It really is anyone’s guess what is going to happen over the next 12 months as we come out of lock downs and get back to “Covid Normal”.
Australia is a few months behind several countries on opening back up so we have the benefit of seeing some interesting data coming out of the US and UK which at least gives us some idea of what to expect.
- 25 million people resigned, without jobs to go to, in the first 7 months of the year;
- Largely attributed to employees feeling undervalued by employers;
- This is significant because, unlike Australia, in the US the majority of people’s health insurance is tied to their employer;
- This has resulted in significant labour shortages and wage increases;
- In a recent PBS news hour report, one cleaner reported her wage increased from 12.5ph to 16ph with improved health care;
- September job vacancies have risen to a record high of 1.2M;
- Wages in the three months to August grew by 4.1-5.6%;
- Expectation is that as people get used to the new normal, the majority of those jobs will be filled reasonably quickly as they are in the service industry;
- This will be tempered in the second half of the year as there is an expectation that the UK will follow the US lead in mass resignations;
- The national unemployment rate edged up from 4.5% to 4.6%;
- That would have been higher but for the participation rate hitting a 15-month low in September, with just 64.5% of people aged 15 and over currently working or actively looking for work;
- The underutilisation rate (unemployed + underemployed) edged up from 13.8% to 13.9%;
- Between June and September – the period covering the recent lockdowns – roughly 281,200 jobs disappeared, and 60% belonged to women.
- While growth is sluggish there were 216, 000 job vacancies in August this year, more than any other August in the last decade.
The next 12-18 months are going to present some real challenges for both businesses and people looking for work.
From a business perspective, more and more candidates are going to get multiple offers and more candidates will get counter offers because the cost of replacing is going to either be too high or take too long.
Because of the expected increase in demand for people, the other challenge is that we are going to see an increase in the number of people leaving a job within the first 6 months of employment if they are not completely happy with the choices they have made.
To minimise the risk of people moving for purely financial reasons then, it is worth doing a salary review immediately and then 6 months as well as offering more flexibility to work from home.
For people looking for work making the right decision is going to be harder for the above reasons as well.
Making the wrong choice or moving jobs too frequently does have real consequences on your professional development so it is going to be increasingly important to take time to really think about what it is you want out of the next 12-18 months. Salary will take care of itself.
If you are interested in discussing any of the above and how it applies to you, please feel free to get in contact.