Q2 2019 | Employment And Economic Trends2019-05-23T20:05:50+00:00

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Talking Talent Leadership Profile

A Q&A with GUY BRYANT-FENN of PeopleScout
APAC Managing Director

By NICOLE FUQUA
Trend Writer

Guy Bryant-Fenn doesn’t like to sit still. In the two decades he’s worked in HR, he’s grown from an IT search role to PeopleScout’s APAC managing director, transplanting from London to Sydney along the way. This global experience has given him a future-focused point of view and humility – a value he says drives honesty, integrity, ambition and tenacity.

We spoke with Guy from PeopleScout’s Sydney headquarters about the biggest issues in the Australia and New Zealand talent market and how they are shaping the talent acquisition industry. In our conversation, Guy shares how the lessons from innovation in APAC should influence leaders around the world.

What are the Biggest Challenges Facing the Australia/New Zealand Region in Talent Acquisition Right Now?

That’s a great question. There are numerous challenges facing Australia, New Zealand and the broader APAC market in talent acquisition at present. First off is the availability of talent. It really is a compressed market here. We’re seeing a lot of employment growth in the healthcare and social assistance market, construction, education and training, and professional. As we look forward to 2023, we’re seeing projected growth of half a million jobs or more, and the challenge that lies within that is the availability of skilled labor to fulfill those roles.

What are Some of the Biggest Trends that You’re Seeing?

The biggest trends that I think we’re seeing are a reaction to the availability of talent. So, we’re seeing a high degree of recruitment solutions that are focusing on passive sourcing – not those active candidates in the market, but those left-handed astronauts out there that we need to tap on the shoulder and attract into our clients’ organizations. We’re seeing a keen focus on market insights to provide the information of where that skilled labor is, who they are working for and how we can best attract them. That is done by a symbiotic relationship between people and technology, which means using advanced AI technology and attraction strategies that are enabling the people components to drive that passive sourcing.

Another big focus is diversity and inclusion. Organizations obviously see the benefit of diversity within their companies, and they want to ensure that they have a workforce that is reflective of the national demographic. So, they’re trying to balance the lack of availability of talent within the market but also drive a more inclusive workforce.

The final piece for me is really a greater focus on attraction and assessment. Organizations are wanting to understand the perception of what they are saying to the market. How does their employer brand portray them as an organization? What are the values that they are speaking to within the market, and how do those values really flow through to how and who and what they are assessing within the recruitment process?

It Sounds like in Dealing with these Challenges and Working with these Trends, Technology Plays a Significant Role. So, Can You Tell Me a Little Bit About the Role that Tech has in Transforming the Industry and Tackling the Biggest Issues You’re Seeing Now?

Tech is increasing in importance across the industry. We’re seeing an emergence within the HR tech industry of technologies that sit across each element of the lifecycle. So, that includes workforce planning tools, AI passive sourcing tools, various different assessment tools from personality profiles to realistic job previews, situational judgment – and they go all the way through to onboarding and employment. The trick for us as a provider is to ensure that we are utilizing the best of those tools that will enable the recruitment process, but also drive automation and efficiencies that allow us to elevate our talent acquisition teams to act as more of a business partner or in an advisory capacity.

What are some Lessons from Australia/New Zealand that Leaders in Other Markets Should Be Paying Attention to and Learning From?

I’ve lived and worked in Australia for eight years, having come from the EMEA market. What I continuously enjoy is the lateral thinking of talent acquisition leaders across Australia and New Zealand. We are not afraid to look at things through a different lens and take the best of the learnings from the Americas and EMEA and rightsize that for the Australia/New Zealand and broader APAC market.

We are also seeing a faster adoption and emergence of total workforce solutions, in which providers have a view of both permanent and contingent labor across their enterprise. That’s partly because of lateral thinking, but it’s also because we are smaller in scale and can be more agile, which allows us to innovate quickly.

What are You Most Excited About for the Future of Talent Acquisition?

We touched on it in pockets throughout this conversation – the advancement of technology is an exciting component. I firmly believe that there will always be a human element in what we do, but how can we continue to create that symbiotic relationship between people and technology to really evolve and advance our solutions?

