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What the jobs market is telling us about the Australian economy

Pitt Street Mall, George Street and Elizabeth Streets in the CBD in Sydney, Tuesday, December 26, 2017. (AAP Image/Dean Lewins)

While economists keep a tight eye on indicators like GDP growth and consumer prices to gauge how the economy is going, there are some insights that only the recruitment experts can shed light on.

So: what’s going on in the jobs market?

Yahoo Finance asked a few recruiters about the trends they’re seeing in the labour market at the moment, and what this is saying about the economy:

The ‘two-speed job market’

Unemployment is ticking up – but in reality, some industries are doing better than others, creating a “two-speed job market,” according to recruitment firm Robert Half director Andrew Morris.

“While there is currently a surplus of jobseekers in the market, there is a shortage of technically-skilled talent required to tackle disruptive market forces, such as digitisation and ongoing regulatory reforms,” he said.

“Roles requiring specialised professionals - such as in the fields of finance, accounting, and IT - have sustained demand across industries despite general uncertainty facing the economy and jobs market.”

This dip in economic growth means we’re seeing an increase in unemployment, a decrease in the availability of full-time roles, and stagnating participation rates across most sectors, Morris said.

Economic and employment market uncertainty has made companies cautious of hiring or increasing labour costs like salaries. 

But while businesses aren’t expanding their workforce, they’re still hiring replacements and for roles required to gain a competitive advantage.

“Ongoing digitisation efforts has sustained growth in modern service sector like IT and finance and protected them from some of the broader uncertain market forces.

“This has stimulated sustained hiring needs for skilled professionals who can aide in digitisation, cyber-security, and virtual banking initiatives amongst others,” said the recruitment firm director.

Infrastructure spend is hiking up

Speaking to Yahoo Finance, Hays ANZ managing director Nick Deligiannis said the pipeline of infrastructure projects was good news for the economy.

“Infrastructure spending is underpinning employment activity, particularly rail and roads construction,” he said, adding that those in demand included civil construction professionals with rail and road experience such as engineers, project managers, contract administrators.

“Infrastructure investment and the steady pipeline of large projects will help bolster the economy. This tells us that the economy will be sustained by the commencement of new infrastructure projects and the expansion of existing infrastructure teams,” Deligiannis said.

Banks are making strategic hires

In a post-Banking Royal Commission era, the financial services sector is picking up the pieces – and when it comes to sticking to the rules, financial institutions aren’t taking any chances.

“Organisations are firming up their risk and compliance culture and frameworks. As a result, vacancy activity is very high at all levels in risk and compliance,” said the Hays managing director.

But financial services is only one area where demand is rising for specialists who can “meet specific needs and add real value”.

“This tells us that employers are willing to invest strategically in their headcount, creating new roles for expert skilled professionals. These new jobs will improve the health of the economy,” Deligiannis said.

Employee turnover is higher

With wage growth refusing to rise, workers are jumping ship as it becomes the only option to score a salary increase – and this is a good thing.

“The economy remains active as it can support the high number of people changing jobs to secure a higher salary increase. Such movement would not be possible in a contracting economy in which employers were putting recruitment activity on hold,” said Deligiannis.

“Instead, skilled professionals are confident that the job market can not only provide them with a new opportunity but is now their best option of gaining a pay rise.”

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