On the Monday immediately before the Melbourne Cup public holiday my wife and I decided to buy some new outdoor furniture (two couches and an umbrella), for use the next day when we were having guests around.
We drove to our closest outdoor furniture store and were served by the store’s manager. After finding out the specific type of furniture we were after he said, “Well, there’s not a lot of choice left after the weekend we just had”.
Responding to my quizzical look he continued, “I have been working in outdoor retail for 13 years and I’ve never experienced a busier weekend than the one we’ve just had. It was crazy; people just walking in and buying up thousands of dollars’ worth of stock in a few minutes”.
From the economic data that has been released since it seems that this explosion of consumer spending has been going on all across the country since mid-last year.
As this graph shows, consumer spending is up very strongly compared with the same time a year ago. Australians are spending about 10 per cent more, according to the Commonwealth Bank (CBA), with the most significant hikes in online spending and spending on goods.
Online news site Crikey summed up the likely underlying cause of the spending frenzy succinctly:
Australians travel abroad in very large numbers. For example, over Christmas 2019 there were 1.07 million foreign tourists, but 1.4 million Australians went abroad. Taking both sides of the equation away leaves us busier.
If all that money that Australians would have spent on Japanese ski trips and tickets to Broadway productions is spent on home improvements and local holidays, we’ll see a big leap in spending. Of course, it doesn’t always help tourism operators — those who depend on foreign tourists are struggling mightily.
Australians are taking the vast sums we spend on foreign travel and seeding them into the domestic economy. And the economy is roaring into 2021 on an enormous tidal wave of spending.
All this spending has had a dramatic impact on jobs with around 90 per cent of the jobs lost during the pandemic having returned.
Each state and territory, apart from South Australia, recorded a decline in their unemployment rate in December, compared to the previous month.
The national unemployment rate has continued to fall; it dropped from 6.8% in November to 6.6% in December, although well above the 5.2% March 2020 unemployment rate.
At the same time the labour force participation rate has never been higher, rising to a new record of 66.2%, 0.2 percentage points higher compared to December 2019. That means the improvement in the unemployment rate has come in spite of the participation rate, not because of it.
Digging into the data we find that full-time jobs remain 112,400 (1.3%) below the level recorded in March 2020 while total part-time jobs are 24,700 (0.6%) above the level recorded in March 2020.
Compared to our largest traditional allies, the United Sates and the United Kingdom, Australia’s economic performance compared very favourably.
Deloitte Access Economics noted in last week’s economic briefing that:
The unemployment rate in the US, with recovery flatlining in the face of a second wave, sits 3.2 percentage points above the pre-COVID level. In Canada the unemployment rate sits at 8.6%, with employment and participation both falling through December. Meanwhile, the UK has seen its unemployment rate rise in each of the last 14 months.
The upcoming (March 2021) removal of JobKeeper and reduction in JobSeeker are clouds on the horizon however the Reserve Bank is confident the savings so many households socked away in 2020 will ensure the current spending surge continues.
“High household savings was also likely to support consumption in the period ahead,” the Reserve Bank said in its most recent meeting’s minutes.
All of this good news means that recruiters, in most sectors, can plan for better times ahead however, as I flagged in my last blog for 2020, there is a major limiting factor ahead that very few recruiters will have dealt with in their lifetime – a dramatic decline in candidate supply.
This decline in candidate supply will be due to a dramatic drop in immigration and a decimation of the temporary resident labour pool, traditionally dominated by working holidaymakers and international students.
Immigration levels will be low well into 2021, with net overseas migration forecast to be minus 72,000 (from previous highs near 300,000).
This is the first time since the Second World War it has fallen to negative levels.
According to last October’s budget, Australia’s overall population growth is expected to be just 0.2% in 2020-21 and 0.4% in 2021-22, the slowest growth in over a century. In contrast, Australia recorded a net population gain of 154,000 in 2019-20.
Recruitment agencies must revisit their candidate strategy (you do have a candidate strategy don’t you?) right now to minimise the likelihood that they experience the candidate crisis from hell during 2021 and 2022.
Here are a few suggestions when you take a long hard look at your candidate strategy:
- Differentiate candidate generation (candidates you do not yet have a relationship with) from candidate management (those you do).
- Within candidate management segment those candidates who are active (on one, or more, of your vacancies) from those that are not active.
- Revise, or implement, key metrics for both candidate generation and candidate management.
- Revise, or implement, a ranking system for all candidates. You should be able to identify the top quartile of your candidates, using any criteria, in less than ten seconds (or four clicks).
- Appoint a candidate champion with clear accountabilities and responsibilities
- Decide what type of communication will be delivered, how, by who, and how frequently, to each candidate segment (consider seeking specialist external branding and marketing help for this critically important area).
- Elevate database/CRM protocol (you do have them, don’t you?) compliance to ensure that you can track the efficacy of all your candidate activities
Finally and most critically, measure candidate experience and act on what you learn.
Undertaking a lot of well-meaning activity, without measuring what’s working (or not), and how well (or badly) it’s working is a mistake you can’t afford to make at any time; in 2021 it could more costly than ever before.