Australian hiring optimism returns but skills shortages loom

An overwhelming majority of Australia and New Zealand's employers (84%) say they made too many redundancies during the downturn and many now lack the right teams to grow their organisations, according to research released by Hudson.

The research findings, part of the Hudson 20:20 Series report Positioning for Growth - Building a Dynamic Workforce in a New Economic Era, reveal 80% of employers have an active focus on growth, but their attempts to rebuild and improve the strength of their workforce are falling flat. Employers say that almost half (44%) of their current hires are 'not good'.

The results, taken from 605 employers and 1,690 employees throughout Australia/New Zealand, show both groups have positive outlooks - 85% and 82% respectively say they are feeling positive about the economic future. A third (29%) of employers go further saying their outlook is 'upbeat and opportunistic'.

"This is a very buoyant outlook, considering the mood recorded only one year ago," said Simon Moylan, executive general manager, Hudson Talent Management. "But despite this, the fact remains that many employers experienced minimal growth, in some cases decline, throughout the last 12 months."

Employers say the market is now more competitive, skills shortages are returning and increasing market liquidity is putting power back into the hands of employees. "Employers cannot afford to make hiring mistakes as they endeavour to rebuild their teams and position their organisations for growth," said Moylan.

Over half of the employers surveyed (53%) report that during the downturn 'some scheduled business development/plans were put on hold'; 51% report that their profit/revenue decreased; and well over a third (38%) say that they downgraded their profit outlook.

Overall, 11% of the workforce was lost through voluntary redundancy, enforced redundancy or staff leaving of their own accord and employers say that 23% of workforce losses were high performers. Almost two-thirds of employers and employees alike (59%) say their teams are under-resourced and 54% of employees say the team they work in is now weaker.

"During the downturn many organisations 'cut the fat' but these results suggest that many also 'cut into the muscle'. Employers desperately need to bolster not only the size, but also the strength of their teams to bring their businesses back to a place where they can compete effectively in their markets and establish a solid foundation for sustainable, long-term growth," said Moylan.

Clear evidence of increasing workforce liquidity and returning skills shortages is compounding employers' problems. The ranks of both active and passive job seekers have swelled considerably from 47% last year to reach 62% this year. Of those employees seeking a new role, almost all (93%) aim to be in a new role within 18 months.

"These figures forewarn of a staggering degree of movement in Australia and New Zealand's workforces. Roughly 40% of the entire workforce has a personal goal to be in a new role within the next six months," said Moylan.

Skills shortages are also returning. During the downturn 44% of employers said they were battling skills shortages in their industries. Now, in the aftermath of the downturn this proportion has risen swiftly to its current 57%.