At the end of each year at FlexCareers’ virtual headquarters, we do our best to read the tea leaves and anticipate how the job market will evolve in the coming year.
I thought 2020 would be centered around new and more flexible ways of working to enable a ‘more humane’ professional experience for those with families or at different stages of life, but COVID (who knew!!), while my predictions for 2021 were very close, seeing an increase In demand for labor from employers looking to get out of the pandemic.
This past year has just seen the most unbalanced and, in some cases, dysfunctional job market we’ve ever seen. Large employers, in particular, were desperate to hire, and shareholders pressured them to make their way out of the COVID-induced slump, and by changing customer buying preferences accelerating the digital transformation of their organizations.
And while the dual pressures from shareholders and customers aren’t going away any time soon, the difference maker for the Australian job market is to roll out the vaccine we saw in the fourth quarter (finally!!!), paving the way for a different job market in 2022.
Labor shortages at the macro level, and skills shortages in job families in particular, will be the number one risk for businesses in 2022. We will start the year with unemployment below 5%. Since the end of the 1.0 close, we have absorbed any slack that was in the filter market. Whether you are looking for workers in technology, infrastructure or hospitality, securing them has proven to be more difficult. Combined with net outflows of 300,000 foreign workers emigration and persistently closing borders, everyone is scrambling to find more people.
The guesswork lies in the impact of reopening borders, when it will happen – and how quickly it will affect. I expect immigrants to return, but I also expect many Australians to travel to London, New York and other destinations preferred by generations before them. The net effect on skilled labor is the number to watch.
The Great Talent Exodus.
Despite a 3-6 month delay compared to the US and European markets, I expect huge numbers of people interviewing for new jobs once the job market reopens after Australia Day, with many of these candidates switching roles as of March. While we have all had the opportunity to transition into 2021, we may not have had the confidence to take risks and move jobs due to the lasting and unpredictable effects of COVID on the economy. What has changed now is that the vaccine roll has finally arrived.
This great migration of talent should be seen as both a threat and an opportunity: Those companies that get the employer branding right, hone their EVP value and remove friction from the applicant experience, can use the mass conversion event to set themselves up for success for years of Yes come.
Massive hiring requires survival — or even growth.
After a year of hiring freezes in 2020, 2021 saw the market look to an increased workforce as a way to broaden its way out of the COVID slump. With stock markets at or near all-time highs, pressure will continue to come from shareholders to continue increasing profits and improving digital customer experiences.
FlexCareers numbers show that the job market in 2021 is running at about twice its normal speed. I see a compelling argument that the market would remain at these high levels, if not for increased demand for employment.
The arms race for the employer’s brand.
There are two factors driving this:
First, an employer brand is nothing more than a “promise of what you will experience when you join us.” Within that, there will always be a balance between an ambitious vision and the reality of lived experience. When the living, breathing reality of employee experience veers away from the promise, the brand needs to catch up.
And second, in a zealous white job market, with more roles than candidates, employers need to do everything they can to stand out in a crowded market. What makes you so special for a candidate now, when that candidate already submits another 2-3 job offers in addition to yours?
The way we work has changed. Employers’ desperation for employment has also occurred. Our employer brands, as well as our Executive Vice President, need to catch up. As we head into 2022, we expect to see massive investment in employer branding as employers look to articulate ‘what makes us different’.
L&D became the most attractive job title in mid-2020.
Distracted by the noise surrounding COVID, 2022 is the year when bottom-up workforce strategic planning collides with top-down market analysis for workforce skills. As all companies become technology companies, we are about to get the rude shock of not having enough data scientists, cloud specialists or cybersecurity experts to meet the future requirements.
If there are three ways to obtain human skills in any business using the borrow/buy/build trilogy, the first is expensive and the second is limited. In 2022, we will see reskilling the workforce as the only sustainable and scalable way to ensure our businesses have the skills to enable a digital future. We’re going to make a great investment in L&D and we’ll see L&D as the most attractive job title in mid-2020.
Sorry, data scientists.
Years of learning the hybrid correctly.
The beginning of this year has just ended with many employers doing the work to determine the future of their work. The outcome often looked like “2 and 3” (days at home/days in the office) with some gradual roll-out throughout the year, “until we hit the new normal”.
Then Delta happened.
With Sydney 2.0 closed and Melbourne losing count, those plans have been put on hold – returning first to the office isn’t a race many want to win. 2022 will be the year we learn to live with COVID in a sustainable way. We will invest in the capabilities of our leaders to lead in a hybrid way. We will work more with our teams to enable them to self-organize in a way that “works” with the team, work and customers. We will double our efforts at wellness. And we’ll admit that hybrid work takes time to get right – it’s not quite as simple as “2 and 3”.
Benefiting from underutilized labor pools – the rise of return to work.
With the constant shortage of talent, we will begin to ask the question “Where can we find ELSE people?”
Enter back to parental work. With 350,000 babies born each year, there is a deep and purposeful supply of labor looking to return to the job market each year. While they may need a slightly different level of post-employment support, employers willing to invest in the return of their careers will be rewarded with rich experience, skills, and loyalty.
We are already seeing a large number of large employers queuing up programs that are similar to graduate intakes for this group of employees, and we expect to see more in 2022.
Candidate remorse and apostate employee.
The great talent drain will be real. Over the past eighteen months, we’ve had very little control over our lives – and from an individual’s point of view, deciding who we work for is one of the few decisions we’ve fully gained.
But many of us will realize that the grass is not greener anywhere else – we may end up regretting our decision to leave and longing for the good old days.
Smart employers will leave room for bouncing employees back. They will invest in the exit experience – whether it is to make the person stay, or to leave a positive and lasting experience – in addition to their alumni programs. The labor shortage is not going away any time soon. In 2022, it will give the best employers who quit their job a good reason to come back.
Find out more about FlexCareers’ recruitment and employer branding solutions, or reach out to me for a chat.