THE HUDSONREPORT:FORWARD FOCUS 2016

NAVIGATE AUSTRALIA’S TALENT LANDSCAPE

FORWAR D FOCUS 2016

PERMANENT HIRING EXPECTATIONS: NET EFFECT (%)Australia’s net effect intention to hire stands at 23.5% for the first half of 2016. Measured by Hudson for over a decade, the net effect is calculated by taking the percentage of employers surveyed who in the next six months expect to increase permanent staff levels and subtracting the percentage of employers who expect to decrease staff levels.

NET HIRING INTENTIONS AT FOUR-YEAR HIGH

H1

20

10

29 . 2

33 . 2

30 . 8

25 . 8

17.6

9 .18 . 3

12 . 2

9 . 2

18 .7

15 .1

H1

20

13

H2

20

11

H2

20

14

H2

20

10

H2

20

13

H1

20

12

H1

20

15

H1

20

11

H1

20

14

H2

20

12

H2

20

15

H1

20

16

3 4 . 9

23 . 5

Dean Davidson Executive General ManagerHudson Australia & New Zealand

For the last decade, the Hudson Report has tracked ‘intentions to hire’ as a status check on the Australian economy and the hiring landscape.

But demand for talent is one thing, supply is another. The picture isn’t quite complete without a line of sight into the people who are being hired. As a result, the Hudson Report has now been expanded to include data on employees and their career plans.

Our objective: to provide employers with insights that help them attract and retain the best people in an increasingly fluid talent market.

Because fluidity – or liquidity as we’re calling it – is the name of the game in 2016. The new Hudson Report reveals a significant proportion of the Australian workforce is prepared to move this year: move jobs, move sectors and even move countries.

The data reveals hiring intentions are at a four-year high – the net effect of intention to hire today stands at 23.5%. This is the largest intention to hire registered by the Hudson Report since July to December 2012.

This reflects the story playing out in the economy. Economic growth beat forecasts in the September 2015 quarter, accelerating to 2.5%, off the back of the highest exports in 15 years.1 Business2 and consumer3 confidence both rose in the latter part of the year, signalling further spending and investment in hiring.

While we are still working through a transition from the mining boom to Prime Minister Turnbull’s ‘ideas boom’, signals indicate 2016 will see strong hiring demand and high levels of talent mobility.

The ‘war for talent’ never went away. It’s just been in a temporary ceasefire – and 2016 will be the year it ratchets up again. So how should employers prepare? Who wants to move, to where and on what terms? Who’s paying what and by when? The answers all lie ahead.

1 Reserve Bank of Australia, Economic Snapshot, 3 Dec 2015 2 NAB Monthly Business Survey, Dec 2015 3 Westpac Consumer Sentiment Bulletin

3

LIQUID EMPLOYMENT MARKETAUSTRALIA:

4

DAYS OF DISRUPTION

Volatility, uncertainty, complexity and ambiguity. This is how we work and live now. Driven by technological change and disruption unheard of since the Industrial Revolution, the implications of these characteristics on the talent landscape are significant.

1

FORWAR D FOCUS 2016

DAYS OF DISRUPTION LACKING THE COMPETENCIES TO SURVIVE & THRIVE?

INSIGHTS: > A period of historic change. So great is the pace of change today that organisations are describing this new world order as VUCA, or Volatility, Uncertainty, Complexity and Ambiguity.> Fluidity is the name of the game. Organisational demands are flexing up and down, job seekers’ behaviour and expectations are changing rapidly, and the nature of work itself is being transformed. The stakes are high and employers need people with the requisite skills to thrive in this environment. The question is, are organisations ready? While they must find and secure the best talent, they must also arm that talent with the skills to help them succeed in the ever-changing business environment.

TEAMS TODAY:

SOFT SKILLS MOST LACKING IN THE WORKPLACE

44% 32% 27% 21% 20%

1 . D R I V I N G & M A N A G I N G C H A N G E

2 . S T A K E H O L D E R E N G A G E M E N T

3 . C O A C H I N G & D E V E L O P I N G O T H E R S

4 . R E S I L I E N C E 5 . D A T A L I T E R A C Y

The No 1 competency lacking in teams across Australia today: Driving & Managing Change

5

6

FORWARD FOCUS 2016

A LIQUID EMPLOYMENT MARKETThe market is liquid: 62% of the Australian workforce are open to new opportunities in 2016.