An example of that for me is evolving the planning element of what we do from a data and insights perspective. Right now, organizations are working on their resource forecasts driven by a demand plan. Where we will see this evolving is in true workforce planning – future-backed workforce planning, in which organizations will be able to predict the resources that they need, one, two, three years out. We will also see the emergence of workforce planning components flowing across the whole recruitment lifecycle, and it will enable us, as a business, to ensure that we are driving those passive candidate pipelines.

We are setting ourselves up across both our attraction and assessment strategies to really enable our clients’ business objectives. We want to ensure that we are executing talent at a strategic level and acting as a true business enabler for our clients’ organizations. What I’m most excited about is really the elevation of talent acquisition, and it can’t happen quickly enough.

Listen to the companion podcast, “Applying Global Lessons in Talent Acquisition,” at peoplescout.com

Recruitment for Retention

By DAVID BAROL
Research Director

“Where do you see yourself in five years?” It is perhaps the most time-worn question in a job interview. The candidate may answer that, if they are hired, they will be happily working in your organization. But the odds are against this ever happening. Why? Workers in the U.S. remain in one job for just 4.2 years on average, and in other leading economies, the average single job tenure can be similarly brief. In the UK, workers change jobs every five years, while in Australia, the national average job tenure is just three years and four months. In Canada, the average length is 8.5 years, but the averages vary widely depending on the industry.

For those hoping to attract and retain top talent, these figures can be familiar – and a cause for concern. When human resource professionals look inside their organizations and identify employees who have defied the statistical average, staying with the company far longer than five years and contributing significantly to its success, they wonder, “how do I get more of them?” With low unemployment making many job markets the most challenging in recent memory, there is genuine urgency not only to retain the best talent, but also to find a way to attract talent that will stay with an organization for the long term. In other words, there is a need to recruit to retain, but how?

Know Your Talent: Why They Leave and Why They Stay and Thrive

Like many organizations, your company may already have an employee retention program in place. Enterprises are making considerable efforts to retain talent, and the processes they deploy to improve employee retention can also be incorporated into your recruitment process.

For example, it is relatively common to have exit interviews with departing workers to better understand why they are leaving the organization. When a sufficient number of exit interview results are available and evaluated, trends can emerge that can lead to actionable items to improve employee retention. Certain common traits or characteristics may also appear among those who voluntarily leave their jobs.

Less common, but potentially just as valuable, is the “stay interview.” These interviews with current employees allow them to express their concerns before they are in a position to leave, which can help leaders address issues and take steps to retain top talent.

And, just as exit interviews can bring into focus the characteristics of those who quit, the stay interview can help identify the traits of those who remain and thrive. Once a group of long-term, successful employees is identified, a stay interview can be designed for this group with the goal of identifying why they have remained with the company, what factors have contributed to their success and what characteristics many or most of them have in common. Identifying these characteristics in your candidate pool during the recruiting process could be an indicator of future success.

In today’s tight job market, if you are not working to identify candidates with the characteristics that have been proven to lead to long-term achievement in your company, your competitors probably are. SHRM reports “Many organizations are seeking more of a ‘whole person’ gauge of candidates, experts say, assessing not just skills or intellectual horsepower, but also personality traits, cultural fit and motivational drivers that can prove the difference between candidates who thrive over the long run and those who quickly derail.”

Predictive Analytics: Unlocking the Key to Recruitment for Retention

Predictive analytics is a type of data analytics that uses data to find patterns. Then those models attempt to predict the future. Traditionally, HR analytics has been descriptive, analyzing employee data across different departments and demographics to identify historical patterns in key turnover and retention metrics. This data is then used to formulate talent retention programs. However, descriptive analytics is limited, and cannot predict future outcomes at an individual employee level.

Predictive analytics, however, can help predict the future by leveraging the data from descriptive analytics as inputs for predictive statistical modeling. Some of the most commonly used employee information for turnover-focused predictive modeling include:

  • Tenure or duration of employment
  • Compensation level or ratio
  • Date of, or time since, last promotion
  • Percentage of most recent pay raise
  • Job performance score
  • Commute distance
  • Job satisfaction score
  • Number of previous positions held
  • Years with current manager
  • Engagement score

Organizations also use external data, such as labor market and economic trends, as causative variables while formulating predictive models for retention. HR teams and managers can use the findings from predictive modeling to better design timely interventions to help retain employees.

