State of the Market for Recruiters and Employers

Our Managing Director, Tim Walshe, shares his expert insights into the current state of the market for recruiters and employers.

There is no secret that we have been working through an incredibly challenging candidate market for some time. For us, that significant shift occurred around 18 months ago. We are regional recruitment specialists, so are used to operating in, and finding solutions in, inherently candidate short markets. When you’re working in a town with a population under half a million, there’s always a shortage of something, so that’s an environment we’ve gotten fairly used to in the 20 plus years we’ve been in business, but about 18 months ago, even we certainly felt a significant reduction in the candidate market across all sectors and industries in which we work.

The drivers of that can only be presumed. That is that there’s no significant clarity or guarantee around what’s been the main contributors, but what we have certainly seen over that challenging candidate period is that that business has still been good.

Businesses have been very profitable and growing and experiencing an overall fairly prosperous time. We’ve also had a significant reduction in work visas being granted. Pre-Covid in Australia anywhere from 20,000 to 60,000 work visas were granted every single month, and in the 12 months post covid, there was under one thousand.

Initially this limited candidate market meant here was opportunities for people to change sectors, fantastic opportunities for kids coming out of school to get great jobs, we’ve seen wage growth, which has been fantastic, but we’ve also seen businesses really struggle to meet the demands of their clients.

We had recent conversations with analysts at National Australia Bank and Australian Industry Group who keep a really close eye on unemployment generally, as well as productivity and business performance, and the advice that we’ve received is that the current unemployment rate in Australia is at a 50 year low. But the advice is that we’re at the bottom of it, so as challenging as the last 18 months have been, we should start to come out the other end soon. There is a range of things going on at government level at the moment. Levers are being pulled to try and slow inflation and impact the economy which will surely see an improvement in that unemployment rate.

Those initiatives should have a significant impact on business growth which will likely see a slight increase in unemployment over the next six months. So as much as we don’t want to see people out of work from a candidate market perspective, we would expect that by early to mid-next year we’ll be trending in a positive direction as far as candidates available.

So the advice we received from NAB and supported by AIG was that we could see as much as a 0.5 to 1% increase in unemployment by the mid to early stages of next year, which doesn’t sound like a lot, but has a significant impact. We’re also now a year into the return of work visas and a lot more people coming into Australia and that will only increase, which will have a positive impact on the Australian workforce. One of the immediate challenges we’re finding, however, is the backlog. So whilst the borders have been open now for 12 months, they’re only really starting to trickle through now.