2

WHO’S LOOKING FOR A NEW JOB?

INSIGHTS: > Don’t be resigned to resignations. Be proactive in identifying pain points for your employees, empower managers to have frank career conversations, and work hard on getting your rewards and incentives right.> Plan for disruption. Build a pipeline of talent and nurture them, work on your employer branding strategy and stay in touch with your recruitment consultants – because at some point, you will need to hire.

PROFESSIONALS:

Additionally, almost 1 in 2 Australian professionals plan to move jobs within a year and 1 in 4 within 6 months

62%of Australian professionals

are actively or passivelyseeking a job right now

STATE OF JOB SEEKING IN AUSTRALIA 2016

A C T I V E LY S E E K I N G A N E W J O B 2 6 %

P A S S I V E LY S E E K I N G A N E W J O B 3 6 %

P L A N T O S TAY I N C U R R E N T J O B 3 7 %

7

FORWAR D FOCUS 2016

8

WHO’S ADDING HEADCOUNT?EMPLOYERS:

INSIGHTS: > The war for talent is back: are you ready? With almost 1 in 3 employers intending to grow their workforce, the market will be hot. If you haven’t developed a robust talent attraction and management plan, now is the time.> Your brand is your currency. Companies will be knocking on your door for your talent. You need to be very clear on what differentiates your organisation as an employer. It’s never too early to review and refresh your Employee Value Proposition to ensure it aligns with what talent wants in today’s market.

I N C R E A S E 3 2 %

N O C H A N G E 5 9 %

D E C R E A S E 9 %

91%of Australian employers intend to either increase or maintain their permanent headcount in the first half of 2016

1 in 3 employers intend to add permanent headcount in H1 2016

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S P E C I A L I S T S K I L L S E T / S R E Q U I R E D 2 1 %

T O D E L I V E R N E W S T R AT E G I E S / P L A N S 2 2 %

WHY THE HEADCOUNT GROWTH?EMPLOYERS:

INSIGHTS: > Growth is a good problem to have. The hiring intentions of Australian employers are a positive sign for the economy. While it makes talent attraction harder, growth means more potential customers and revenue for your business. The key is to plan for this uptick in hiring activity so you aren’t caught short.

Organisational growth the No 1 reason for increasing headcount

TOP REASONS FOR INCREASING HEADCOUNT

TOP REASONS FOR DECREASING HEADCOUNT

O U R O R G A N I S AT I O N I S G R O W I N G 5 0 %

I N C R E A S E D W O R K L O A D 3 0 %

N E W T E A M P R O J E C T / S 3 6 %

5 8 % H E A D C O U N T R E D U C T I O N / B U D G E T C U T S

11 % O F F S H O R I N G / O U T S O U R C I N G

4 9 % O R G A N I S AT I O N A L R E S T R U C T U R E

11 % I N C R E A S E D E F F I C I E N C I E S I N P R O C E S S

8 % S K I L L S E T S N O L O N G E R R E Q U I R E D

FORWAR D FOCUS 2016

EMPLOYERS HIRING ACROSS AUSTRALIA

A STATE OF FLUX:

INSIGHTS: > Say goodbye to the two-speed economy. As the mining boom dials down, the demand for talent has equalised across the country. The ACT, Queensland and Victoria jostle for top spot in terms of adding headcount, while Information Technology across Australia, followed by Professional Services, is the sector leading headcount additions.

WHERE EMPLOYERS ARE ADDING PERMANENT HEADCOUNT

30% WA

22% SA

36% VIC

33% NSW

36% QLD

38% ACT

TOP INDUSTRIES WHERE EMPLOYERS ARE ADDING PERMANENT HEADCOUNT

I N F O R M AT I O N T E C H N O L O G Y 4 6 %

H E A LT H C A R E ( E X C L G O V T ) 3 2 %

R E TA I L 3 6 %

E D U C AT I O N 2 9 %

P R O F E S S I O N A L S E R V I C E S 4 5 %

F I N A N C I A L S E R V I C E S / I N S U R A N C E 3 2 %

N O N P R O F I T 3 5 %

M A N U F A C T U R I N G 2 6 %

C O N S T R U C T I O N / P R O P E R T Y / 3 3 % E N G I N E E R I N G

G O V E R N M E N T 2 5 %

R E S O U R C E S A N D M I N I N G 16 %

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PROFESSIONALS SEEKING NEW JOBS ACROSS AUSTRALIA

A STATE OF FLUX:

