Hudson 20:20

POSITIONING FOR GROWTH
BUILDING A DYNAMIC
WORKFORCE IN A NEW
ECONOMIC ERA

POSITIONING
FOR GROWTH
BUILDING A
DYNAMIC WORKFORCE
IN A NEW ECONOMIC ERA

The Hudson 20:20 Series Sweeney Research
Released annually, the Hudson 20:20 Series is Hudson Australia/ Hudson commissioned Sweeney Research to conduct a robust
New Zealand’s flagship research publication. The series investigates qualitative and quantitative research study into the lingering impact
talent management issues that have a critical impact on business of the recent economic downturn on Australia and New Zealand’s
performance. Recent topics include: Talent Tightrope – Managing the workforces and the ramifications for the hiring process going forward.
Workplace through the Downturn; Candidate Buying Behaviour; and
Seven Key Drivers of Mature-aged Workers.

About Hudson
Hudson is a leading provider of permanent recruitment, contract
professionals and talent management services worldwide. From
single placements to total project solutions, Hudson helps clients
achieve greater organisational performance by assessing, recruiting,
developing and engaging the best and brightest people for their
businesses. The company employs more than 2,000 professionals
serving clients and candidates in approximately 20 countries.

© Hudson 2010 (ISBN 978-0-9757621-2-7)

CONTENTS
FoRewoRd 4
InTRoducTIon 5
SummARy oF key FIndIngS 6

new economIc eRA
GROWTH RETURNS 10
PRUDENT OPTIMISTS 12
WAKE-UP CALL HEARD 14
RESTLESS WORKFORCE 16
WORKFORCE LOSSES 18
FOSTERING INNOvATION 20
REBUILDING REvENUE 21

cASe STudy: HeAlTHcARe 22

TIme FoR cHAnge
SKILLS SHORTAGES RETURN 26
jOB SEEKING SWELLS 28
REASON FOR CHANGE 30
NEW WORKLOAD REGIME 32
GETTING THE RIGHT TEAM 34
RAISING THE BAR 36
DISTINCTION OF HIGH PERFORMERS 38

cASe STudy: FInAnce 40

cASe STudy: InduSTRIAl 42

RecommendATIonS
FOUNDATIONS OF GOOD HIRING 46
HIRING MISFIRES 48
PERFORMANCE DRIvERS 50
‘WANT TO’ NOT ‘KNOW HOW’ 52

ReSeARcH meTHodology 54

FOREWORD

The last year has been an uncertain and
volatile period for the global economy, putting
a great deal of pressure on our local business
environments and workforces. Midway through
2010, it is clear that both Australia and New
Zealand are in recovery. Our economies are
now growing – Australia’s growth is well ahead
of the international curve and New Zealand’s
recovery is strengthening. For both countries
the economic outlook is broadly positive.
This optimism is mirrored, to a large degree, within our businesses, in
the frames of mind of employers and employees alike. However, to steer
through the crisis our organisations were forced to take a range of swift
actions that, in many cases, reduced the size of the workforce and
affected the security, finances and future of many employees.
Actions such as this do not come without taking their toll. The purpose
of this 2010 Hudson 20:20 Series whitepaper is to assess the current
state of play inside Australia and New Zealand’s businesses and look at
what organisations need to do to build the collective muscle of their
teams, with the aim of driving better business performance.
Our employers face myriad challenges. They need to replace workforce
losses, retain their current teams, attract new employees to grow those
teams and ensure that new recruits are high performers. All this is set
against a backdrop of a unique post-downturn business environment –
increasingly competitive and with an imperative of escalating
profitability and growth.
In today’s context of juxtaposed workforce liquidity and returning skills
shortages it is crucial that employers get the right people into the right
roles to enhance the performance and tenure of individual employees
and teams. Ultimately this report provides recommendations on what
employers can do to ensure that they are correctly identifying, attracting
and retaining high performers. Rigorous hiring procedures, including
sophisticated measures that assess motivational and cultural fit, not
only identify talent in people, but also their propensity to be retained by
their employer – key to sustaining long-term growth.

