for economic reasons, which was reported as  4.3 million people, changed little in November. These individuals, who would have preferred full-time employment, were working part-time because their hours had been reduced or they were unable to find full-time jobs. Despite strong demand, employers were unable to significantly attract those in this category into the full-time workforce.

Plan for Continuing Tight Labor Markets

The November jobs report was perceived by many as demonstrating the continuing strength of the U.S. economy, despite ongoing concerns over the impact of tariffs and trade disputes. As the new year approaches, it is noteworthy that this is the first decade in which the U.S. has not experienced a major recession since the 19th century. Even as job openings fall, the number is still larger than the number of unemployed Americans. Fears of a recession being on the horizon are fading for some analysts.

As the economy grows, so does the demand for talent and businesses are planning for growth. For example, in the small business sector which has been a major driver of job growth, approximately 60% of the 654 employers surveyed in November said they planned to expand their headcount in 2020 and just 4% were planning cuts. 

While employers need to consider an array of directions the economy may take next year in their workforce planning, the optimism generated by the November jobs report indicates that expertise in both attracting and retaining talent will continue to be as crucial to the success of an enterprise in the coming years as it has been in the prosperous decade which is about to end.

Australia’s economy lost 19,000 jobs in October. The unemployment rate rose to 5.3% in October as labour participation slightly decreased. The Bureau of Statistics reports that full-time employment decreased by 10,300 and part-time employment fell by 8,700.

Numbers

-19,000: The Australian economy lost 19,000 jobs in October.

5.3%: The Australian unemployment rate rose to 5.3%.

66.0%: Labour force participation fell to 66.0%.

+2: The Business Confidence Index rose to +2 in the latest NAB release.

Upside

When viewed from a year-over-year basis, Australia’s full-time employment increased by 135,700 while part-time employment increased by 116,100. Western Australia had 6,300 job gains and Victoria added 2,900 positions. Western Australia also increased its participation rate by 0.2 percentage points to 68.3%, two percentage points higher than the national rate.

Both business confidence and conditions improved slightly during October. Despite the below-average ratings, NAB Group’s chief economist noted that there has been an uptick in both profitability and trading conditions. He also pointed to their survey which indicated that there would be ongoing employment demand of around 18,000 per month. However, that survey was completed before the release of the October report.

Downside

Australia had its sharpest job decrease in three years in October. The loss in both full-time and part-time employment suggests an overall softening of the job market. Nearly every state lost jobs including Queensland which lost 14,000, New South Wales with a decrease of 10,300 and South Australia which had a drop of 6,500 positions. With only Western Australia and Victoria posting notable job growth in October, the report can be viewed as essentially negative from a national perspective. The job losses were unexpected with some economists expecting a gain of 15,000 positions.

The number of those actively participating in the labour market also dropped, lowering the rate for a second month in a row. The underemployment rate which is a broader measure of joblessness increased by 0.2 percentage points to 8.5%. Seasonally adjusted monthly hours worked in all jobs decreased by 2.8 million hours (or 0.2%) in October.

Low Wage Growth:  A Challenge and an Opportunity for Employers

The weak jobs report came just one day after the ABS released its disappointing quarterly wage figures. The wage price index rose by just 0.5% in the quarter ending in September which brought annual growth to a tepid 2.2%. This is the slowest growth level in more than a year and fell short of both the Reserve Bank and federal Treasury expectations. 

One implication for Australian employers is that extended periods of low pay raises may lead valued employees to search for work elsewhere. 

While there are many factors that lead Australians to look for a new job and find a job offer attractive, at least one study found that salary was the most important:

“When asked what attracted them most to a workplace, the study revealed that salary came out on top, with 30% of Australians listing this at the most important factor when searching for a role.”

The slow wage growth being experienced throughout the country presents employers with both a dilemma and an opportunity. There is decreased competitive pressure to raise salaries and more good candidates may become available. To turn this situation to their advantage, some crucial questions arise. What is the correct wage level to best ensure employee retention? At the same time, what is the ideal pay package to attract talent that at least matches the offers from competitors and contributes to candidate acceptance? And how would a busy HR professional even begin to find the right answers to these questions?

There is useful information available, including data on wage ranges based on position descriptions, markets, education levels, years of experience and other factors. However, this data can be very expensive to purchase and time-consuming to review and interpret. In an economic environment in which many Australians may be motivated to search for their next job opportunity, an outside partner such as a recruitment process outsourcing company (RPO) can provide both the data and the analysis to that leads to solutions resulting in both keeping and attracting the right talent. Those enterprises that leverage both the knowledge and expertise brought by partnering with an RPO will have the tools to navigate a complex talent market and build a successful long-term talent strategy in an uncertain economic environment.