Job seekers might find themselves facing a challenging environment as companies shift their focus towards retaining and upskilling their existing workforce rather than hiring new employees. Nicole Gorton, director at Robert Half, notes that businesses are more inclined to enhance the skills of their current staff to fill gaps rather than recruit externally.
This trend aligns with findings from a Deloitte employment report, which surveyed chief financial officers from Australia’s top 200 companies. Deloitte partner David Rumbens observed that many firms are implementing a de facto hiring freeze. Although these companies express confidence in their business performance, it’s based on gradually increasing demand rather than significant new hires. Consequently, businesses plan to meet this demand using their current employees.
The unemployment rate, currently at 4.2 per cent, is anticipated to rise to 4.5 per cent, according to Deloitte. This forecast comes despite recent Australian Bureau of Statistics data indicating that more than 58,000 people secured employment in July. However, this increase in employment has not significantly impacted the unemployment rate, which suggests that additional job losses may occur in the coming year.
Professor Leonora Risse from Canberra University highlights the application of the “Sahm Rule,” an economic indicator designed to signal potential recessions. Created by Dr. Claudia Sahm, this rule examines the average unemployment rate over the past three months. If this average rises by 0.5 per centage points above the lowest unemployment rate from the previous year, it suggests that the economy might be slipping into a recession. According to Risse, current data aligns with a pattern that could indicate a looming recession.
A technical recession is typically defined as two consecutive quarters of economic contraction. The Sahm Rule serves as an early warning system, urging policymakers to take proactive measures rather than react after the fact.
Recent data from the Australian Bureau of Statistics also shows a 0.5 per cent decline in household spending for June, following two months of increases. For those actively job hunting, Gorton advises a flexible approach. Job seekers may need to broaden their criteria regarding role type, salary, location, and industry. What was once a relatively quick job search process may now extend from a few weeks to several months.
Economists are closely monitoring employment trends in relation to potential interest rate adjustments. Risse cautions that discussions by the Reserve Bank about raising interest rates could further exacerbate the unemployment rate. As the economic situation evolves, both job seekers and policymakers will need to navigate these challenges carefully.
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