Workers more loyal than ever (and other surprises about job tenure and mobility)

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Three of the most written-about themes in the Australian labour market
over the past few years have been the skills shortage (ie we can’t find
enough of the right staff), the booming mining and resources sector (ie
sucking workers out of other sectors) and the impact of Gen Y in the
workforce (ie what a bunch of job-hopping, demanding, brash know-it-alls
they are).

The amount of noise that these three issues create, and the media
willingly reports, creates some misleading impressions in this country
about the actual state of play in the workforce.

The reality is somewhat different.

The recently released report

Labour Market Turnover and Mobility
by Patrick D’Arcy, Linus Gustafsson, Christine Lewis and Trent
Wiltshire (Reserve Bank of Australia, Bulletin, December, 2012)
provides some excellent hard data about job tenure and work
mobility that refutes a couple of workforce myths. Specifically:

Contrary to popular belief and despite a rise in the share of the
workforce who are part-time or casual workers, the
share of workers with long tenures has also
increased over the past twenty years. The proportion of workers
who have been with the same employer for 20 or more years has
increased from 7.5% of workers in 1992 to around 10% in 2012.
The average tenure of employment for an Australian worker is
7 years
More than 40% of workers have been in their current job more than
5 years
25% of workers have been in their current job for more
than 10 years
Mining is the 17th (out of 19) largest employing
sector in Australia . Its workforce of around 250,00 is way
behind Health Care, Retail Trade and Construction, all sectors
employing over 1 million people

Here’s some additional data, from an analysis of the 12 month period
from March 2011 until February 2012, that I found most interesting
(mostly summarised from an economic briefing by Deloitte Access
Economics, 15 January 2013):

Approximately 80% of workers had remained in the same job over the
previous 12 months. The three factors most influential in job
movement are a worker’s age, their occupation and their employment
status (ie whether full-time, part-time or casual).
Generally high skill/high wage sectors have lower rates of job
turnover. Professional services, financial and insurance services,
health care, and public administration all showed turnover much less
than the 20% average. The mining sector is currently an exception to
this trend.

Unsurprisingly labour mobility was highest in the accommodation and
food services sector with around 35% of workers in that industry who
were new to their current employer in the past 12 months. The mining
sector was second with around 30% of workers in the industry with
their current employer for less than 12 months.
The largest contribution to employment growth in Queensland has come
from interstate migration, while WA has struggled to attract
Australians west. Its workforce growth has come predominantly from
within the State and from overseas.
Data from the 2011 Census suggests that around 1.5% of employed
persons commute interstate.
The phenomenon of fly-in/fly-out (FIFO) and drive-in/drive-out
(DIDO) has become firmly established in recent years. Between 2006
and 2011 the number of workers commuting interstate to WA more than
doubled to 13,600.
Recent ABS data shows that there are around 50,000 FIFO/DIDO workers
currently employed in mining or
mining-related construction projects. In the Pilbara and Bowen Basin
regions alone, 30% to 40% of all 25-54 year olds are FIFO/DIDO
workers – that’s an increase of around 50% since 2006.

Even more interesting was an in-depth analysis of reasons for people
leaving jobs (‘Job Separations’ in ABS language)

Type of job separation	Number (000’s)		Share of all separations
Involuntary		813
– Retrenchments*	390		15%
– Temporary jobs ending#	423		17%
Voluntary		1702
– Job sorting+	912		36%
– Lifestyle and personal reasons^	790		31%
Total	2514	2514

* Reasons include retrenched or employer went out of business

# Reasons include job was temporary or seasonal

+ Reasons include to obtain a better job or wanted a change,
unsatisfactory work conditions, to start own or new business, and closed
or sold business for economic reasons

^ Reasons include family reasons, left holiday job to return to
studies, own ill health or injury, closed or sold own business for
non-economic reasons and retirement

Over two and a half million job separations occurred during the twelve
months between March 2011 and February 2012 which is just under 21% of
the total Australian labour force. Just over two thirds of workers left
their jobs voluntarily and just under one third left their jobs
involuntarily.

As many workers would be counted more than once in the job separation
data it would be reasonable to conclude that the annual turnover in the
whole Australian labour market is somewhere between fifteen and eighteen
per cent.

ABS data indicates that half the people moving between jobs move to
another industry and half remain within their current industry.

The data would tend to suggest that in a rapidly
changing job market, loyal employees are increasingly loyal and that
many more people leave their jobs as a result of their own choice,
rather than their employer’s choice.

What makes for a good media headline often doesn’t
represent the reality. It’s as true for employment marketplace as it is
for the gossip pages.

Fifteen things about the Australian labour market you probably didn’t
know: 2012 update

Employment in Australia: Don’t generalise

Skilled migration: Where are we at?

Thanks Bro!

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