How businesses can make the most of an unusual job market

Despite record unemployment, new hiring trends from Workday suggest Australian companies have a once-in-a-decade opportunity to revitalise their workforces with top talent.

Each year, Workday processes millions of job-related data points from the companies that use our recruiting tools. For the first time in Australia, we’re making public the trends revealed by this anonymised data. The 2023 data tells us that Australia’s job market is in the midst of a rare situation.

When unemployment is low, economists expect increased competition for talent. According to conventional wisdom, with fewer people actively looking for jobs, employers find it more challenging to fill vacancies and may even need to offer higher wages to attract employees.

As anyone looking for work will tell you – this is not what’s happening.

In fact, more Australian job applicants are fighting for fewer open positions. On average, compared with the previous year, the 2023 Workday trend data shows a 25% decrease in job requisitions, a 30% increase in applications, and an 11% decrease in job offers.

Why? Because headcount growth has slowed. The Australian Government’s Recruitment Experiences and Outlook Survey says the proportion of employers expecting to increase their employee numbers in the next quarter has dropped. The data points to the fact that it’s a hirer’s market. Sources say talent mobility is static or has dropped in the past 12 months. The average length of service for most roles is longer than it’s been for years.

In this environment, smart businesses are seizing the opportunity to hire top talent and move to a high-performance, merit-based culture.

Looking at Workday as an example, in the last few years, it’s been a challenge to find the best people. They’re now knocking on our door. It currently takes around half the time to fill a senior position than it did a year or two ago. And we have the added benefit of being able to choose from several excellent candidates for each role.

This situation will not last. If your bottom line allows for it, my advice is to get out there and invest in elite talent. Also, look at your employees across the organisation and if necessary, make adjustments to prioritise the top performers. It may be an uncomfortable reality that some roles need to change or be removed, but it will result in higher performance and productivity across the business.

You need to do that while you can because the tide may be turning. In the second half of 2023, the rate of decline in job requisitions slowed down (-2% from 1H 2023 to 2H 2023). If this trend continues, Australia could hit the end of hiring slowdowns in the next 12 months.

Whose employees will stay when the job market turns?

This is the other issue to bear in mind. Right now, companies are sitting on a long-tenured goldmine of talent. There’s a lot of brain power and energy bottled up – seasoned employees itching to grow their careers. Eventually, the power dynamic will shift.

It’s a point that is not lost on corporate Australia. Many of the business leaders I talk to say they’re concerned about losing top performers who are bored, disengaged or uninspired by current career prospects.

The answer is to re-interest people in staying with your organisation. I recommend that you:

Prioritise internal mobility. As a leader, start pushing internal mobility. Your HR systems should be proactively going to people and their managers with ideas for interesting career moves. Even a sideways move for the same salary will help you secure great talent. Smart people get bored easily. Give them a challenge.
Go back to listening. Many companies did a great job of listening to their employees’ needs during the pandemic, but over time that muscle has atrophied. To keep your high-performers you need to know what they truly care about. And they need to know you’re taking concrete action to address their aspirations or concerns.
Make work less painful. Look at your tools and processes in light of the opportunities AI and automation bring. If you can take the friction out of how work gets done, people will not only be more productive, they’ll enjoy their jobs more. That’s how you become a company people want to grow with.

Now is the time to build a reputation as a great employer. A company where people know they’ll be working with the best in the business, where career paths are fluid and interesting – and where busywork is a thing of the past.

The job market won’t stay like this forever. Make the most of it. Recharge your workforce and double down on the people who make you successful.

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