These data points alone may not provide insight into why a single employee joined your organization and why they left. But, if this information was aggregated for all of your employees, both past and present, there are a few insights that could be determined:

  • Is there a correlation between how an employee is sourced and their tenure at the organization?
  • Do employees who live far from the workplace quit sooner than those who do not?
  • Are there previous industries that produce more long-term employees than others?

The information found in even one of these examples could be built into your recruitment strategy and have a meaningful impact on recruiting talent that will remain with your organization.

For example, a PeopleScout client uses data and predictive models to assess turnover trends. The client uses employee demographic information, such as age, tenure and their previous employer, to predict when an employee might resign based on historical trends and patterns of similar employees.

Equipped with this data, the client is better positioned to prevent valuable employees from resigning by taking preemptive actions during periods or junctures when the employee is most likely to resign.

RECRUITMENT FOR RETENTION

Key Takeaways

  • Effective employee retention begins with the recruitment process.
  • Incorporate the tools and insight from your retention efforts into your recruitment program.
  • Leverage the valuable data you have by using the right tool for predictive analytics.

Rethinking Work: Providing Flexibility in the Workplace

By HEATHER DELAND
Executive Creative Director

Checking the status of an important project while waiting to catch a flight. Replying to a coworker’s email from the comfort of your favorite cafe. Shifting your hours to make time to take an aging parent to a doctor’s visit. Each of these scenarios has one thing in common – they are made possible through flexibility in the workplace.

Flexible work arrangements are surging in popularity. In the U.S., 94% of employers provide some form of flexible work arrangement, according to a survey conducted by the International Foundation of Employee Benefit Plans. The Institute of Leadership and Management found that 94% of UK organizations offer staff some form of workforce flexibility and 73% of managers say their organization is largely supportive of it. A survey conducted by Regus revealed that 54% of global respondents now report that they work remotely 2.5 days per week or more.

You may be wondering, what’s behind the surge in popularity for flexible workplaces? Well, the data speaks for itself. Global Workplace Analytics noted the following:

  • AT&T found that its remote workers worked five more hours per week than its office workers.
  • American Express’ flexible workforce had a 43% higher productivity level than its traditional counterparts.

In this article, we’ll cover what workplace flexibility means, why you should consider bringing more flexibility to your workplace and how you can best manage the challenges and opportunities presented by a flexible workforce.

So, What Does Workplace Flexibility Mean and Why Should I Care?

Workplace flexibility is an alternative to traditional workplace models that dictate when and where workers perform their work. Workplace flexibility permits employees to choose when, where and how they work.

Flexibility in the workplace shouldn’t be seen as just a perk you offer to employees; it should be viewed as a critical part of your organization’s talent acquisition strategy – and as a fundamental way to increase productivity.

Employer Benefits in a Flexible Workplace

A Broader Talent Pool
When your workplace culture allows talent to work from anywhere, your talent pool instantly becomes global. Your organization can source and recruit talent across the country or across the globe. With the rise of communication tools such as Skype and Slack, secure intranets and video conferencing, distance is becoming less of a hurdle to collaborating with talent globally.

Improved Employer Branding
According to a study conducted by CareerArc, 96% of companies believe employer brand and reputation can positively or negatively impact revenue. Offering flexible workplace policies communicates to potential employees that your organization is committed to helping its employees achieve a better work-life balance, which, in turn, can help improve jobseekers’ perception of you as an employer and positively impact your bottom line.

Cost Savings
The most prosaic benefit to flexibility in the workplace is cost savings. Costs on business necessities such as office supplies, real estate and utilities are reduced when your organization provides employees the ability to work off-site.

Employee Benefits in a Flexible Workplace

Meet Personal Obligations
Employees have a variety of personal obligations and family responsibilities. If you provide them with a flexible workplace, they can make that important parent-teacher conference during the day, go back to school or simply be home when the repair person comes to fix the dishwasher, all without having to neglect work in favor of personal responsibilities. If you trust people to get their work done in a way that works for them, that trust is usually rewarded.

