Labour Force Snapshot.

With the easing of COVID-19 restrictions across the country in sight Andrew Green, HOBAN Recruitment’s National Sales Manager reviews, the latest trends in the Australian labour market.

• Unemployment rate increases for the first time in almost 12 months to 4.6%
• NSW recovery drives national job growth 
• The number of people looking for work continues to fall to a record low

As Australia’s largest states rapidly approach various vaccine thresholds to unlock more freedom and the opening up of business and industry, we are expecting to see a change positive change in the employment results across the board.

Earlier this month, New South Wales’ unofficially coined ‘Freedom Day’ saw the state emerge from a slumber it’s been in for the last few months.

With over 8 million people across the state eager to return to pubs, restaurants and in-store retail (and a much-needed visit to the hairdresser for some), the country’s most populous state has led the national charge on job growth last month in preparation for the relaxing of restrictions.

Australia’s largest online job platform SEEK released its employment report for September noting that New South Wales saw a 20.6% increase in job postings compared to August. This figure will only continue to rise as the state’s economy continues to drive towards normality.

It’s no surprise that hospitality and tourism stood out as the leading industry to boast the highest increase in job growth – with a 28.5% growth in September compared to August.

Across the board, there was a 6% growth in job availability nationally with Victoria being the only state to report a drop of new jobs compared to August.

This isn’t surprising as businesses across New South Wales has had ample time to prepare for returning to normality whereas Victoria has been more conservative to announce their own ‘Freedom Day’. Similar trends should materialise for Victoria for this month’s reporting period as it quickly reaches similar vaccine results of its neighbouring state and the Andrews government releasing a road map to easing restrictions from lockdown.

Given Victoria is rapidly reaching vaccination milestones and earmarked to hit the target of 80% double vaccinated population by early November, it is expected that it too will follow the trends of demand in retail, hospitality & tourism and trades & services contributing to drive the national economy.

It’s only logical to assume the economy roars when states leave lockdowns, but when it comes to the unemployment rate – things aren’t as expected. For almost twelve months, nationally there has been continuing record drops in the unemployment rate however last month this number rose to 4.6%, 0.1 points higher than last month.

Let’s have a closer look at these figures below.

Labour Force Snapshot – September 2021

Data obtained from ABS ‘Labour Force, Australia August 2021’ Released 16th September 2021
https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release

Does an increase in job growth result in lower unemployment?

Well, it’s not as simple as that.

It’s ultimately down to the eligible working-age population and whether they sit in the labour force or out of the labour force. We’ll need to look at the numbers that make up the labour force.

Last month 129,000 people were removed from the labour force – this number was people both employed and unemployed but looking for work.

At the same time 155,981 additional people were deemed to be no longer in the working labour force – meaning they were of the working-age, but not deemed to be seeking employment.

The overall movement of people from the labour force impacts one of the most important metrics of the labour force survey – the participation rate.

The unemployment rate simply only shows the relationship between the number of unemployed people compared to the number of people in the labour force, rather than looking at the entire eligible working population.  

For example, let’s say if the economy collapsed and only 100 people were left working in Australia and 5 of those people didn’t have a job – that’s still only a 5% unemployment rate.

However, in our example it’s the participation rate that has crashed and burned almost towards 0% (or about 0.00004% in our make-believe apocalyptic collapse). The unemployment rate doesn’t sound so important now in comparison, does it?

With the shrinking number of people in the labour force last month, the participation rate has dropped 0.7 points to 64.5% in September compared to the month prior. Simply, there are fewer people in work on looking for work than last month.

With all things being equal, an increase in job growth and a reduction in the number of people in the labour force will not have an impact on the unemployment rate. One shouldn’t rely just on the unemployment rate as it can be a little deceptive.

But what is causing the exodus of people from the labour force? We know limited access to international talent pools is one thing, however, another is COVID-19 related government assistance.

Some Australians’ are still supported by the government on COVID-19 Disaster Payments – used to support people that have been out of work due to COVID-19. For the sake of calculating the labour force, the ABS does not include these people in the market for looking for work.

But as these payments begin to cease when regions edge closer to 70% and then 80% vaccine targets – along with the opening up of business and industry – there may be incentive and opportunity to bring people back into the labour force.

What does HOBAN think?

All eyes are on New South Wales as it leads the country in job growth and starting to return to normality. It will be interesting to see the impact the easing of restrictions has on Victoria and its influence on key industries.

Until the country is open for cross border migration and international borders re-up, we continue to see the market being ‘candidate-tight’ in nature.

Looking beyond the service sectors, it is South Australia that has sights on things much bigger (and higher) for its economy. SA will join the international supply chain in the space industry, driving Australia’s renewed interest in the space sector. 

With things a little closer to earth, the Festival State continues to lead not only the nation but the world in renewable energy projects with a pipeline of work set to allow the government to achieve its goal of a 50% decrease in greenhouse gases by 2030 and net zero emissions by 2050.

Looking past the fallout of the AUKUS deal, South Australia continues to secure and build on defence projects growing the sector. Adelaide and Greater South Australia are guided by a government focused on developing the local economy resulting in a future job boom in these sectors.

To understand trends like these and others, each year HOBAN Recruitment engages with Australia’s largest employers with an annual survey to understand trends for now and into the next 12 months.  

This year’s edition is special as it’s through the lens of the ongoing and evolving impacts of COVID-19. The survey seeks to understand the key workforce trends from sales to staff levels & turnover, salaries, recruitment strategies and retention.

Comprehensive analysis of the results has helped us determine the needs of the market across the next 12 months.

If you would like to a complimentary copy of the 2021/22 Workforce Trends Report, you can request a copy by following this link or don’t hesitate to contact me using the details below if you would like a copy. You can also contact me at any time if you would like to discuss how HOBAN Recruitment can support you and your organisation from understanding the market and its trends for your industry to anything else staffing related.

All eyes are on New South Wales as it leads the country in job growth and starting to return to normality. It will be interesting to see the impact the easing of restrictions has on Victoria and its influence on key industries.

Until the country is open for cross border migration and international borders re-up, we continue to see the market being ‘candidate-tight’ in nature.

Andrew Green

National Sales Manager

andrewg@hoban.com.au | 0434 306 138