22/10/2008 - 22:00

Employment dynamic shifts

22/10/2008 - 22:00


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TWELVE months ago, the idea of having more than a handful of job applications for a single vacancy would have been beyond contemplation for many businesses in Western Australia.

TWELVE months ago, the idea of having more than a handful of job applications for a single vacancy would have been beyond contemplation for many businesses in Western Australia.

Fast forward to October 2008 and the first tremors of the global financial crisis are being felt in the recruitment sector, as companies take stock of the situation and reassess growth plans.

This week's indication that the federal government is likely to reduce Australia's migrant intake next year was a further sign that the previously insatiable demand for labour is likely to slow.

In WA, resources players such as Woodside have declared a hiring freeze because of the uncertain outlook - a trend that will continue, according to some recruitment consultants.

Downing Teal general manager western region, John Downing, said the drop in requests for candidates had accelerated during the past two weeks.

"Certainly in the mining sector, there's been a considerable downturn in the level of demand for people [and] a tightening where companies are imposing recruitment freezes or restricting the number of people they're hiring," he said.

"There are also plenty of stories of previously impossible-to-find geologists and mining engineers applying directly [for jobs] through mining companies."

Mr Downing said the oil and gas sector was less affected than the mining industry, which contained medium-sized players hit by the credit squeeze, and the construction sector was flat out with a pipeline of work.

However, it's a different story for professional services firms, especially those in finance and engineering.

"Probably in the last couple of weeks I've noticed that engineering companies in particular have been slow to commit to new positions and take on new staff. Some of the engineering work is on hold or slowing down, and project funding will be harder to get," Theseus Project Services director Greg Preston said.

However, he said the availability of candidates had remained relatively constant.

"We're still looking at a net deficit of people with 20 years' experience; what's changed is the urgency of getting people," Mr Preston said.

It's this emerging cautiousness across all sectors that will affect the recruitment sector, according to Gerard Daniels Asia Pacific managing director, Tony Taylor.

"People are just waiting and watching, and in that environment, they're reluctant to commit to the search process for roles. There is some indication of that starting to appear in the WA market," Mr Taylor said.

"We are clearly in an environment where there is uncertainty, and in a period of uncertainty, people defer non-critical decisions."

Mr Taylor said rather than widespread cancellation of roles, more businesses were reluctant to start recruiting for new or long-term unfilled positions.

"Most of the people we talk to are confident about their business and confident about the market they operate in," he said.

"[The change in the market] probably manifests itself as people not pushing the button on non-critical roles."

Porter Consulting Group managing director Kristy Porter said banking and finance were areas of concern for the business, with some clients applying recruitment freezes.

"We're seeing an easing up in candidate supply, particularly on the support front and administration roles," she said.

"The power is shifting back to the employer. Job security is at the forefront of employees' minds."

Ms Porter said she was also examining her own business model more closely, as the slowdown would inevitably impact on the recruitment sector.

"The players that do not have the same level of scrutiny, who were doing so well in the boom, will be challenged now," she said.

Mr Preston agreed that some firms would inevitably leave the industry over the next year.

"There won't be a shakeout just yet, but there's been a huge influx into the recruitment industry and the barriers to entry are very low," he said.

"This huge amount of new entrants is not sustainable in the long term, but [consolidation] won't happen yet; it's more likely around the middle of next year."


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