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Episode 75
117 Plays4 months ago
News for the week beginning 19 August 2024 and Question of the Week, "Do employment history gaps matter less now than they used to?"
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Transcript
Weekly News Introduction
00:00:09
Speaker
This is the news for the week beginning the 19th of August, 2024. I'm Ross Clannett.
Australian Labour Market Surge
00:00:15
Speaker
The July labour market update showed another large surge in jobs growth despite the unemployment rate rising slightly. Last Thursday's ABS data release showed that more than 58,000 people found work in Australia last month with majority in full-time roles. However, the participation rate rose to a new record high of 67.1% causing the unemployment rate to rise to 4.2% in July, up from 4.1% in June. On a state and territory basis, the ACT recorded the lowest unemployment rate at 3.6%, followed by WA at 3.7% and New South Wales at 4%. Despite the rise in the unemployment rate, ABS's head of latest statistics, Kate Lamb, said the jobs market is still resilient. Although the unemployment rate increased by 0.1 percentage point,
00:01:07
Speaker
In each of the past two months, the record high participation rate and near record high employment to population ratio shows that there continues to be a high number of people in jobs and looking for and finding jobs. The employment and participation measures remain historically high while unemployment and underemployment measures remain historically low compared with what we saw before the pandemic, she said.
Unexpected Jobs Data vs. GDP
00:01:31
Speaker
Adam Boyton, the head of Australian economics at ANZ, said he was not expecting the data to be as strong as it was. We've had GDP growth running below trend for about a year, but jobs growth has run at 3.2% over the past 12 months, Mr Boyton said. That's a strong rate of growth, and that tells us businesses are probably still feeling reasonably confident about the economic outlook.
Record Low Gender Pay Gap
00:01:55
Speaker
SEEK's latest employment report reinforced the positive July ABS results with job ads rising month on month for the first time in four months up 1.7% in July on the back of strong rises in both Queensland 2.6% and New South Wales 2.2%. Australia's gender pay gap has dropped to its lowest level on record record at 11.5% down from 12% according to new data released last week by the ABS.
00:02:24
Speaker
As of May 2024, the full-time average weekly earnings for men across industries and occupations was $2014 and for women it was $1782, a difference of $232, equating to an annual pay gap of $12,038. Two years ago, Australia's gender pay gap was 2.6 percentage points higher at 14.1%.
00:02:49
Speaker
In a statement, Prime Minister Anthony Albanese said the narrowing gender pay gap could be attributed to the government taking action on pay secrecy clauses, modernising the bargaining system, enforcing transparent gender pay gap reporting and delivering pay rises for workers in aged care. We came to government with a commitment to help close the gender pay gap and that's exactly what we're seeing, he said. The gender pay gap is calculated in Australia as the difference in average ordinary time earnings between men and women who are working full time.
Financial Updates: SEEK and High-Tech Group
00:03:21
Speaker
Reduced job ad volume in Asia Pacific impacted revenue at SEEK, the company said in its release of its 2024 financial year results last week. Revenue fell 7% year over year on a constant currency basis to $1.08 billion. EBITDA dropped 14% $469 million dollars and the after-tax loss of $60 million dollars was due to impairments and a 9% reduction in the valuation of its SEEK growth fund.
00:03:49
Speaker
SEEK ANZ revenue fell 8% year on year to $840 million dollars due to a 20% decline in ANZ job listings. The Chief Executive of SEEK and REV said he expected paid ad volumes to keep falling in ANZ this financial year. Shares in SEEK opened this week at just over $22 up 11% since the release of the 2024 results, but still 19% down on their 12 month high of $27.10 reached on the 8th of March. ASX listed IT and consulting recruit a high tech group reported operating revenue dropped 14.4% year on year
00:04:29
Speaker
to $63.6 million dollars in the financial year ended 30 June 2024. Although administration expenses increased by over half a million dollars to ah gross profit rose 16.5%. EBITDA rose 16.6% and after-tax profit increased by 10.9% to $6 million. The high-tech share price is currently trading at just over $2 down from a high of $2.40 on the 19th of January this year.
Corporate Moves: Humanforce and Global Talent Platforms
00:04:59
Speaker
The company's market capitalisation is just under $85m.
00:05:06
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Unlisted Australian company Humanforce has made an unconditional on-market takeover bid for recruitment platform LiveHire at a cash price of 4.5 cents per share. The bid follows a competitive process initiated by LiveHire several months ago to find a strategic new investor or owner for its struggling business.
