australia hiring-market-update

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Hiring Market Update, Sydney January 2011

INTRODUCTION

Australia came out of the global financial crisis at such an impressive rate that halfway through 2010, the

IMF predicted that its economy would continue to grow throughout the year and into 2011 faster than any

other advanced nation’s economy. In the end, a slight slowdown resulted in a 2.2% final growth figure for

last year, rather than the +3% predicted 1.

Due, in no small part, to higher interest rates in Q3 and Q4, this slowdown did not halt what was an

impressive year in a number of areas. The Australian dollar finished the year as the second strongest

currency in the world for 2010 2; in US dollar terms, the Australian share market outperformed the global

index; and the four major Australian banks posted a collective 2010 profit of $21 billion 3. Economists are

predicting a healthy 3.5% GDP growth for 2011, so how will this positive outlook influence the growth and

hiring plans of Australia’s leading employers?

To find out what the next 12 months will bring for the hiring market in Sydney, global professional recruiter

Morgan McKinley recently surveyed over 700 senior level operational and HR managers working across

financial services and commerce & industry in Asia Pacific. As part of our ongoing commitment to keep our

clients and candidates up to date with the latest trends in the recruitment sector, we asked them about their

hiring plans for 2011 and the challenges they expect to face in the Sydney jobs market over the coming year.

In this Hiring Market Update, you will find a summary of the survey results. To make it as relevant as

possible to you, the results have been separated into two sections: financial services and commerce &

industry. We trust that you will find this information useful and we welcome your feedback.

Vanessa Harding-Farrenberg & Louise Langridge | Joint Managing Directors | Morgan McKinley Sydney

T: + 61 (0) 2 8986 3104 or + 61 (0) 2 8986 3103

E: [email protected] or [email protected]

1 International Monetary Fund: http://bit.ly/9s4JEk 2 The Daily Telegraph: http://bit.ly/eCVI36 3 Sydney Morning Herald: http://bit.ly/hoqYJw

mailto:[email protected]

mailto:[email protected]

http://bit.ly/9s4JEk

http://bit.ly/eCVI36

http://bit.ly/hoqYJw



KEY FINDINGS

Financial Services

• The majority (83%) of employers in Australia’s financial services sector have confidence in the country’s

economic outlook for 2011, with 89% expecting growth in business revenue.

• This confidence is underlined by 88% of financial services employers considering hiring, with 37% stating

they will definitely hire over the next 6-12 months.

• Recruitment is expected to be predominantly replacement hiring according to 66% of respondents.

• Nearly three quarters, (72%) of managers surveyed expect an increase in salaries.

• In addition, 94% of all those asked expect bonuses to be paid and 53% expect them to be at a similar

level to last year.

• Talent retention was anticipated to be the main personnel challenge for financial services managers, with

46% citing it as a concern ahead of talent attraction.

Commerce & Industry

• Across commercial businesses compared to financial services, fewer hiring managers (66%) had

complete confidence in Australia’s economic outlook while 80% were still expecting growth in revenue

this year.

• Despite less confidence, 92% of employers in commercial organisations have plans to hire, with (63%)

stating they will definitely hire in the coming 12 months.

• More than two thirds (69%) of commercial employers expect to see salaries increase over the course of

2011.

• In addition, 83% of those surveyed say bonuses will be paid and a healthy 56% of respondents predict

they will be more than 5% higher than the previous bonus round.

• Talent retention was also expected to be the main personnel challenge in 2011 according to 46% of

managers across commercial businesses.



How would you rate your confidence in Australia's economic outlook over the next 6-12 months? (Financial Services)

3.9%

78.7%

15.5%1.9%0.0%

Very confident Confident Not sure Not very confident I think it w ill w orsen

Do you expect basic salary offers within your business to increase, decrease or stay the same over the next 12 months and by what %?

