October 12, 2022
What employers need to know about the current jobs market
The jobs market in 2022 looks very different to anything most of us can remember. In July, unemployment dropped to a near record low of 3.4% (it went up to 3.5%) in August. But that really only tells a part of the story. The reality is much more nuanced – and, depending on your perspective, potentially even better – than the headline rate suggests. We explore what’s really happening and what it means for you as an employer.
1. A lot more people are working
While a near-record low unemployment rate hogs the headlines, two other equally important measures of our workforce are getting less attention. The first is the participation rate – or the number of people of working age who are in the workforce or looking for work. In August 2022, this increased to 66.6%. The participation rate is important because, during the pandemic, a lot of people dropped out of the workforce. Now, it seems they’ve returned with interest. What’s more, this higher participation rate meant that more people were working in August even if a slightly higher number of people were also looking for work.
2. The trend is back to permanent and full-time
The past decade or so has been characterised by the casualisation or even contracting out of work. Technological disruption, including the rise of apps such as Uber and MenuLog, has created a whole ‘gig economy’, where employment is temporary and the traditional 40-hour work week is more flexible. As part of this trend, there has also been a rise in part-time work. Well, it seems that trend has been in decline since the start of the pandemic.
The latest data shows that the main contributor to job growth was full-time employment, which increased over August by 58,800 to 9,468,500 people. Meanwhile, part-time work fell by 25,300 to 4,123,600 people. Its share of employment was 30.3%, or 1.5% lower than in March 2020.
The number of people reporting that they were underworked fell too – just 5.9% of people said they wanted more hours. That’s down from 8.6% immediately pre-pandemic and 6.6% at the start of the year.
In other words, people who want to work more hours are increasingly finding they can.
3. The war for talent is real
In case you haven’t noticed, these trends are creating a genuine war for talent. We’ve all seen the signs in cafes and restaurants desperately seeking staff, but it stretches well beyond that.
The toughest markets for employers are actually in sectors including healthcare, IT, manufacturing and retail. These sectors often rely heavily on immigration to fill vacancies, and, well, that just hasn’t been happening.
Even with the recently announced increase in the immigration limit, we can expect these sectors to struggle for talent in the coming years.
4. Wages have to realign
When there are job shortages, wage rises become inevitable. So brace yourself if you’re an employer (or celebrate if you’re an employee) because that’s what we’re inevitably going to see over the next 12 months.
In fact, we may even see a reorganisation of some sectors, which find they have to pay more to attract people. For instance, employees in aged care, child care, health care and hospitality may find that their scarcity leads to wage rises that exceed those in some other industries.
5. Money isn’t the only thing that matters
Despite this, the best employers know it doesn’t always come down to money. There are other ways employers can recruit and retain their workforce.
That begins by building a great culture where people actually want to work. But it also includes being flexible, listening to what employees want, and accommodating them.
This extends to the way you hire people too. By becoming an employer of choice, you take away at least some of the stress.
What can you do about the current jobs market?
Today’s employment market is like nothing we’ve ever experienced, but by looking behind the data and making the right decisions in your workplace, you can still get ahead.
Want to know more?
If you’d like to know more about today’s jobs market, get in touch.