Employee Empowerment
Flexible workplaces can give employees an increased feeling of personal control over their schedule and work environment. By allowing employees to set their own style for delivery, you appeal to the entrepreneurial spirit — which can be good for your employees’ sense of self-determination.

Reduced Commuting Time and Costs
For some employees, commutes of more than an hour each way are not uncommon. If employees are allowed to work from home it can potentially save them 10 hours of time, untold money in fuel costs and wear and tear on the road – not to mention the effect on well-being.

Types of Flexibility in the Workplace

Job Sharing
In a job share arrangement, one role gains two brains – two people with passion and creativity who are committed to success.

There are a number of ways employees in a job-sharing arrangement can manage their responsibilities. Some employees sharing a role may segment the work by each taking responsibility for specific deliverables and tasks charged to them.

Others may split the same workload, with one employee working on projects and passing along their work to their job share partner while they are off the clock. The model you and your employees choose will depend on the nature of the work performed and what preferences and skills each employee possess.

At our PeopleScout EMEA headquarters in London, we had the luxury of employing two wonderfully talented women in our Head of Assessment role. This role wasn’t initially designed to be a job share. However, after our incumbent in the role wanted to reduce her time in office after becoming a mom, another talented colleague stepped up to support the team.

As both women began building their families and took on the challenges of motherhood, their ability to provide 100% to the role was never compromised; when one needed to take a step back, the other was always there to pick up where she left off.

By providing the flexibility our employees needed to share this role, we retained two of our brightest minds. And, more important, we let our employees know that you should never have to choose between being a parent and being a professional; you can do both equally well with the right support.

Remote Work
Remote work is when an employee works primarily from home or an off-site location. A well-planned remote work program can help your organization increase overall productivity and promote greater job satisfaction among your teams. It may even help you in improving your employee retention efforts.

In our London office, we did not always see remote work as an employee perk; rather, we viewed it as a practical business decision to reduce office expenses. We began our intrepid adventure into remote work by hot-desking — the practice of multiple workers using a single work station — our client services team.

What began as a business experiment quickly paid unexpected dividends. When our client service team members didn’t feel the need to stay affixed to their desks, something marvelous happened — they became more engaged with clients, which, in turn, brought in more business for PeopleScout.

We were not entirely sure what to expect when we initially opened up our organization to become more flexible. However, after witnessing the success of our remote work program, one thing was clear: flexibility was a business asset, not a hindrance to productivity.

Flexible Scheduling
Flexible scheduling allows an employee to work hours that differ from the traditional company start and stop time.

According to data compiled by The Economist, working fewer hours correlates with higher levels of productivity. Nations like Greece average 2,000 work hours a year, while nations like Germany average around 1,400, but yield 70% more productivity at work. This suggests that fixed schedules and mandatory hours may not be the key to getting the most out of your employees.

Typically, a flexible schedule involves either a compressed work week or flexible starting and stopping times. In a compressed work week, the most common schedule is a four-day work week where employees work four 10-hour days. Variations on this schedule could include three 12-hour work days, and so on. This scheduling flexibility allows employees to have an additional day or two to relax, spend time with family and friends, or pursue activities and causes that interest them.

At our London offices, we encourage our colleagues to take full advantage of our flexible scheduling options. For example, we had a colleague who wanted to leave work a half-hour early once a week to attend choir practice. We not only supported them by allowing them to flex the hours, but we also couldn’t help wondering if they’d like to invite their coworkers to the performance. As it turns out, they were happy to have some new people for the audience, and many members of their team showed up to cheer them on.

By promoting and supporting our colleagues’ interests and encouraging others to do the same, we are communicating that we see our workers as whole people and that their personal achievements are just as important to everyone at PeopleScout as their professional ones.

When your employees feel you appreciate them for more than what they can contribute to your bottom line, and that you appreciate what they contribute to their community as a whole, you help engender a familial office atmosphere where employees feel both empowered and respected.

Managing Flexibility in the Workplace

Stay in Compliance
Before your organization begins offering your employees flexible work opportunities, you need to make sure your program won’t become a legal headache. Issues to consider include workers’ compensation and local/national overtime regulations, as well as matters of individual responsibility for company property used off-site. Your organization’s legal counsel should review any flexible work program proposals to make sure you stay in compliance with your country’s employment laws and the regions your organization operates in.

