12/10/2009
Back to the Future
It just seems like yesterday that the financial markets were in turmoil, a recession was imminent and interest rates were dropping to a fifty year low. Now, the Government and Reserve Bank tell us that it is all over and the good times are coming again ! While many may debate how long this will take to occur, make no mistake, economic conditions are changing.
After lowering interest rates for the sixth and final time in April, this year, the Reserve Bank commenced raising interest rates earlier this month. Glenn Stevens the Governor of the Reserve Bank stated, after increasing interest rates by a quarter of one per cent “the global economy is resuming growth….economic conditions in Australia have been stronger than expected and measures of confidence have recovered….unemployment has not risen as far as had been expected”.
So, what does the future hold for us? Historically, since 1990, we have had only three periods of interest rate tightening with the average total rate increase being just under two and a half per cent (our financial markets are already factoring in another quarter per cent interest rate increase before Christmas !). Additionally, the domestic economy is gradually picking up pace across all sectors, confidence is returning and employers are starting to hire more staff.
Thus, we believe that before too long Australia will once again be faced with a skills shortage due to economic growth combined with our aging population. By 2014 the average age of an Australian worker will be 40 years old, presenting two challenges for businesses - a shrinking supply of highly skilled labour and an increasingly larger demographic of older Australians to be provided with goods & services.
Before too long your business will once again be faced with strong demand. But recruiting staff to cope with the increased demand will be more difficult this time, there will only be a limited pool of potential full-time employees to choose from. Many talented candidates will only be seeking part-time or flexible roles to fit in with their personal lifestyles. These individuals place a high value on their non-work time for a multitude of reasons including a desire to spend more time with a young family, a wish to undertake further education, the need to train or compete in sporting activities or just a desire to undertake other leisure activities.
Nine2Three has been developing numerous innovative flexible workplace strategies to ensure our clients will have access to high quality candidates in the years ahead. However, many of our larger growth-orientated clients have already started to rapidly hire staff. Perhaps this is a forward indicator that economic conditions may improve even more quickly than the Reserve Bank is suggesting !
Ross MacMillan holds a Bachelor of Commerce (Accounting, Finance and Systems) from the University of NSW, he is a member of the Institute of Chartered Accountants, member of the Securities & Derivatives Industry Association and a Fellow of the Financial Services Institute of Australia.
Important Note: These articles have been prepared for general circulation and are circulated for general informational purposes only; these articles should not be regarded as business or investment advice. The articles represent the views of the writers and are subject to change without notice. Additionally, while every care has been taken in the preparation of the articles no representation or warranty as to accuracy or completeness of any statement is given. An individual or organisation should, before any business or investment decision is made, consider the appropriateness of the information in this document, and seek professional advice, having regard to objectives, situation and needs. This document is solely for the use of the party to whom it is provided.
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