0.0%

0.0%

0.0%

1.9%

6.8%

63.1%

28.2%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0% 10% 20% 30% 40% 50% 60% 70%

More than 26% increase

21 to 25% increase

16 to 20% increase

11 to 15% increase

6 to 10% increase

1 to 5% increase

0%

1 to 5% decrease

6 to 10% decrease

11 to 15% decrease

16 to 20% decrease

21 to 25% decrease

More than 26% decrease

FINANCIAL SERVICES Market Trends In a recent survey of senior level operational and HR managers working across a range of financial services

institutions in Sydney, Morgan McKinley found that 83% have confidence in the country’s economic outlook

for 2011. Of those surveyed, 89% are expecting growth in business revenue, the majority of whom (67%)

said it will be organic rather than through acquisition.

The Reserve Bank of Australia has said that the

continued rise of China as an economic superpower

will further strengthen the Australian economy in 2011

due to the well-established links between the nations 4.

This is supported by our survey which found that 76%

of hiring managers would be targeting Asia Pacific

markets as the main area of international growth this

year.

This survey of financial services employers also highlighted that M&A activity is likely to increase driven by

cross border deals. The risk and compliance functions are likely be busy in the face of ever-changing

regulation; and back office roles will gain more importance with ‘simplification’ strategies being implemented.

In terms of salary trends in

financial services, 72% of

employers expect some

increase in salaries, though

only to stay in line with inflation.

Nearly all those surveyed (94%)

do expect bonuses to be paid,

although more than half of all

respondents (53%) predict that

they will be at a similar level to

last year. Half of managers

(51%) state they are not making any significant changes to the structure of compensation packages.4

The Australian: http://bit.ly/dfzXtY

http://bit.ly/dfzXtY

http://bit.ly/dfzXtY



Will you be hiring over the next 6-12 months? (Financial Services)

50%

13%

37%

Yes No Maybe

What do you think are the main personnel challenges you will face over the next 12 months? (Financial Services)

25.2%

45.6%

21.4%

31.1%

4.9%

29.1%

7.8% 4.9%

0%

10%

20%

30%

40%

50%

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Recruitment Prospects Employers’ confidence in the economic outlook is supported by the positive reaction in our survey that 88%

of financial services employers are planning to hire over the next 12 months. Half of respondents (51%) said

they would definitely be recruiting, while 37% said hiring was a possibility.

Most managers, (84%) expect this hiring to be on

a permanent basis. If economic growth continues

and the financial services sector blossoms, a

number of opportunities will open up externally for

talented professionals. Coupled with the

traditional movement in the jobs market caused

by bonus payouts in areas such as investment

banking and capital markets, replacement hiring will be crucial for employers and the survey shows that 66%

of managers surveyed believe this would indeed drive their recruitment plans in 2011.

Following the global financial crisis, a number of large organisations are currently looking to create or

expand their platform in Australia, possibly also moving into new sectors. Such business development plans

explain why 44% of managers surveyed were looking to increase headcount, with the majority of new hires

expected to be at an associate or junior manager level.

Personnel Challenges For employers, one downside of an upturn in the market is facing the possibility of key talent moving

externally to further their careers elsewhere as a

wealth of new opportunities open up in their

specialist fields.

Managers’ concerns about this were illustrated in

the survey: talent retention was considered the

main personnel challenge to be faced this year by

close to half (46%) of all financial services

employers.



To retain the best people, the most popular solution was seen by 43% to be increased training and

development opportunities, while 28% planned to increase salaries 26% intend to focus on driving and

employee engagement as an effective talent retention tool.

Other key personnel challenges identified for the year ahead in the financial services sector were the

management of benefits and rewards, a concern to 31% of respondents; change management, flagged by

29% and talent attraction which was seen as an issue by 25%.

What strategies are you planning to put in place to combat talent attraction issues? (Financial Services)

21.9%

3.1%

21.9%

37.5%

31.3%

21.9%

3.1%6.3%

34.4%37.5%

6.3%

0.0%

18.8%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%

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What strategies are you planning to put in place to combat talent retention issues? (Financial Services)

6.4%

25.5%27.7%

19.1%

42.6%

14.9%

8.5%

14.9%17.0%

4.3%

23.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

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How would you rate your confidence in Australia's economic outlook over the next 6-12 months? (Commerce & Industry)

14%

51%

26%

9% 0%

Very confident Confident Not sure Not very confident I think it w ill w orsen

COMMERCE & INDUSTRY

Market Trends The senior managers surveyed across commerce and industry businesses had slightly less confidence in

the economic outlook for Australia than their counterparts in the financial sector with only 65% giving a

favourable response. Despite this, 80% were still expecting to see growth in their business revenue in the

coming year with 61% of these anticipating organic growth rather than acquisition.