Stay Connected
It is extremely important to stay connected with employees in flexible work arrangements. Make sure that your managers and in-office employees remember to include remote employees and support them to feel like they’re part of the team. While conference calls and email chains are effective means of communicating with remote workers, nothing substitutes being in the same room. Leverage videoconferencing technology, such as Skype or FaceTime, to bring more of a face-to-face feel for remote employees in important meetings.

Be Fair
A major key to managing a successful flexible workplace is ensuring that employees who opt for more traditional work arrangements are treated as equitably as their non-traditional coworkers. When you treat your employees fairly, they feel respected, cared for and may develop a stronger sense of trust in your organization. Make sure to monitor your flexible workplace policy and periodically tweak it to address new or unforeseen inconsistencies in the treatment of workers in traditional and non-traditional work arrangements.

In Summary

To reap the benefits of flexibility in the workplace, you need to continuously evaluate your flexible work program and monitor which employees use it and how the program is being used. Take note of any challenges that participants and managers are experiencing.

Routinely speak with both participating employees and managers to see if your program is working as intended, how it can be improved and what their individual experiences are while using the program. Assess their satisfaction with the program and tweak it as necessary.

Remember, as employers, we hire whole people. We need to take them as a package: both the things that directly benefit our organizations and the things we may need to do to accommodate for them.

RETHINKING WORK: PROVIDING FLEXIBILITY IN THE WORKPLACE

Key Takeaways

  • For alternative work arrangements to succeed, your organization needs to create or foster a company-wide culture of flexibility. This entails buy-in from all stakeholders, trust in your employees, corporate transparency and the championing of individual responsibility for one’s work.
  • Emphasize to employees that the ability to use flexibility is a privilege — depending on the role — and they will be treated fairly.

Global Economic Snapshot: April 2019

By DAVID BAROL
Research Director

The strong job growth and tight labor markets that characterized most of the world’s leading economies in 2018 continued in the first quarter of 2019. And, while the overall economic headlines have been positive, employers have been challenged by record-high job openings, rising wages and uncertainty over trade. For many economies, 2019 got off to a strong start, but the outlook for the remainder of the year is uncertain.

Low Unemployment: the Diminishing Available Talent Pool

The United States ended the first quarter with an unemployment rate of just 3.8%. While the partial government shutdown may have impacted the negligible job growth in February, the economy still added an average of 180,000 jobs per month in the first quarter. This is robust job growth by any measure, but it is smaller than the 223,000 jobs created per month in 2018. These numbers suggest that job growth is still strong, but the pace of job creation is slowing.

U.S. employers posted nearly 7.6 million open jobs at the start of the year, a near-record high and a sign that businesses are continuing to compete for a diminishing pool of available talent. In March, it was estimated that there were about 1 million more open jobs than unemployed workers.

In contrast to its North American neighbor, Canada’s employment situation was mixed. The first quarter ended with an unemployment rate of 5.8%. But, after two strong months of job gains, Canada lost jobs in March.

In Europe, many leading economies posted strong job gains and low unemployment. In the UK, the March Labour Market Report showed that a greater percentage of people in the UK were working than at any time since comparable records were kept. As a result, the unemployment rate in the UK plunged to 3.9%, the lowest rate since 1975. For other major European economies, the unemployment situation was mixed. The Eurozone’s unemployment rate was 7.8%, slightly lower than at the end of 2018. France posted an unemployment rate of 8.8% during the quarter, while Germany recorded its unemployment at a very low rate of 3.3%.

In the Asia-Pacific region, unemployment continued to be negligible in the leading Asian economies. During the first quarter, China reported an unemployment rate of 3.8%, Japan was at 2.3%, Hong Kong at 2.8% and South Korea at 4.7%. India’s unemployment rate of 6.7% was slightly higher than a year earlier.

Other APAC economies posted strong employment numbers. Australian unemployment fell to 4.9%, the lowest level in eight years, and New Zealand reported that the unemployment rate had risen to 4.3% in the final quarter of last year.