Mark Steyn
CEO, Hudson Australia/New Zealand

4 POSITIONING FOR GROWTH — BUILDING A DYNAMIC WORKFORCE IN A NEW ECONOMIC ERA

INTRODUCTION

Positioning for Growth – Building The whitepaper looks closely at This year’s research included of
a Dynamic Workforce in a New the job-seeking behaviour of qualitative in-depth interviews
Economic Era is the latest employees, at what is now driving and discussions with key
whitepaper in the Hudson 20:20 them to seek new roles and what Hudson clients to produce case
Series. It assesses the fallout of they are looking for in their roles studies detailing how different
the downturn in Australia and and ongoing careers. It also employers in different
New Zealand’s businesses and explores what employers need to professions felt the impact of the
workforces, with specific focus do to make sure that their teams economic downturn and what
on today’s increasing labour and workplaces are cohesive and this means for their workforce
market liquidity. It also provides high performing and therefore requirements going forward.
recommendations on how to find drive greater profitability
This initial phase was followed
and retain high performing and growth.
by extensive online survey-based
employees in an increasingly
Released annually, the Hudson interviews of 1,690 employees
competitive, skills-short market.
20:20 Series is Hudson and 605 employers in regard to
Australia/New Zealand’s the impact of the downturn on
flagship research publication. their organisations/workplaces
The series investigates talent and their views, behaviour and
management issues that have approach to job seeking and the
critical impact on business hiring process in the post-
performance. Recent topics downturn market. Full details of
include: Talent Tightrope – the research design can be
Managing the Workplace through found in the Research
the Downturn; Candidate Buying Methodology section (See pages
Behaviour; and Seven Key 54 and 55).
Drivers of Mature-aged Workers.
Hudson commissioned Sweeney
Research to conduct a robust
qualitative and quantitative
research study into the lingering
impact of the recent economic
downturn on Australia and New
Zealand’s workforces and the
ramifications for the hiring
process going forward.

POSITIONING FOR GROWTH — BUILDING A DYNAMIC WORKFORCE IN A NEW ECONOMIC ERA 5

SUMMARY
OF KEY
FINDINGS

NEW ECONOMIC ERA employees’ true feelings. employers say they are focussed
growth returns Accurate perception of on growth but to grow they need
Australia and New Zealand’s employees’ mood, particularly the the processes in place to identify
employers are showing a strong fact that loyalty is low, is crucial. innovative, competitive and
degree of confidence in the motivated people who can, and
Restless workforce
post-downturn market – 29% want, to succeed.
The proportion of employees
say their organisations’ outlook who say they value their job less Rebuilding revenue
is ‘upbeat and opportunistic’ and over the previous year has Over half of employers (51%)
56% is ‘cautiously optimistic’. doubled, from 5% in 2009 to report that their profit/revenue
For those employers who 10% in 2010. Employers report decreased, 38% downgraded
reported some negative impact noticing this shift in their their profit outlook, and 13%
as a result of the downturn, 92% workforces already – over half was forced to cut prices. One in
agree we have now emerged (51%) agree that ‘a lot of five employers reduced or
from the worst. A quarter say employees are now looking for cancelled bonuses for all staff
they are ‘back to business as jobs because they feel they have and 11% of employers
usual’. However, 67% say whilst more choice than during the implemented pay cuts for some
‘the worst is over’ they are ‘still downturn’. A quarter of or all staff. The pockets of many
feeling the effects’ of the employers (24%) also think their employees were hit and there
downturn to some degree. current employees feel less will be an expectation amongst
Prudent optimists satisfied with their jobs. many in the workforce that they
Of those still feeling the effects, must be recompensed to keep
workforce losses
52% say they expect to stop them in their roles.
About four in 10 employers
feeling negative effects within a (43%) made roles redundant
year, and a further third (36%)
TIME FOR CHANGE
during the downturn. Overall, Skills shortages return
within 18 months. Employees employers lost 11% of their Nearly three-quarters of
are in agreement – 52% and workforce through voluntary employers (73%) faced skills
32% expect to be back to redundancy, enforced shortages prior to the downturn.
normal within a year and redundancy or staff leaving of During the downturn, this
18 months respectively. their own accord. Organisations proportion decreased to 44%.
Employees are much less ‘cut the fat’ but results suggest This year, the proportion of
concerned about the wider many also ‘cut into the muscle’. employers reporting a skills
economy than this time last year Almost two-thirds of both shortage has risen swiftly to its
– 22% are not worried at all, and employers and employees (59%) current 57%. Employees are
a further 54% are prudently believe their organisations to be seeing greater liquidity and
optimistic. under-resourced following loss therefore more choice in the
wake-up call heard of headcount. workplace. For them the
Last year’s great divide in the Fostering innovation movement has begun.
workplace has diminished and A third of employers (32%) Job seeking swells
employers have a much more report the business market has Almost two-thirds (62%) of
realistic view of the mood of their become more competitive as a employees are actively or
workforces. This year, 17% of result of the downturn. Over half passively job seeking – a marked
employees say they feel ‘more of the employers surveyed (53%) increase on last year’s 49%. Of
loyal’ to their organisation in the report that ‘some scheduled the two-thirds of employees
aftermath of the downturn and business development/plans seeking new roles, almost all
18% of employers agree – were put on hold’. Four in 10 (93%) are planning to be in a
almost exactly in tune with