As businesses focus on growth again,

investment should see a demand for

commercially focused and project

implementation roles. Process simplification will

also be high on the agenda with a likely increase

in requirement for the skills of Six Sigma and

business process re-engineering experts as well

as change management professionals.

Salaries are expected to rise during 2011, with 69% of employers in commerce and industry businesses

anticipating increases, although the majority of those asked (67%) see any rise being minimal and purely to

reflect inflation rates. Bonuses are expected to be paid as usual by 83% with more than half (56%) predicting

that they will be over 5% higher than the previous round of bonus payments. There appears to be little cause

for concern over remuneration among those surveyed, with 63% having no plans to restructure the

compensation packages they offer. Do you expect basic salary offers within your business to increase, decrease or stay the

same over the next 12 months and by what %?

0.0%

0.0%

2.9%

2.9%

14.3%

48.6%

31.4%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0% 10% 20% 30% 40% 50% 60%

More than 26% increase

21 to 25% increase

16 to 20% increase

11 to 15% increase

6 to 10% increase

1 to 5% increase

0%

1 to 5% decrease

6 to 10% decrease

11 to 15% decrease

16 to 20% decrease

21 to 25% decrease

More than 26% decrease



What do you think are the main personnel challenges you will face over the next 12 months? (Commerce & Industry)

51.4% 54.3%

28.6%14.3%

8.6% 11.4% 8.6% 11.4%

0%10%20%30%40%50%60%

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Will you be hiring over the next 6-12 months? (Commerce & Industry)

62%9%

29%

Yes No Maybe

Recruitment prospects Any lack of confidence in the Australian economy is not set to hinder recruitment plans for commerce &

industry organisations. Unemployment rates in Australia have been steadily dropping over the past 12

months and are predicted to fall as far as 4.5% in 2011, with job advertising steadily climbing in the opposite

direction. Growth plans are very much in place among those surveyed, with 92% of the employers having

plans to hire. Of these 63% said they would definitely be recruiting, while 29% said they may be hiring over

the next year. The majority of hiring activity will be

for permanent roles, according to 78% of managers

surveyed, while almost half (47%) plan to add

headcount, indicating short term plans for expansion.

As in the financial services sector, increased

business activity tends to trigger some movement in

the jobs market, as talented professionals in

specialist roles seek new opportunities elsewhere.

Anticipating this, 63% of the senior managers interviewed were expecting to have to hire replacements.

They were also predicting that much of the talent on the move would be experienced professionals, with the

majority of their expected hiring being at the intermediate to senior level.

Personnel Challenges Replacement hiring may be an immediate

solution, but looking further ahead, 54.3%

of employers in commercial businesses

acknowledged that talent retention would

be the main personnel challenge they

would face in 2011. In addition, 51.4%

also saw talent attraction as a major issue

to be addressed this year.

To tackle the talent retention challenge, 44% of managers plan to look into their training and development

offerings to keep key staff motivated enough to continue their careers within the same company. To attract

new people, 44% said they would be looking at promoting an attractive work-life balance, with solid career

opportunities and development also on the agenda.


What strategies are you planning to put in place to combat talent attraction

issues? (Commerce & Industry)

7.4% 7.4%

29.6%

11.1% 11.1%

44.4%

7.4%11.1%

37.0%

25.9%

11.1%

0.0%

11.1%

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10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%

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What strategies are you planning to put in place to combat talent

retention issues? (Commerce & Industry)

4.5% 4.5%

18.2%

31.8%

50.0%

18.2%

9.1%4.5%

9.1% 9.1%

22.7%

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At Morgan McKinley, we hope this research has provided some interesting insight into future trends within

the professional jobs market in Sydney. To discuss any of the points raised or your recruitment requirements

please contact Morgan McKinley on +61 (0)2 8986 3100.

5 The Australian: http://bit.ly/fJ6Ppt


http://bit.ly/fJ6Ppt

http://bit.ly/fJ6Ppt

morganmckinley.com

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