Interest rate rises fail to dent companies looking to hire
Demand for managerial jobs spiked in August to a three-year high despite fears that economic uncertainty and rising interest rates would stifle the hiring of senior staff, a new study has found.
The study, conducted by recruitment firm EL Consult, found that demand for managers with finance, marketing, engineering and It backgrounds was especially strong in August, according to The Australian Financial Review. Demand for managers with IT experience spiked 13% last month.
Evidence of a peak in demand for managers comes ahead of the Thursday release of labour force data, which is expected to show that 35,000 more workers found jobs last month, AFR reported.
Executive search firms said they had been busy as companies continued to expand and overhaul their technology. Search firm Johnson Partners told AFR that it had placed a record number of executives in July and August. CEO Jason Johnson noted that the strong trading period came after three years of annual revenue growth of more than 30% between 2019 and 2021.
“We were all thinking it would ease off because of rising interest rates and sentiment dropping in some northern hemisphere markets, but consumer and business sentiment continues to be high,” Johnson said. “It continues to be a positive environment.”
Johnson said that demand for executives with experience in sustainability, robotics, artificial intelligence and precision manufacturing was especially strong.
“In the past 24 months, we have placed more chief digital officers than we did in the preceding five years,” he told AFR. “There is massive demand for business transformations.”
Grant Montgomery, chief executive of EL Consult, told AFR that the growth in demand for managerial staff indicated rising business confidence.
“Ten per cent is quite an extraordinary increase,” Montgomery said. “[Companies] are [hiring] executives for future growth of the business.”
He said that a few months ago, business leaders had been worried about the outlook for interest rates and the US economy, with uncertainty exacerbated by the May general election. Those fears have now passed, he said.
“[Leaders] now think they have got a better handle on this,” he told AFR. “They are expecting a more consistent future. It’s not that they expect a massive future, but their feeling about the economy is that it is stabilising.”
Carol Lewis, a director at executive recruitment firm Stanton Chase, said that activity had slowed in the middle of the year due to political and interest rate uncertainty. However, she said business has picked up since then.
“We’re seeing the end of that now,” Lewis told AFR. “I am really busy now.”
Montgomery said he expected the pace of recruitment to slow in the coming months, noting the likelihood that governments would reduce expenditures and the slowdown in the Chinese economy.
Johnson agreed that recruitment was likely to slow early next year, but said he still expected strong trading over the next 12 to 18 months.
Bill Sakellaris, managing director of Transearch, told AFR that the firm expected high demand for chief information officers and chief technology officers.
“Many organisations don’t believe, based on current talent mapping, that Australia has enough available leaders for these roles,” he said. “We have had to expand our search and draw on our global network. I’m currently facing the same challenge as I’m tasked to find a number of executives to lead Australia’s space and rocket-launch capability. The main challenge is the shallow pool of local talent in this niche and relatively new sector.”
Sakellaris told AFR he was seeing salary increases between 20% and 40%, as well as generous signing bonuses.