BY LOCATION: PERCENTAGE OF RESPONDENTS ACTIVELY SEEKING JOBS

BY INDUSTRY: PERCENTAGE OF RESPONDENTS ACTIVELY SEEKING JOBS

28% WA

26% SA

26% VIC

25% NSW

25% QLD

32% ACT

INSIGHTS: > Your best new hire may be in another industry. The hardest-hit sectors are driving employees into the job market. To take advantage, be flexible and creative about how you access this talent. Consider how to re-skill or up-skill those who have the right competencies but lack industry experience, or how you might implement peer-to-peer training programs.

M A N U F A C T U R I N G 3 4 %

R E TA I L 2 6 %

E D U C AT I O N 3 3 %

C O N S T R U C T I O N / P R O P E R T Y / 2 3 % E N G I N E E R I N G

R E S O U R C E S A N D M I N I N G 3 3 %

P R O F E S S I O N A L S E R V I C E S 2 6 %

N O N P R O F I T 3 1 %

H E A LT H C A R E ( E X C L G O V T ) 2 1 %

G O V E R N M E N T 3 0 %

F I N A N C I A L S E R V I C E S / I N S U R A N C E 2 1 %

FORWAR D FOCUS 2016

12

THE PROFESSIONS ADDING HEADCOUNT

PROFESSIONS SPOTLIGHT:

INSIGHTS: > The talent shortage in law firms continues in 2016. The drivers for this shortage are renewed business confidence and growth in transactional work combined with a lack of training in junior to mid-level positions over the last few years. Added to this is the continued growth in the international legal market which has lured talent offshore.> Use specialists to find specialists. In a tight employment market, your recruitment consultant needs to have strong networks and a nuanced understanding of the professions you are recruiting.

LEGAL PROFESSIONALS IN DEMAND

L E G A L 5 1 %

3 7 %

3 6 %

3 5 %

3 5 %

3 2 %

3 2 %

2 8 %

2 2 %

1 8 %

T E C H N I C A L & E N G I N E E R I N G

S A L E S , M A R K E T I N G & C O M M U N I C AT I O N S

H U M A N R E S O U R C E S

T E C H N O L O G Y

P U B L I C S E C T O R

F I N A N C I A L S E R V I C E S

O F F I C E S U P P O R T

A C C O U N T I N G & F I N A N C E

S U P P LY C H A I N & P R O C U R E M E N T

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OFFICE SUPPORT ON THE MOVE

PROFESSIONS SPOTLIGHT:

INSIGHTS: > Heed the warning signs. If your organisation is reliant on those professions where up to 1 in 3 employees are looking to move, then it’s time to batten down the hatches. Seek feedback through surveys and conversations about what might drive defections, while at the same time nurturing talent pools for critical roles.

THE PROFESSIONALS ACTIVELY SEEKING NEW JOBS

O F F I C E S U P P O R T 3 7 %

3 6 %

3 0 %

2 7 %

2 5 %

2 2 %

19 %

A C C O U N T I N G & F I N A N C E

P U B L I C S E C T O R

T E C H N I C A L & E N G I N E E R I N G

2 4 %

2 4 %

L E G A L

H U M A N R E S O U R C E S

S U P P LY C H A I N & P R O C U R E M E N T

2 3 %S A L E S , M A R K E T I N G & C O M M U N I C AT I O N S

T E C H N O L O G Y

F I N A N C I A L S E R V I C E S

MOBILITY: WHERE JOB SEEKERS WANT TO GO IN 2016Australian professionals are open to moving industry and even country for the right role, with 86% saying they would move industry and 44% saying they would move country.