new role within 18 months. getting the right team performers. Further, 82% say three hiring tools/measures
Nearly two-thirds (61%) of those The majority (80%) of employers high performers inspire others used (most frequently) by
planning to switch jobs aim to do are focussed on growth but and 81% say they boost team Australia and New Zealand’s
so within six months – 39% of 43% say currently they do not productivity. employers are: ‘reference
these within the next three have the right team in place to checking’ used by 88%; ‘resume
months. In short, roughly 40% of grow their business. A large RECOMMENDATIONS screening’ used by 76%; and
all employees have a personal majority of employers (84%) Foundations of good hiring ‘background interview’ used by
goal to be in a new role within the says their organisations made Employers must develop a 66%. All of these measures fall
next six months. too many redundancies during sophisticated Employee value into the ‘know how’ category. In
the downturn and 23% of total Proposition in order to fact, 63% of employers’ total
Reason for change differentiate themselves – only
losses were high performers. hiring procedures and tools are
‘Career development 23% say they are now working
just over a third (34%) believe focussed only on the ‘know how’
considerations’ continues to be harder to demonstrate to
teams have been weakened and category. Almost a third (30%)
the most important trigger for candidates why they should
83% are now focussed on of their efforts address the ‘can
seeking a new role for 64% of work for them. Over a third of
building the right team for do’ category and only 7%
employees, showing an increase employees (37%) will ‘use
growth. Over half (57%) agree measure the ‘want to’ category.
on last year’s 58%. At the same networks or word of mouth more’
that there is now more
time, ‘financial considerations’ when seeking a new role. Thus, ‘want to’ not ‘know how’
competition for candidates than
has leapt forward with 57% of the nature of what existing All 605 employers were asked
before the downturn and 54%
employees now nominating this employees say about a company their thoughts on the difference
say most organisations in their
factor as a trigger. ‘Company is critical. between an average and a high
industry are now hiring more.
considerations’ has also moved performer. Not a single employer
forward for 34% of employees. Raising the bar Hiring misfires cites ‘good references’, ‘years of
Out of the downturn, 38% say Over half of employers (53%) Well over three-quarters of experience/experience’,
they will be ‘much choosier acknowledge that when re-hiring employers (79%) say their hiring ‘education/qualifications’ or
about who they work for’. they have to ‘raise the bar process is ‘formalised’, 60% says ‘where they have worked before’
higher’ than before the downturn they have streamlined or yet these are the measures that
new workload regime improved their hiring processes
and 54% say they are ‘taking employers are most commonly
Two-thirds of employees (62%) since the downturn and 43%
more time to find the right using to bring new people into
feel they are working harder as a says they now have a greater
candidates rather than simply their businesses. The tools they
consequence of headcount focus on better matching
filling the role’ since the currently use, which they
reductions in the workforce and candidates to roles. However,
downturn. However, 35% say perceive to be the most effective
even more employers confirm employers report that 44% of
most of the hiring being done are ‘behavioural interviewing’ at
this is the case (71%). Despite their hires are not good. They are
now is about replacing the 32% and ‘reference checking’
this, ‘work/life balance’ has held concerned about the
people that were lost during the and ‘background interview’ both
steady on last year’s result at consequences of bad hires: 51%
economic downturn. at 9%. Employers clearly need to
42%. Over half of employers about the negative impact on drive a layer of sophistication
(54%) say they will ‘monitor or distinction of teamwork and engagement; 34% through their hiring methods and
scrutinise people’s performance high performers loss of productivity; 34% impact understand better the direct
a lot more closely going forward’ Employers classify 35% of their on morale; 21% opportunity cost; relationship between the
but employees understand this staff as high performers. 18% impact on customer service; effectiveness of the procedures
– almost two-thirds (60%) say Employees provide a very similar and 9% decreased business. they use and the success of
they expect employers to be assessment of their work
Performance drivers their hires.
more demanding of new recruits colleagues. Employers say high
in the aftermath of the performers are 34% more Performance drivers fall into
economic downturn. productive than average three categories: ‘know how’,
‘can do’ and ‘want to’. The top