00:05:25
Speaker
Live Hires directors have stated they intend to accept the offer and have recommended shareholders do the same. Human Forces Offer provides Live Hires shareholders with a straightforward cash exit and immediate value for their investment at a 75.8% premium to the 30-day volume-weighted average price. After listing in mid-2016, Live Hire was valued at around $600 million dollars in early January 2018. However, 12 months later, the company's value had tumbled by 60% and never recovered.
00:05:56
Speaker
live hire shares last traded above $0.20 in late 2022. If human force is not successful in its takeover bid, live hire is confirmed there will be significant doubts about its ability to continue operating which may involve the appointment of an external administrator. The global market for talent platforms such as Upwork and Fiverr contracted for the first time in 2023 after double-digit growth from 2019 to 2022, according to the latest talent platform update by staffing industry analysts. Gross spend fell 5% globally to US$16 billion. u dollars The largest contributor to the year-on-year decline was the healthcare segment, where talent platform growth spending fell 23% in 2023.
00:06:41
Speaker
Excluding healthcare global B2B talent platform gross market spend would have fallen only 3%. The contraction should be short-lived as talent platform revenues forecast return to growth next year.
00:06:55
Speaker
The report also noted the Americas accounts for 56% of worldwide B2B talent platform growth spend volume, despite only 12% of talent platform workers residing in the region. Asia Pacific is home to 66% of the globe's talent platform workforce.
Gen Z's Employer Preferences
00:07:13
Speaker
Telco's banks and other financial services companies were the big losers in Student Edge's recent release of Australia's top 100 Gen Z employers of 2024.
00:07:24
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Nearly 1,000 young Australians aged 15 to 24 were surveyed about their enthusiasm about working for potential employers. 79% were secondary or tertiary students and 21% were either employed or seeking work. Apple topped the poll followed by Woolworths, JB HiFi, Officeworks and Kmart. Telstra ranked 76 while Optus and Vodafone failed to make the top 100.
00:07:48
Speaker
Unsurprisingly, the list was dominated by major consumer brands while no banks or other financial institutions made the top 100. Sydney Opera House was one of only four public sector employers on the list coming in at 10th with Luna Park 27th, Taronga Zoo 60th and Melbourne Zoo 61st on the list. Being a high profile consumer brand didn't automatically guarantee a high ranking with KFC coming in at 73rd, Harvey Norman 81st and McDonald's 97th.
00:08:15
Speaker
When surveyed about their most important employer values, Gen Z proved no different from other generations with offers competitive salary, easily topping the list.
Labor Union vs. Pay Discrepancies
00:08:24
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12 percentage points ahead of career advancement in second and operates with integrity, transparency and accountability in third. Again, like other generations, Gen Z nominated job boards as their most common way of finding work. We seek nominated by 69% of participants and 55% nominating indeed.
00:08:41
Speaker
The third was via an employer's website or their social media outreach, nominated by 36% of Gen Zs. Labor hire workers at Airline Jetstar paid less than their directly employed co-workers, Labor Union TW Australia said on Tuesday. The union filed two same jobs, same pay applications to the Fair Work Commission against Jetstar, as well as against labor hire firm Altara, the union announced on its website.
00:09:09
Speaker
The union said some contingent cabin crew have a base pay of slightly over $50,000. Successful applications could result in pay rises of up to $10,000 for workers who receive the lowest pay. Some internationally based crews make as little as $2 per hour, the union has alleged.
Job Change Willingness Among Workers
00:09:29
Speaker
More than half of Australian workers, 56%, are willing to switch jobs over the next 12 months, according to Robert Half's latest survey of 1,000 full-time workers in Australia.
00:09:39
Speaker
The top five reasons stated by those open to changing roles was a better work-life balance, nominated by 56% of workers surveyed, earn more money, 51%, desire for a new challenge, 39%, greater job stability, 29%, and a lack of advancement opportunities with their current employer at 26%. British workers are even more likely to change jobs according to a so recent similar survey of 1,100 workers in the yeah UK.
00:10:07
Speaker
66% of workers studied they were looking to leave due to dissatisfaction with their current role, 11 percentage points higher than in Australia. 37% of workers in the yeah UK nominated desire for a new challenge as the top reason followed by a better salary at 36% and a lack of career advancement at 32%. The top reason for Australian workers wanting a change, work-life balance, came in at eighth on the survey of UK workers.
