State of the Recruitment Market November 2023

We recently surveyed 61 CEOs, GMs and functional leaders in accounting, HR and supply chain to gather their views on the state of the market. This is what they told us.

‍What is your perception of candidate supply at this time?

‍If you are struggling to fill your vacancies, you are not alone.

• 59% of respondents described candidate supply in negative terms.  Clients are experiencing high volumes of advertising response, but many candidates had none or very few of the skills necessary to do the job.  Commitment to the recruitment process was also an issue, with many applicants not returning phone calls or failing to show up to interviews.  Clients employing blue collar workers were the worst affected, describing a shocking lack of supply and commitment.
• 26% of respondents were neutral in their perception of the market.  Either they had not recruited recently, or they felt supply was sufficient to fill their vacancies.
• 15% described candidate supply in positive terms.  This group had recruited recently and had no problems sourcing quality candidates.

‍What is the biggest business challenge you are facing at the moment?

‍There were four common themes across 90% of all respondents.  They were:

• 38% told us cultural issues were their biggest challenge. In particular, staff retention, staff engagement, under-resourcing, headcount freezes and change fatigue.
• 21% felt the talent shortage was their biggest business challenge.
• 16% felt the cost of doing business, the cost of borrowing and supply chain issues were their top concerns.
• 15% cited declines in revenue, uncertainty in the economy and lack of consumer confidence as their key business challenge.

‍What is the biggest staffing issue you are facing at this time?

‍There were a variety of responses to this question, however there were four common themes across 75% of all respondents.  They were:

• the talent shortage is the biggest staffing issue facing 45% of all respondents.
• retention is the next biggest issue, affecting 20% of all respondents.
• 6% of respondents mentioned under-resourcing and exhausted staff under constant pressure as their biggest concern.
• 5% of respondents were concerned over the mental health of staff, especially in relation to the cost of living.

‍What projects or changes are happening in your business right now or are planned in the future?

‍Clients have a range of projects planned or in process. The four common changes happening in our survey sample were:

• software system implementations and upgrades. In fact, more than a third of those sampled are deep in software changes.
• the next biggest group are preparing for growth, acquisitions, diversification, rebranding, R&D and new product development.
• hot on the heels of growth was restructuring, with 60% of restructures being positive for the business and not involving redundancies.
• streamlining, automating and digitising processes.

‍What are your hiring intentions in relation to permanent staff in the next six months?

‍The results were:

• 52% knew they would be hiring, a similar response to our survey in May this year.
• 32% said they won’t be hiring.  This is up from 18% who had a headcount freeze in May.
• 16% said they have no plans to hire, unless they receive resignations.

‍What are your hiring intentions in relation to contractors in the next six months?

• 60% said they would not be hiring.  In May, 72% told us they would not be hiring contractors.
• 40% said they would definitely be hiring contractors, or would hire contractors if needed.  We expect an increase in contractor activity is tied to employers looking for headcount flexibility or an interim solution to the talent shortage.

Candidate supply is a problem we battle every day.  We rely heavily on our candidate database and only 20% of our roles are filled through advertising response.

From September 2021 until Easter this year, we were frantically busy.  We are now experiencing a much more subdued market.  The employment market is cyclical, so adjusting to the market is nothing new for us.  That said, we would usually expect an improved supply of talent in a quieter market.  Not so in this market though.

Our monthly News Bulletin, published yesterday, covers a range of employment market indices.  Consumer confidence has fallen markedly after the RBA announcement on Melbourne Cup day.  Whilst job ads and the number of new jobs created are at record high levels, both indices are falling.

The DEEWR report offers some positive news.  The report consolidates five local and international indices to provide advance warnings of turning points in cyclical employment.   DEEWR won’t call a turning point until they have had six months of movement in either a positive or negative direction.  The indicator rose for the third consecutive month in November, after falling for 17 consecutive months.Make the most of what’s left of 2023.

We close our doors for two weeks over Christmas.  Our last trading day is Friday 22^nd of December.  Until then, we are willing and able to assist you with the recruitment of permanent or contract staff.
      

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