…S#*t it’s here…no, not 2024…another ‘industry expert prediction’.
Well, let’s be honest, there are 2 reasons you’ll read this.
1. You’re hanging in there to wrap up the year.
2. You know our predictions aren’t based on crystal ball cr*p. (And if they are , we own it).
I’ll start with the prediction:
Winston Churchill once said if you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions. Basically, there’s less science behind economics than we like to admit. There’s data and statistics, sure…but less science.
Actually, on that, it's worth noting that Economists have forecasted nine out of the last five recessions. (Read that again and then feel a bit better than it’s most likely going to be a lot better than the media says).
One thing is sure about our predictions; we won’t even bother tackling the WFH debate.
So, with that precursor…here we go…we’ll tackle our predictions for 2024:
In a nutshell, the balance of a (modestly) growing economy, cautious corporate spending, but a high demand for top talent creates both challenges and opportunities for job seekers and organisations looking to hire.
CEOs are saying that the Australian economy may not grow as fast, but should grow enough to keep stalling. The talent market however - will remain active.
There has been significant wage inflation (or correction depending on how you see it) but this will now result in employers looking for a return as they look to increase productivity.
The RBA told us last month that Australia's GDP would increase 1.5% for the year…less than 1.5% suggests that some CEOs will oversee companies that go backwards.
As with most things, there is no one size fits all.
2023 was the year of the "soft landing" economically speaking.
For 2024, the fiscal easing form July will help promote more economic growth but until then there will be some fine tuning. There are still elevated job vacancies (but this has fallen from peaks) and there is a gap between supply and demand. So we expect no sharp deterioration and no wide spread job losses...but efficiencies will be key for organsiations. (ANZ).
Unemployment may rise slightly...but companies will still be hiring.
"Gen Z currently will make up nearly 30% of the workforce by 2025. 65% of Gen Z reported planning to leave jobs within 6 months. Gen Z currently switch jobs 134% more than in 2019. Gen Zers consider "1 year" a reasonable tenure at a role." - so there will be turnover.
In April 2021, older Australians (aged 65 and over) had a workforce participation rate of 15%...they'll be out soon if not already and Australia's workforce is steaming towards a retirement cliff.
For Hiring Managers
Strategic Talent Acquisition:
With companies focusing on quality over quantity, hiring managers need to refine their talent acquisition strategies. Emphasising specialised skills and cultural fit/add becomes imperative in selecting candidates who can drive productivity and contribute to a positive work environment. I can see companies with large TA teams shrinking and growing companies with no TA trying to cut agency spend by taking an in-house person for generalist roles. [Reference: Harvard Business Review - Talent Acquisition Strategies](https://hbr.org/2020/11/building-a-talent-pipeline)
Investment in Specialist Recruitment:
The trend is moving away from generalist recruitment agencies towards more specialised firms. Hiring managers should partner with recruitment consultants who have deep networks and understand the nuances of their industry. Old Fashioned Generalist recruiters and ‘advertised search’ (aka admin) is from whom the bell tolls. [Reference: Forbes - The Rise of Specialist Recruitment](https://www.forbes.com/2020/specialist-recruitment)
Performance and Cultural Fit/Add:
There will be a greater emphasis on hiring individuals who are not only skilled but also align with the company's values and culture. This approach helps in building a cohesive and effective workforce. Your overpaid, disgruntled team members that don’t put the team first will be shown the door. [Reference: Society for Human Resource Management - Cultural Fit in the Workplace](https://www.shrm.org/resources/cultural-fit)
Local Talent Focus and Salary Implications:
The Australian Bureau of Statistics indicates that salary increases are expected to ease, partially due to the influx of skilled immigrants. However, with projections of reduced immigration rates in the coming years, the demand for local talent is poised to increase, likely driving up salaries again (once we move to the end of 2024). [Reference: Australian Bureau of Statistics - Labour Market and Salary Trends](https://www.abs.gov.au/statistics/labour-employment-and-unemployment)
For Job Seekers
Understanding Market Dynamics:
Job seekers should be aware of the economic conditions and how they influence hiring trends. Understanding that companies are being more selective can help in tailoring applications and interviews to showcase how they can contribute effectively to potential employers. Again nobody wants a generalist. It’s all about value add. We’re also approaching a retirement cliff so there will be movement in executive and board roles [Reference: McKinsey & Company - Understanding Labor Market Trends](https://www.mckinsey.com/industries/labor-market-trends)