00:10:32
Speaker
Despite fears of an economic slowdown, 39% of employers in Australia are still experiencing recruitment difficulties, with public sector employers 46% experiencing it more than private sector employers 40%, according to the latest ah RE quarterly survey of its members.
00:10:49
Speaker
In further evidence of an inconsistent labour market, 27% of organisations in Australia are planning to make redundancies in the September 2024 quarter, up from 23% in the June quarter. However, the report found that the percentage of employees still planning to hire staff remained high at 68%.
AI Replacing Workers and Productivity
00:11:08
Speaker
However, there was a significant difference between the intention of public sector employers, 88%, planning to hire in the current quarter, compared to private sector employers at 62%.
00:11:21
Speaker
Amid rising concerns over AI's impact on employment, three in 10 companies report they replaced workers with AI this year, according to a survey released last week by resumetemplates.com. The poll of business leaders found that 90% of their companies currently use AI, with the top applications being data analysis, research and content creation. Among those using AI, 53% say it makes their workforce much more productive, and 37% say it slightly increases productivity Conversely, 7% report minimal productivity gains. And that's the news for the week beginning the 19th of August, 2024. I'm Adele Last.
00:12:10
Speaker
Question of the week this week is, do employment history gaps matter less now than they used to?
Do Employment Gaps Matter Less Now?
00:12:18
Speaker
Broadly, I would say, yes, they do matter less, but they still matter. And actually it surprised me Adele how much they do matter if I take a piece of research that I read on Harvard Business Review recently as some form of evidence. So let me read to you what it says. 400 managers.
00:12:46
Speaker
hiring managers, that is, were surveyed on LinkedIn, and 61% still considered resume gaps to be a negative sign. And there was no statistical difference whether the hiring manager was a man or a woman. And I've got to say, I don't know, I still think that's pretty high. I mean, I suspect if you'd run the survey 20 years ago, it probably would have been 75%. But frankly, I'm still a little bit disappointed that it's that high. What do you think? Yeah, I think it does depend on the reasons, obviously, the like the length of time, certainly, that we're talking about, but that's often impacted by the reason that the person might have had a gap or a break. And there's obviously lots of different reasons why people do have gaps and
00:13:38
Speaker
um as I said, and that it impacts the length of time. So something like caring responsibilities where you are caring for a child or a relative um might have longer periods of time. You might have been off work or out of work for 12 months, and that wouldn't seem like a long gap if you had taken leave to to have a baby, let's say. But if you were conversely perhaps looking for work in that whole time, actively job searching and you're still looking a year later,
00:14:06
Speaker
then obviously then you start to say it's concerning. how Why is it taking 12 months to you know have a job and find a job and um secure it? And that seems like a long gap. So I think it does depend on the reasons, there's lots of other ones, right? Yeah, I think um study clearly is the reason that people would take um a break full-time study that is although they someone could be studying part-time and maybe caring part-time could be injury or illness could be extended overseas travel um potentially someone's been in jail or maybe they've had visa issues which means they haven't been able to work or just simply a career break where someone just
00:14:53
Speaker
resigns from a job or finishes from a job, maybe they've got a redundancy and they think, well, you know what, I'm just going to take five, six, seven months out. So I think all those reasons need exploring. I don't think you can just generalise about people that have got a gap in their employment history. I think also with COVID and and obviously and know the impacts to people's ah security and and stability in job history over that time means that we have to see that number, that percentage drop because people have to just be a little more flexible and tolerant. Employers need to be a little bit more flexible and tolerant that there were streams of people that couldn't work and wanted to to in that time. So sometimes it wasn't even their fault if you've got periods of time and obviously people would look at those dates, but sometimes it's not matching up to exactly when we were in lockdowns. It's sometimes after that it was
00:15:52
Speaker
that they lost their job or they managed to hold on to their job through JobKeeper, you know, support as we know, and then that all finished up with the government and then people lost their job. So it was sometimes a year or two after COVID that we started to see gaps in resumes or people losing their jobs.
00:16:07
Speaker
And I think probably actually the other one that's just come to mind is that people un-retire, like they've retired and then a year or two or three later, either there's a change in their financial circumstances or they just decide that they're bored without work and they like to go back to work. So that's so that's another reason. and Yeah. and And there was that active program of encouraging people out of retirement as we know post COVID because we it was short.
