Buoyant HR job market ahead

by 23 Jan 2007

2007 is shaping up to be a good year for HR jobs. Craig Donaldson speaks with a number of experts about the latest trends and how HR professionals can make the most of career opportunities over the coming year

A number of converging issues impacting people management, productivity and the bottom line are bearing down on businesses. As the skills shortage begins to bite across an increasing number of sectors, companies are increasingly turning to their HR departments to assist in mitigating the effect on their businesses. Other issues such as the ageing of the workforce, offshoring, industry and company consolidation and increased demand for sources of competitive advantage are also placing increased demand upon HR departments. As such, the coming year will provide HR professionals with a wide variety of challenges and opportunities on the career front.

David Owens, associate director of HR Partners, says 2007 will be a year of great opportunity for HR professionals. “Many CEOs are showing a great appreciation of the value modern HR can bring to a business, and in my view this appreciation has never been greater.”

The job market for HR professionals is extremely strong, according to Owens, giving the HR professional tremendous career choices. With a robust HR job market in 2006, he predicts the same conditions through 2007, with upward pressure on salaries. “The rates of increase being reported further underpin the view that this is more than just a purple patch for HR in Australia,” he says.

Craig Mason, director of the Next Step, notes that while Sydney and Melbourne remained strong as markets in 2006 and leading into 2007, the most movements were in Adelaide, Perth, Brisbane and regional areas. “Whereas in the past these markets tended to lag, the demand is extremely strong now for HR talent right across the board,” he says.

Mason also notes that the HR specialist market last year was strong, particularly in the compensation and learning and development (L&D) spaces in the later half. “Having said that, 2006 can be justifiably called the ‘year of the HR generalist’. The range and depth of the roles in the generalist market just went from strength to strength, and this should continue in 2007.”

Another key issue for the HR profession is the lack of quality entry level roles provided by the large corporates over the past five-plus years, Mason adds. “This is now starting to really bite with strong demand in the early intermediate levels of HR being hopelessly unsatisfied with experienced and talented HR professionals.”

Paul Breslin, group manager of HR Matters, also says the graduate to intermediate (up to five years’experience) market continues to remain brutally competitive with many candidates being made multiple job offers. “Consequently salary inflation is still occurring in this market, although it is hard to see this continuing further this year as salaries are at unprecedented levels already,” he says.

The contracting market also remains strong with a consistent flow of roles across all areas, according to Breslin. This in turn is making more senior candidates confident to consider the interim market as an alternative to permanent work. Furthermore, global commerce continues to drive demand for HR people with offshore experience. “This trend is increasing particularly in the specialist areas of reward, organisational development and HR shared services. As more markets open up across Asia and become more established in terms of people management, there is more and more demand for Asia-Pacific experience and depth of knowledge,” Breslin says.

Common career pitfalls

Despite an abundance of opportunities for HR professionals on the job front, many still fail to plan their careers adequately. “It’s the plumber with the rusty pipes at home syndrome,” Breslin says. “HR spends so much of its time focused on other people’s issues that it often neglects to take care of its own. This seems to happen most often after about five to seven years, at a stage when many people feel like they then know their trade and begin to ask what they really want to do with their careers.”

Mason says some of the more common career pitfalls for HR professionals include not staying in touch with the broader market and networking; staying in a role that doesn’t continue to challenge them; staying focused on the HR theory and not the commercial realities of the competitive market that the business operates within (reading the Financial Review is an easy way to address this); not considering a stint in a line role to sharpen the business focus; and not aligning their careers with top-level HR directors that will develop their approach.

Owens also notes that another pitfall to avoid is failure to measure your impact or contribution. “No matter how bad things are today, measure them and ensure you track the improvements. Ensure metrics become part of your HR life and measure what you can.”

Improving career prospects

There are a number of steps HR professionals can take to improve both their short- and long-term career prospects. In the short term, Breslin encourages HR professionals not to get bogged down with only doing their day-to-day job. “Take advantage of the booming economy which has created well resourced HR departments, by being proactive on a daily basis. Look at your HR systems and processes and see where they can be improved,” he says.

