The Real Reason You Can’t Find Talent and How Executive Search Can Help You
In 2006 1st Executive published a research study, “The Great Divide – Australians Attitudes to Work”. In the desk research for that project, we reviewed elements of a 2005 Federal Government Research Study by the Productivity Commission, “The Economic Implications of an Ageing Australia”. We lifted the following chart from the study which showed a rapid growth in the penetration of retirement age Australians in the population. This is reproduced below.
On page 106 of the Productivity Commission report, there is a graph showing the impact of this on worker numbers (people aged 15 to 64) – (see below). On the projections back then, by around 2022 the curve of growth in worker numbers hits zero. That means zero net new entrants to the Australian workforce. I can recall being asked at press briefings how I could possibly know that. I was able to qualify this with an assumption that immigration rates would remain about the same and then I could confidently say “because they have already been born”.
Fast forward to 2020. The Covid 19 pandemic hit the globe and one of the most immediate implications was that the net movement of airline passengers fell to all time lows, in effect placing what appears to be at least a two year pause on immigration. When you add to this:
- Only a very small proportion of Australians based overseas who wish to return home currently are actually able to get home
- There are thousands of pre-approved temporary regional skilled Visa workers who are still overseas and in limbo
then it’s not hard to conclude that this forecast labour shortage is hitting us now. Covid 19 has brought this crisis forward by at least two years and is likely to extend it.
While there are still pockets of underemployment, what has been noticeable about the recent job surge is that as Australia tries to fight its way out of the economic consequences of Covid 19, full-time, rather than part-time jobs are leading the way.
Structurally, as the country vaccinates and hopefully moves beyond lockdowns, this shortage is the single biggest threat to economic prosperity without substantial gains in productivity.
The Executive Search and recruitment industries are currently awash with job briefs in a candidate short market. In many ways, the executive search sector is more likely to navigate the shortage successfully than general recruiters. First of all, they are typically working at a more senior level and most contact is discrete rather than advertised. There are always senior executives who are looking for the next step in their career, or can be persuaded to look, and executive search techniques are designed to optimise outcomes in such circumstances.
General recruiters however have a bigger challenge as there has been a rapid decline in availability of talent with 2 to 5 years experience over the last five years. Add to this, the fact that many people in this cohort are reluctant to change jobs at times of economic uncertainty and that we effectively have zero net migration into the country, we can see why employers are facing a real challenge.
Recruiters who are able to apply elements of executive search techniques will more than likely provide positive outcomes for their clients This assumes that they have clients who are prepared to listen to the advice that they receive, and are open to progressing a high-quality shortlist of one or two candidates to a job offer quickly.
Executive search and recruitment consultants are well-placed to support industries feeling the pinch of talent shortages. Typically, they have experience of candidates they have placed in the past, have a database of people who have provided indications of when they will be seeking to change roles and are capable of operating in the blue ocean of direct contact rather than the red ocean of job board ads.
It’s fair to say that the resilience of the Australian economy was probably underestimated 15 months ago when unemployment was tipped to hit 15%. However, now that we are in a jobs driven recovery, albeit interrupted, a comment by the Minister for Employment and Workplace Relations in 2006, Kevin Andrews that “It is true to say that Australia’s demography is its destiny” has never rung more true