00:16:35
Speaker
of staff. So yeah it was about yeah actively trying to kind of track them back to the workforce as well.
Addressing Employment Gaps with Employers
00:16:41
Speaker
So yeah, there will be those gaps. And this is, I think, very prevalent now because I noticed from the latest labour force data, we now have hit a record level of labour market participation. It's some gone above 67%.
00:16:57
Speaker
And that by definition means that we have people re-entering the job market. So typically that's that's what that means. So this, I don't know whether you call it a phenomenon, but certainly the greater prevalence of people returning to the workforce who have significant gaps in their employment history is only going to increase. And with unemployment still only at 4.2%, this is something recruiters can't afford to be blase about. They can't afford just to generalize about candidates with employment gaps and go, huh you know, it's too hard. It's too hard to try and talk clients into seeing them and I'll just ignore them.
00:17:40
Speaker
oh So this article that you're referencing also has some of the reasons that employers were concerned about those gaps. What does it say state about those? Yeah, the the the top reason given was reliability. 29% of hiring managers express that as their major concern, followed by motivation at 27%. Retention risk, 25%.
00:18:09
Speaker
And then skill atrophy at 19%. So I've got to say, I don't know, reliability? ah Does that mean that the hiring manager's concerned that they've taken this big gap for whatever reason and they're not ready to work again? Or is that really motivation? Like they're not.
00:18:30
Speaker
may be fully motivated to work five days a week and they might just drop out just as easily as they've come back into the workforce. I don't know, what do you make of those reasons Adele? Well, I think it's important to use them in your referrals to candidates. you know so So one thing is to find out obviously as a recruiter what the gap was about. It's important that you build trust with the candidate so that they share the real information with you about exactly what happened or what led to the gap occurring or why it was so long and how they've tried to reduce it. So you understand the true story. But then when you're referring your candidate to your client, you've got to address those issues. um Reliability. Yeah, I think you're right. I think that is about if the person has you know chucked the towel in before, let's say, are they likely to do it again? Or you know if they've taken off and you know lived in Turkey for six months, you know what's the likelihood of that happening again? The reliability element of are they going to stay in employment
00:19:28
Speaker
and stay longer term is, I think, you know, that that's a valid one for any employee. And you've got to address that as a recruiter. And you're right, it speaks to motivation as well. So what is the person's reason for working? You know, I think that's a really interesting question. We don't ask enough anymore as recruiters. You know, we ask about reasons for leaving and we ask about ideal jobs and where they want to go. But why do people really work? You know, what's driving that person internally to want to do that job or come back to the job or come back to the workforce in this case? so um I think addressing particularly those two with your client when you're referring the candidate is really critical to be able to get them past the gap, get their mindset over the gap and and consider the candidate. and This is particularly so.
00:20:12
Speaker
when you're talking to internal recruitment or HR. If you're talking to the hiring manager, it's probably a little bit easier, but if you're recruiting via an intermediary, then they've got to communicate whatever you've said to the hiring manager and no doubt it's going to get lost in translation along the way or watered down. So mean it's even more important if you're dealing with an intermediary that you not only can explain it verbally, but you can explain it well in writing and that that can be used by internal recruitment or HR to go into bat for the candidate with the hiring manager because otherwise the hiring manager will be like, well, this person's got this gap. I'm really not interested. Don't we have better candidates? Like it that's going to be the standard response. So I think that's something very important to consider.
00:21:05
Speaker
in terms of whether your client contact is internal recruitment or HR or is it the hiring manager directly? Yeah, it's absolutely using your influencing skills, both verbally and written for sure. Well, in the long term, this is only going to become more important because with the um aging of the population in Australia and a smaller proportion of younger people,
00:21:33
Speaker
the a number of people who were in the workforce and will be returning or thinking of returning is only going to get larger. So this is something agency recruiters cannot ignore or in fact recruiters generally cannot ignore.
00:21:48
Speaker
To stay up to date with every episode of Recruitment News Australia, subscribe via our website recruitmentnewsaustralia.com.au, follow our LinkedIn page, Recruitment News Australia, and subscribe via your favourite podcast app. For more details about my services, simply go to rossclenet.com. And for more information about what's happening on my desk, you can visit careerlassoo.com.
00:22:18
Speaker
or the captainstable dot.com.au website.