Finance Work What’s happening with the jobs market in 2014?

What’s happening with the jobs market in 2014?

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If you’re looking ahead to 2014, trying to get an idea of your employment prospects, then headlines like Holden closing its operations in Australia and Qantas shedding jobs won’t exactly make for joyful reading.

And you’re not alone. According to Westpac’s most recent consumer expectation survey, more people said they expected the unemployment rate to rise in 2014 than said it would drop. Economists with major banks and consulting firms agree on the direction – up – but not on where it will peak.

All this doom and gloom is over-rated, though, with the likelihood being that if you have a job, you’re likely to keep it. And while unemployment is rising, it’s near the top.

The jobs market in 2014, however, will be an uneven contest for some.

“Our forecast is for unemployment – now at 5.8 per cent – to be above 6 per cent, around 6.25 per cent, by the middle of 2014. There will be more jobs created but very slowly,” says Richard Robinson, associate director of economics at business research and forecasting firm BIS Shrapnel. “Full-time work has come back a bit, but most jobs are for part-time workers.”

He explains that, since of the start of the financial crisis, most companies haven’t sacked people but have cut their hours or shifts, creating a so-called pool of “hidden unemployment” – also known as underemployment, where people have jobs but want more hours.

“Average hours worked are down on previous measures, so even if there is a pick-up in economic growth, this won’t quickly translate into a lot of new jobs,” Robinson says. “Employers will start by giving existing employees more work.”

Social researcher Mark McCrindle adds that today’s 5.8 per cent “seems like 6.4 per cent” because of the “massive” shift from full time to part-time employment that has been continuing since the 1990s.

“We have an ‘underemployment’ rate of 6 per cent. That is, while at least one in 20 people are unemployed, there are just as many who have some work but want more,” McCrindle says.

“The retail sector is a classic example of this. There were more people employed in full-time retail three decades ago than there are now, even though the size of the labour market has more than doubled. The point is, we’re not adding full-time staff to certain sectors.”

Locked out

This means that long-term unemployed will stay unemployed, and new workers entering the workforce will find it tough going cracking their first job in 2014.

Some parts of the economy remain in trouble, and every industry is feeling the pinch, wherever people can do the work by themselves, or technology can take over – everything from the self-service checkouts at supermarkets to citizen journalism taking the role of traditional media in filling content.

Some old problems haven’t gone away. “Youth unemployment is in double digits, up to one in five in certain parts,” says McCrindle.

And there will be a range of older people who, if they lose their jobs are at risk as they may not have skills to change industries – particularly in the manufacturing sector, which has dropped from employing 1.1 million workers back in February 2010 to around 940,000.

That’s the bad news.

Job shift

The good news is that it won’t get a whole lot worse. “The economy’s not going to collapse. Exports are strong and the domestic economy is picking up,” says Robinson.

And the better news is that there will be jobs, just not nearly as many in high-paying mining-related activities, as workers who have been setting up new mines find that work dries up.

“It will be interesting to see if these workers can move back into building homes and tall buildings,” he says

Recruiters are sounding positive, too. “We are seeing people in jobs looking for new roles, and that’s a sign of confidence in private enterprise,” says Peter Noblet from Hays.

Noblet suggests this will flow through to companies working hard to retain staff by offering extras such as training and a more attractive workplace.

He also says his firm is fielding a fair bit of growth in the banking market, one of the country’s biggest industry sectors. “We’re seeing jobs at the highest levels in 24 months, mainly centred in Sydney and Melbourne, particularly in insurance, as the big banks move into that sector, and in financial planning.”

Hot spots

The move to social media has an upside as well, says McCrindle.

“Technology takes jobs, but also creates jobs. There are roles in new areas, as more people are needed in the visual and digital sectors, with video based content and infographics, and one in five people are working from home.”

McCrindle also points to the emergence of completely new high-tech industries, such as the coming of 3D printing, needing high-level programming skills, and the rise of personal drones.

Outside of technology, there are other jobs being created.

“Demographics mean that there is a growing, ageing population, and it’ll be a younger, richer generation of retirees,” he said. “We have had a record baby boom in the past year, so there will be opportunities for work in services like childcare,” McCrindle says.

There will be also be global opportunities – after tourism, education is our third biggest foreign money-earning sector.

Strong states

Looking at state-based opportunities, Robinson suggests that the next push for economic activity will come from building, so there will be “pockets of strength” in states with an under-supply of housing: NSW, Queensland and WA.

“NSW has much better prospects that people realise,” he says. “It won’t be strong, but could be above average.”

“Queensland, coming off a low base, looks like it’s picking up, and will benefit from having a higher population growth,” says Robinson.

“The mining sector, while it might be pulling back in activity, is still strong, and WA’s population is still increasing, so there will still be demand for housing and household services,” adds McCrindle.

Rules and regulations

The big workplace reforms that grabbed the headlines in 2013, such as the paid maternity leave championed by Prime Minister Abbott, have not yet been passed by Parliament.

What have kicked in are new national laws on two important areas affecting Australian workers.

From January 1, if you have not chosen a super fund, your employer must pay your compulsory super into a fund that offers “MySuper”– and the majority of large industry super funds and wealth managers such as BT, AMP, OnePath, MLC and Colonial First State all have this option.

MySuper funds have lower fees and charges, no commissions, a fixed investment strategy and, most importantly, automatic cover for death and total and permanent disability (TPD).

And from 1 January, the Fair Work Commission will be allowed to deal with workplace bullying complaints. Under these new laws, employees and independent contractors who have been bullied at work can apply to the Commission for an order to stop the bullying.

Future proof your career

Tips from Mark McCrindle and Peter Noblet:

1. Observe the trends: we’re part of a global economy, so if technology is reducing prospects in other comparable countries, like the US, Britain or Canada, it’ll happen here. So look at moving to an area that’s not a dead end.

2. Training is key for employability – the secret is remaining ever-relevant, whether than means keeping up to date on new technology

3. Flexibility – the better able you can make changes, the better you can keep up with fast moving times, rather than sticking to the way you’ve always done things.

4. Be entrepreneurial, even if you don’t own the business, you can “own” an area of your work. For example, some of the most effective changes made by Toyota have been suggested by workers on its assembly lines.

5. Trades and labour wanted: Demand will also rise for quality trades and labour staff in the construction industry, since the property market is buoyant with house renovations and new house builds.

6. Be realistic in your salary expectations – we are seeing a lot of flexibility from employers too, who are recruiting not just on technical skills but on aptitude.

7. Find a mentor you can trust to work with for your chosen career path, or even to move outside your current industry.

8. Use social media, and be aware of your personal brand online.

Bernard Kellerman is an independent finance writer, bank-watcher and ex-accountant.