01


NEW ECONOMIC ERA


GROWTH
RETURNS

“THe economIc Last year saw the worst This positivity wanes somewhat
downTuRn ReSulTed recession to hit the globe in in both employers’ and
In my oRgAnISATIon 70 years. Despite the fact that employees’ account of the
TIgHTenIng ITS
the local Australian and impact of the downturn on their
PuRSe STRIngS –
we’ll conTInue To New Zealand markets coped organisations. Two-thirds of
be ASked To cuT well in comparison to the rest of employers (66%) report there
ReSouRceS buT the world, our business was some ‘negative impact’ on
we’Re bAck on A environments and workforces their organisations during the
SuSTAInAble TRAck”
were adversely affected. downturn, but only a small
Manager, Accounting & Finance However, our economies have proportion (15%) reports this
rallied and, for both countries, was ‘significant’. A quarter (25%)
the economic outlook is broadly say that the downturn had ‘no
positive. impact whatsoever’ on their
organisations and a further 9%
Employers and employees agree
report a ‘positive’ impact.
their organisations have a strong
Employees are in agreement –
degree of confidence in the
67% report some negative
post-downturn markets in both
impact, with the proportion
Australia and New Zealand. A
describing the impact as
third of employers and a quarter
‘significant’ only marginally
of employees, (29% and 25%
higher at 18%.
respectively) say their
organisations’ outlooks are Of those employers and
‘upbeat and opportunistic’, with a employees who report there was
further 56% and 57% some negative impact as a result
respectively citing an outlook of of the downturn, almost all agree
‘cautious optimism’. A high that we have now emerged from
proportion (85% of employers the worst (92% and 93%
and 82% of employees) is respectively). A quarter of this
feeling positive about the future. group of employers (25%) goes
(See Fig. 1) further saying they are now
‘back to business as usual’.
However, whilst the majority of
employers (67%) says ‘the worst
is over’ they are ‘still feeling the
effects’ of the downturn to some
degree. A marginal 8% is yet to
feel the full force of the recovery
– these employers say they are
currently ‘experiencing the worst
effects of the downturn’.
(See Fig. 2)


– Australia outpacing
new Zealand.
FIg 1 OvERALL OUTLOOK Whilst 29% of Australian
employers who were
Employers 29% 56% 12% Q2.5 Employers and Q2.6 negatively impacted by the
Employees: How would
you describe the overall downturn report they are
outlook of your
Employees 25% 57% 14% organisation in today’s now back to business as
post-downturn market?
usual, the proportion is
Outlook upbeat and opportunistic much lower in
Outlook one of cautious optimism
Outlook one of uncertainty
New Zealand at 14%.
Outlook is bleak
Don’t know
– Technology jobs
Base: Employers, n=574
Base: Employees, n=1,633
weather well.
Most sectors report similar
effects with the exception
of ICT and Technical &
FIg 2 CURRENT FEELING Engineering where a
higher proportion of
Employers 8% 67% 25% Q2.3 Employers and Q2.4
employees reports
Employees: Which best
describes how your
organisation currently feels ‘no impact’ (36% and
about the recent economic
Employees 7% 69% 24% downturn? 31% respectively).

Currently experiencing the worst of the effects of the – Victorian victory.
economic downturn
The worst of the economic downturn is over, but it is still
80% of victoria’s
having an effect employers who are still
The worst of the economic downturn is over, and we’re back to
business as usual feeling the negative
Base: Employees, n=1,138 effects, expect a recovery
in the next 12 months
EMPLOYEES BY PROFESSION – well above the 52% for
Public Sector 4% 82% 15% employers overall.
Office Support 5% 70% 25%
ICT 6% 67% 27%
Sales, Marketing & Communications 8% 71% 21%
Accounting & Finance 10% 66% 24%
Technical & Engineering 6% 70% 25%
Currently experiencing the worst of the effects of the
economic downturn
The worst of the economic downturn is over, but it is still
having an effect
The worst of the economic downturn is over, and we’re back to
business as usual


PRUDENT
OPTIMISTS

“we’Re now PlAnnIng For employers in Australia and Amongst Australia and New
FoR A PeRIod oF New Zealand still feeling the Zealand’s employees in general,
gRowTH, THeRe’S An effects of the downturn, there is some signs of the personal
oPTImISTIc AIR In THe
optimism that the end is in sight. stresses under which they were
comPAny THAT we’Ve
mISSed” Over half of these employers placed during the last 12 months
CMO, Sales, Marketing & (52%) say they expect to stop linger. However, employees’ level
Communications feeling these negative effects of concern regarding the
within a year, and a further third stability of the wider economy
(36%) within 18 months. today is significantly less than
Employees who felt negatively that expressed at the same time
impacted are in agreement – last year. Hudson’s 2009 20:20
52% and 32% expect to be Series whitepaper Talent
back to normal within a year and Tightrope reported climbing
18 months respectively. concern amongst employees of
(See Fig. 3) the potential effects of the
downturn on their personal
circumstances – 35% said they
were extremely/quite worried.
This year, only 24% report being
extremely/quite worried about
the current economy. Almost a
quarter (22%) are not worried at
all, and a further half (54%)
prudently express a little caution.
(See Fig. 4)