Skill Enhancement and Specialisation:
In a market where quality trumps quantity, job seekers should focus on enhancing their skills and possibly specialising in niche areas. L&D is key. This specialisation can make them more attractive to employers looking for specific skill sets. [Reference: World Economic Forum - The Future of Jobs Report](https://www.weforum.org/reports/future-of-jobs-report-2020)
Networking and Visibility:
Traditional job applications are less likely to yield results. We’ve seen this for months. Good people are too busy to apply to jobs. Job seekers should focus on building networks, attending industry events, and increasing their visibility in their professional community. [Reference: LinkedIn - The Importance of Networking](https://www.linkedin.com/pulse/importance-networking)
Cultural Fit and Adaptability:
Demonstrating adaptability and a fit with potential employers' corporate culture can be as important as technical skills. Job seekers should research and understand the values and work environment of companies they are interested in. If it’s gonna make you unhappy don’t go there or stay there. Figure out what you want. [Reference: Forbes - The Importance of Cultural Fit](https://www.forbes.com/cultural-fit)
Preparing for Rigorous Interviews:
With a focus on hiring the right talent, job seekers can expect more rigorous and comprehensive interview processes. Clients will still probably not improve their interview experience - which means they’ll ask awful behavioural interview questions and take too long in the recruitment process. Candidates should be prepared to discuss not only their skills and experiences but also their potential cultural fit and contributions to the company's goals. Preparation is key to successful interviewing. [Reference: Glassdoor - Preparing for Job Interviews](https://www.glassdoor.com/blog/guide/job-interview-preparation/)
Burnout and Unhappiness:
Companies will continue to address increasing employee burnout and unhappiness, focusing on mental health initiatives, flexibility, and work-life balance...but whether it'll stop/imporve is another matter. (https://www.deskbird.com/blog/workplace-trends-2024).
Gen Z's Influence in the Workplace:
Gen Z will represent a significant portion of the workforce, bringing changes in workplace dynamics with their digital comfort and expectations for work-life balance and environmental responsibility.
Conclusion for 2024
We’ve heard how in 2023, the key word was ‘Resilient.’ The year 2024 represents a period of where words such as ‘Adaptation’ are key for both hiring managers and job seekers in Australia. “Productivity” and “Return on Investment” will feature heavily too when employers look at their teams.
Companies will actively look to lose poor performers (output and culture).
Hiring managers must acknowledge that the best talent is scarce and highly valued; they must focus on specialised recruitment to get the best performing team, and fine-tuning that team will be a priority.
Job seekers, on the other hand, must position themselves as high-quality candidates, emphasising specialised skills, adaptability, and alignment with potential employers’ cultures. Nobody wants to hire a jack of none…or someone that will upset the tone of a team.
Finally, recruiters need to understand that they need to up their game. They must specialise. They must refine their craft, they must study, they must be resilient, they must focus on quality over quantity, they must understand that they will be questioned on value more than ever.
Hiring will slow - and change.
For COMPANIES, 2024 is not about bums on seats…it’s about quality hires, getting rid of dead wood (poor performers and poor cultural fits) and building highly engaged and performing teams.
For JOB SEEKERS, it’s a period where we will see movement at executive and board level, fall out in middle management and a 15% goal net reduction in staff (which will probably end up c.7% on salary headcount as companies factor in paying more for better performers).
This is a result of 2 factors:
1) the retirement cliff where, in our current workforce, 5 per cent are aged 55 to 64, and five per cent are already of retirement age (65+).
2) companies overhired/hired badly in the aftermath of the pandemic.
Further to this many surveys in Australia in 2023 have reported up to 1 in 5 people expecting to be layed off in the near future with Australia so far escaping the same level of global layoffs. (15 per cent are aged 55 to 64, and five per cent are already of retirement age (65+). A survey by the Australian HR Institute shows 31 per cent of its members are expecting to retrench staff this quarter. Three months ago, just 17 per cent were expecting to axe workers. (https://www.smh.com.au/politics/federal/jobs-and-doctor-visits-go-as-rba-war-on-inflation-cuts-deep-20231121-p5eliq.html) (https://ia.acs.org.au/article/2023/a-third-of-aussie-businesses-to-lay-off-staff-this-year.html)
All parties play a crucial role in driving productivity and growth in a cautiously optimistic economic environment.
Merry Christmas and Happy New Year.