3

14

FORWAR D FOCUS 2016

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HOW JOB SEEKERS ARE LOOKING FOR NEW ROLES

THE JOB SEARCH:

INSIGHTS: > Job boards and recruitment agencies dominate. The desire among Australia’s professionals to work with a recruiter suggests candidates appreciate the networks and the advice they provide in a competitive job market. > Fish where the fish are swimming. People are keen to use their networks, so have an incentive scheme for referrals. Leverage social media, where 1 in 5 professionals will be looking. Create a compelling online careers proposition to appeal to direct approaches. And of course, work with recruitment professionals: we’re the first ones job seekers speak to when considering a move.

WHERE AUSTRALIANS FOUND THEIR LAST/CURRENT JOB

WHERE THEY’LL LOOK FOR THEIR NEXT JOB

O N L I N E J O B B O A R D O N L I N E J O B B O A R D 4 0 % 8 6 %

2 4 % 6 2 %

4 8 %

W O R D O F M O U T H 9 % S P E C I A L I S T P U B L I C AT I O N / S I T E 2 6 %

S P E C I A L I S T P U B L I C AT I O N / S I T E 2 % G E N E R A L P U B L I C AT I O N / S I T E 1 4 %

R E C R U I T M E N T A G E N C Y R E C R U I T M E N T A G E N C Y

D I R E C T C O N TA C T W I T H F I R M 3 % D I R E C T C O N TA C T W I T H F I R M 2 4 %

S O C I A L M E D I A 1 % O T H E R 2 %

15 %MY PERSONAL NETWORK M Y P E R S O N A L N E T W O R K

G E N E R A L P U B L I C AT I O N / S I T E 2 % S O C I A L M E D I A 2 2 %

16

FORWAR D FOCUS 2016

INDUSTRIESON THE MOVE:

INSIGHTS: > Why government? It’s not difficult to see why Government attracts more professionals than any other industry. With a reputation for providing job security and strong benefits packages, it also offers work life balance and plenty of scope for career development.

15 %

86%of professionals would change industries for the right job. The No 1 choice? Government.

G O V E R N M E N T

13 %

11 %

10 %F I N A N C I A L S E R V I C E S / I N S U R A N C E

N O N P R O F I T 6 %

I N F O R M AT I O N T E C H N O L O G Y

A D V E R T I S I N G / M A R K E T I N G / M E D I A 7 %

R E S O U R C E S / M I N I N G 5 %

P R O F E S S I O N A L S E R V I C E S

C O N S T R U CT I O N / P R O P E R T Y / E N G I N E E R I N G 7 %

E D U C AT I O N 4 %

T O U R I S M & H O S P I TA L I T Y 4 %

THE TOP 10 INDUSTRIES AUSTRALIAN PROFESSIONALS WOULD JOIN FOR THE RIGHT JOB

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COUNTRIESON THE MOVE:

INSIGHTS: > The local workforce is truly global. A global outlook, a sense of wanderlust and the ease of keeping touch through technology have made snagging an overseas job easier. If you have an international footprint, look for ways to leverage it rather than waiting for staff to approach your competitor in another market.

U N I T E D S TAT E S 2 2 %

U N I T E D A R A B E M I R AT E S 4 %

U N I T E D K I N G D O M 2 0 %

C H I N A 2 %

N E W Z E A L A N D 9 %

F R A N C E 2 %

S I N G A P O R E 8 %

G E R M A N Y 2 %

C A N A D A 6 %

I R E L A N D 1 %

TOP 10 COUNTRIES AUSTRALIA-BASED PROFESSIONALS WOULD RELOCATE TO FOR THE RIGHT JOB

1 U N ITE D STATE S

5 CANADAI R E LAN D 10

2 U N ITE D K I NG DOM

3 N EW Z EALAN D

6 UAE 7 CH I NA

4 S I NGAPOR E

9 G E R MANY8 FRANCE

of professionals would move countries for the right job

44%

FORWAR D FOCUS 2016

18

41%

B O O M E R S

COUNTRY BY GENDER AND GENERATION

ON THE MOVE:

INSIGHTS: > Don’t rely on the Boomers to stick around. As Baby Boomers rewrite the book on ageing, they crave change and novelty almost as much as their children. The desire for career progression, work satisfaction and a possible overseas adventure cuts across both age and gender – and so should your retention strategy.