“Very few bosses will not want to hear about new ideas and how you will go about implementing them. Innovation and creativity in HR are the key skills that progressive HR directors are looking for. Achieving some tangible innovations will set you apart from the competition when you do come to move jobs either internally or externally.”

Both Breslin and Owens recommend HR professionals network with peers from varying sectors about how they do things. “What networking will provide you with is a look at, and often an appreciation of, best practice,” Owens says. “This can not only be stimulating for the up and coming HR professional but also accelerates the understanding of how things can be done better so any form of professional networking can benefit your career quite quickly.”

In gaining commercial acumen, Owens sees value in postgraduate qualifications as well as qualifications that underpin a drive to better understand the commercial set-up of business – not limited to but certainly including the MBA, he says.

From a personal perspective, Mason says HR professionals should introspect and ask whether their current HR toolkit is complete and if their current role is going to get them where they want to go. “If a HR practitioner sees that their vision is to hold senior HR roles of influence in the future then they need to make every post a winner now,” he says.

The first step is to undertake an objective HR career audit – a potentially powerful way of identifying both strengths and weaknesses, Mason adds. “Having a complete HR toolkit is essential for future career opportunities. Generally HR professionals work within their areas of comfort and enjoyment, but by identifying the toolkit gaps, practitioners can start to put in place steps to address the shortfalls.”

Unless someone wants to become a functional or a project specialist then operating as a generalist in a true business partner role is the best career strategy, Mason believes. “Business partner roles seem to be the breeding grounds for the senior players. Some of Australia’s largest ASX-listed companies have tinkered with their structures and taken people out of business partner roles and put them into ‘consulting’ structures. This may make all the sense in the world for the company in terms of efficiency, consistency and head count reduction, but it’s not a winner in terms of an individual’s HR career development.”

There are a number of benefits in developing a great toolkit of skills for a true business partner HR generalist role, he adds. By being closely aligned with the business unit and becoming part of the ongoing management team, Mason says HR professionals develop the influencing and relationship management techniques that are key for future success at senior levels.

In the long term, Breslin says gaining offshore experience is becoming more valuable than ever, both within Asia-Pacific and especially in the US and Europe. “Making this part of your career plan at some stage is no longer just for the adventurous, but an essential part of building a successful career,” he says.

HR specialists still in demand

Graham Hollebon, national director of Michael Page Human Resources, says the surge in recruitment activity in 2006 is expected to continue throughout 2007, with the HR function playing a critical part in the sourcing, development and retention of employees across all white-collar sectors.

"Within this tight labour market companies can get a real competitive advantage by having strong and effective recruitment processes, well-equipped learning and development strategies and an effective employee engagement program. These should be driven by the HR area, while being true 'business partners' to the operations," he says.

For 2007, Hollebon says the market will continue to be fluid, with demand for commercially astute, ambitious and innovative HR professionals being strong. At the senior HR level, industry skills, a proven track record in achievements and the ability to interact at a senior level will be even more critical if companies want to re-engineer their HR functions. "The HR function will still drive many of the decisions about staffing for the organisation and will continue to reinforce to the business that they are operating in a talent-short market and that to have the skills for tomorrow, the company will need to invest in the future," he says.

Wide range of opportunities available

Jacky Carter, director of Hays, says the HR market remains buoyant with particularly strong demand for professionals with EHS and OHS experience. "Opportunities span the full range of skill level from trainee to department head," she says.

The executive HR market also returned to active levels in the last quarter of 2006, particularly in the contracting and interim management sector. Most common executive vacancies are for change management, organisational development and shared services model implementation.

"Salaries remain competitive at all levels and a number of organisations are seeing the benefit of short-term reward and recognition programs as a valuable monetary and non-monetary benefit," Carter says.

"A growing trend is sign-on bonuses used to secure new employees, which is further indication of this current candidate-short market. Initially, this activity was seen sporadically in Western Australia in the mining, engineering and construction industry to compensate for missing a bonus from a current employer. However, the trend is spreading interstate and is being seen within banking, IT and legal sectors."

The number of candidates actively looking for a new role has diminished, according to Carter, however the remaining competitive market has seen an increase in job offer options for candidates resulting in some package negotiations.