Low unemployment has led employers to compete for a diminishing pool of available talent, and has made it even more necessary to retain workers who may be lured by competitors offering higher wages and other incentives.

Wages Rising. But, Inflation Remains Low

The conventional wisdom holds that wages rise when the supply of workers is low. Yet, wage increases have grown very gradually even in economies with very low unemployment. One of the reasons for this is that inflation rates in many advanced economies are quite low, so even modest wage increases can have a positive impact on a household’s ability to spend and save. In some economies, wages began to rise significantly in 2018 and continued in 2019. In the U.S., annual wage increases rose to 3.4% in February before contracting slightly to 3.2% in March. Coupled with an inflation rate of just 1.5%, wage increases in the U.S. are growing more than two times as much as the price of goods and services. In the UK, the annual wage increase of 3.4% was still well above the inflation rate of 1.9%

In two other major economies, the wage growth picture is not as positive. Canada was posting year-over-year wage growth of more than 3% in mid-2018. But, by March 2019, the average year-over-year wage growth for permanent employees was just 2.3%. While Canada’s inflation rate was 1.5%, the same as in the U.S., Canadian workers benefited less from their wage increases than their U.S. counterparts.

In Australia, wage growth was just 2.3% in 2018, and some estimate that Australians are experiencing their lowest increase in pay since World War II. With inflation running at 1.8%, workers are still coming out ahead, but not as much as in the U.S. or UK. The reasons for the difference in wage growth among these four Anglosphere economies are rooted in the structures of the individual economies. Slow wage growth has contributed to low inflation in each country. But, as wages rise, so does the possibility of an increase in inflation. If inflation increases, there would be an even greater incentive for workers to change jobs to increase their income and for employers to respond by offering higher wages.

High Anxiety – Trade and Jobs

In North America, NAFTA, the agreement that has tied the economies of Canada, the United States and Mexico, was set to be replaced by the new USMCA treaty. The treaty was signed by the heads of all three countries late last year, but it has not yet been ratified by any of their respective legislatures. The uncertainty due to the lack of clear tariff regimes in the near future may cause considerable disruption in different sectors in each economy. In the U.S., manufacturing, a sector that may be most impacted by North American trade, lost jobs in March for the first time since 2017.

But, any concerns in North America pale in comparison to anxiety over Brexit. As of the time of publication, the UK is set to leave the European Union on October 31, 2019. There remains a possibility that the UK will exit the EU without any agreement and possibly experience economic chaos.

If and when Brexit occurs, it has already had an impact on the UK workforce, especially in the area of foreign workers. The Guardian reports:

“There were an estimated 2.33 million workers from the EU27 in the UK between October to December in 2017, but that figure dropped to 2.27 million a year later. A notable drop in workers from A8 countries, which joined the bloc in 2004 and include Poland and the Czech Republic, largely accounted for the decrease.

“It contrasted with an increase in the number of non-EU workers in the UK, rising from 1.16 million to 1.29 million in the same period. This was an increase of 130,000 compared with the equivalent period 12 months earlier, and the highest number since records began in 1997.”

Given the importance of workers from the EU in sectors such as healthcare, hospitality and meat-packing, a continued exodus of workers from the EU will have a major impact on key UK industries.

With so much concern about the economic future, why have the job numbers in the UK been so positive? While it may simply be a matter of filling the demand employers have for talent, Bloomberg suggests a more somber reason:

“One explanation for the resilience of the labor market is that firms are hiring workers rather than spending on capital equipment because employment decisions are easier to reverse in a downturn.”

In other words, newly hired workers are more expendable in an economic downturn than capital equipment, a sobering thought for both employers and workers during these uncertain times.

GLOBAL ECONOMIC SNAPSHOT: APRIL 2019

Key Takeaways

  • The competition for talent remains fierce in most advanced economies. Enterprises that can successfully retain and attract talent have a distinct advantage in the current economy.
  • Wage growth is accelerating in some economies and stalling in others. Employers need to understand wage pressures within their own industries and the economy as a whole.
  • Brexit and other trade agreements have not yet adversely impacted the job market or the economic health of major economies. This situation can change rapidly if a development to current trade relations comes into effect.

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