Generation X least likely to relocate

40%

G E N X

Men more likely than women to relocate

5 1 % 3 7 %

G E N Y

52%

19

ATTRACT, RETAIN & ENGAGE:

HOT BUTTONS FOR TALENT IN THE YEAR AHEADThe market is moving, but are employers prepared? 65% of employers do not expect to pay more for people they hire today than they did a year ago.

4

FORWAR D FOCUS 2016

20

“THE PUSH FACTOR”FORCES AT WORK:

INSIGHTS: > Boredom is the enemy of retention. Our attention spans are shorter than ever – even at work. Providing employees with stretch assignments, showing them a clear path for career progression, looking for internal transfer opportunities and having honest career conversations are among the most powerful ways to hang on to your talent. Salaries matter, but plenty of other factors drive decisions to stay or go.

WHY PROFESSIONALS WOULD LEAVE THEIR CURRENT ROLE

B O R E D A N D N E E D A N E W C H A L L E N G E 2 2 %

1 8 %

16 %

B E T T E R W O R K L I F E B A L A N C E 8 %

R E L O C AT I O N 5 %

L A C K O F C A R E E R P R O G R E S S I O N

P O O R R E L AT I O N S H I P W I T H M A N A G E R / D I R E C T B O S S 6 %

W O R K C L O S E R T O H O M E 4 %

D I S A P P O I N T M E N T W I T H S A L A R Y

C A R E E R C H A N G E 5 %

W O R K I N G T O O M A N Y H O U R S 2 %

L A C K O F T R A I N I N G 1 %

21

“THE PULL FACTOR”FORCES AT WORK:

INSIGHTS: > Money only gets you a seat at the table. Salary is crucial when hiring, so you’ll need reliable pay data to ensure you’re competitive, as well as a willingness to negotiate. But there are other powerful tools in your toolbox: don’t underestimate the value of bringing potential employees in to get a feel for your culture, providing flexible working conditions and mapping out a clear career path.

WHAT PROFESSIONALS MOST WANT IN A NEW ROLE

T H E R I G H T S A L A R Y 5 7 %

5 2 %

3 6 %

3 4 %

G O O D B E N E F I T S P A C K A G E 13 %

W O R K L I F E B A L A N C E

2 3 %

T R A I N I N G O P P O R T U N I T I E S 10 %

C U LT U R A L F I T

A C O M P A N Y W H O S E V A L U E S A R E C L O S E T O M I N E 2 1 %

A N E M P L O Y E R W I T H A S T R O N G B R A N D 6 %

G O O D J O B T I T L E 2 %

C A R E E R P R O G R E S S I O N

A M A N A G E R I R E S P E C T

FORWAR D FOCUS 2016

22

Bored and need a new challenge

Bored and need a new challenge

“PUSH”: BY DEMOGRAPHIC

Very few differences on the “Push” factor

22% 22%

15% 18%

16% 20%

BORED AND NEED A NEW CHALLENGE

DISAPPOINTMENT WITH SALARY

LACK OF CAREER PROGRESSION

1

3

2

Lack of careerprogression

Lack of careerprogression

Disappointment with salary

Bored and need a new challenge

Disappointment with salary

Disappointment with salary

Lack of careerprogression

The right salary

Work life balance1

3

2

The right salary

The right salary

Career progression

Work life balance

Work life balance

Cultural fit Cultural fit

23

“PULL”: BY DEMOGRAPHIC

Notable differences on the “Pull” factor

55% 60%

WORK LIFE BALANCE

THE RIGHT SALARY

38% 36%

CULTURAL FIT CAREER PROGRESSION

54% 50%

THE RIGHT SALARY

WORK LIFE BALANCE

FORWAR D FOCUS 2016

ARE ORGANISATIONS PREPARED?THE MONEY QUESTION:

INSIGHTS: > Employers are going broke saving money. Withholding pay rises can be a false economy, given the direct and indirect costs of replacing staff. With Australia’s Consumer Price Index increasing by 1.5% over 20151, employees who miss out on a payrise actually experience a drop in real income. As all signs point to a tighter labour market this year, it’s timely to include salary increases in budget planning to ensure you remain competitive.

Salary is now the third highest reason an employee leaves a job and the No 1 reason they would move to a new job. Are employers listening?

of professionals have not had a pay increase in the last year

the proportion of employers who do not expect to pay more for talent today than they did a year ago

PAY RISES AWARDED TO PROFESSIONALS LAST YEAR

0 - 5 %

6 - 10 %

11 - 15 %

16 % O R O V E R

C A N ’ T R E C A L L

YE

S

NO

NA

56%

21%

8 %

12%

3 %

6%

43%

51%43% 65%

1 Australian Bureau of Statistics, Consumer Price Index, Sept 2015

25

THE BENEFIT IN BENEFITSPAY RISE ALTERNATIVE:

INSIGHTS: > Money isn’t everything. If your organisation really can’t afford to increase salaries, there are other options that may not affect the bottom line. The key is to seek feedback: ask employees what they want. We all value different things, so consider offering a range of non-financial or longer-term rewards that will increase engagement and retention.

IF YOU WERE GIVEN A CHOICE, WHAT WOULD YOU CONSIDER SWAPPING A PAY RISE FOR?

I N C R E A S E D A N N U A L L E A V E 4 1 %

B O N U S E S 3 6 %

W O R K L I F E B A L A N C E 3 2 %

I N C R E A S E D S U P E R A N N U AT I O N 2 3 %

S H A R E S I N T H E B U S I N E S S 19 %

FORWAR D FOCUS 2016

26

THE POWER IN PROMOTIONS

INSIGHTS: > Gen Y are hungry for promotion. This will be a sleeper issue for employers if the job market picks up in 2016. Young people who feel overlooked will go elsewhere for the recognition they crave. Employers need to treat this risk seriously: not everyone is ready for promotion, but individuals need to know when, why and how they can create a path to promotion.

PROFESSIONALS’ VIEWS ON PROMOTIONS

Promotions a priority for Gen Ysay getting a promotion is important or very important

would generally expect to be promoted within 2 years in a role

only 26% have been promoted in their current role

68%

T H E V I E W

68% of all professionals say a promotion is important or very important

22%71% expect to be promoted within 2 years

T H E I D E A L T H E R E A L I T Y

22% have been promoted in their current role

84% 82% 26%

PAY RISE ALTERNATIVE:

71%

27

KEY TAKEOUTS

Don’t be complacent. If, as predicted, 1 in 3 employers increase hiring, employees will soon get the message that the market is heating up and that opportunities abound. Passive job seekers will become active, your best people will be courted by your rivals and it will be War for Talent 2.0. In 2016, smart employers will be proactive and step up their attraction, retention and engagement strategies.

Don’t ask, don’t get. The Hudson Report shines a light on the minds of employees and what it reveals is a diversity of wants, needs and expectations. Your hiring and talent strategy needs to reflect the diversity of the workforce across genders, ages and industries. But you don’t need to guess it all – ask your people what they want. Use surveys, manager feedback and social media to take the pulse of the organisation.

Ask for help. Mastering a talent strategy is difficult. There are so many moving parts: keeping the employees you have, building a pipeline of potential talent, then finding and selecting new people. In an unpredictable and highly liquid market, partnering with talent and recruitment experts will help you succeed in both strategy and execution.

AM E R ICAS | AS IA PACI F IC | E U ROPEH U DSON.COM

METHODOLOGY Hudson undertook quantitative research with hiring managers and employees across Australia to analyse the talent landscape and provide insights on what employers might expect in 2016.

We canvassed the views of 3,793 employers and 4,198 employees in November 2015. From these findings we developed this report – a combination of the survey findings and Hudson’s insights on the hiring landscape. Percentages don’t always total 100% as respondents could select more than one option for certain questions.

ABOUT HUDSON Hudson is a global talent solutions company with expertise in leadership and specialised recruitment, recruitment process outsourcing, talent management and contracting solutions. We help our clients and candidates succeed by leveraging our expertise, deep industry and market knowledge, and proprietary assessment tools and techniques. Through relationships with millions of specialised professionals globally, we bring an unparalleled ability to match talent with opportunities by assessing, recruiting, developing and engaging the best and brightest people for our clients. We combine broad geographic presence, world-class talent solutions and a tailored, consultative approach to help businesses and professionals achieve higher performance and outstanding results.

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