– light on the horizon.
For employers in Australia
WHEN DO YOU ExPECT TO STOP
FIg 3 FEELING NEGATIvE EFFECTS? and New Zealand still
feeling the effects of the
Employers 13% 39% 36% 8% 4% Q2.4 Employers and Q2.5
downturn, there is
Employees: When does
your organisation expect to
stop feeling the negative optimism that the end is
effects from the downturn?
Employees 18% 34% 32% 13% 3% in sight.

Within 6 months – employees’ pain
In 6 to less than 12 months lingers.
In 12 to less than 18 months
Amongst Australia and
In 18 months to 2 years
More than 2 years New Zealand’s employees
Base: Employees, n=574
in general, some signs of
the personal stresses
under which they were
EMPLOYEES’ CURRENT LEvEL OF placed during the last
FIg 4 CONCERN ABOUT THE ECONOMY 12 months remain.
5% Q2.2 Employees: Which of
– but worries alleviated.
the following best
describes how you feel
about the economy now? Only 24% of employees
19%
22% report being extremely/
quite worried about the
current economy, fewer
than last year’s 35%.
54%

I am extremely worried
I am quite worried
I am a little bit worried
I am not worried at all


WAKE-UP CALL
HEARD

“THe downTuRn Signs are good that Australian Similarly with motivation – last
HAS mAde A bAd and New Zealand’s workplaces year 42% of employers thought
ImPReSSIon on my are more cohesive environments their workforce was ‘more
emPloyeeS And we
than last year. The results of last motivated’, compared to the 22%
know we’Re now
beIng Held To THAT year’s Hudson 20:20 Series of employees that actually felt
‘ImPReSSIon’” whitepaper Talent Tightrope that way. This year results for
HR Manager, Office Support clearly highlighted a great divide employees remain roughly the
between the sentiment of same – 24% report feeling ‘more
employees and their employers’ motivated’ in the aftermath of the
perception of this sentiment. In downturn. However, 18% of
every aspect measured – loyalty, employers this year report
job satisfaction, motivation, thinking their employees are
morale, stress levels, job security ‘more motivated’, demonstrating a
– employers consistently much more accurate perception
thought that employees’ of the mood of their workforce.
sentiment was twice as good as
Australian and New Zealand
it was in reality. Now, a year on,
employers have clearly woken up
it’s evident that this divide has
to the mood of their people and
greatly diminished.
it’s important that they maintain
Overall, employers have a much this clarity. Accurate perception
more realistic view of the mood of employees’ mood, particularly
of their workforces. In 2009, the fact that loyalty is low, is
20% of employees reported going to become crucial to every
feeling ‘more loyal’ to their employer as we move further
organisation as a result of the along the economic recovery
downturn. This year, the path. Employees are becoming
proportion of employees who more optimistic about the
say they feel ‘more loyal’ to their economy in general and with this
organisation in the aftermath of feeling a renewed sense
the downturn has decreased of choice and power is
marginally to 17%. However, the becoming apparent.
change is marked for employers.
In 2009, 43% thought their
workforce was ‘more loyal’ – a
view that was vastly out of sync
with reality. This year, the
proportion has decreased
significantly to 18% – almost
exactly in tune with employees’
true feelings. (See Fig. 5)


– Realism reigns.
Employers have a much
CHANGES TO ATTITUDES FOLLOWING
FIg 5 THE DOWNTURN more realistic view of the
ARE EMPLOYEES MORE OR LESS LOYAL mood of their workforces.
IN THE AFTERMATH OF THE DOWNTURN?
– loyalty low.
Employers Aust/NZ 18% 57% 25% Q2.10 and Q2.11 Employers Accurate perception of
and Employees: How are
you/the employees in your employees’ mood,
organisation feeling now, in
Employees Aust/NZ 17% 62% 21%
the aftermath of the particularly the fact that
economic downturn, in
terms of loyalty/motivation? loyalty is low, is crucial to
every employer.
ARE EMPLOYEES MORE OR LESS MOTIvATED
IN THE AFTERMATH OF THE DOWNTURN? – Flight risk.
Employees’ optimism
Employers Aust/NZ 18% 61% 21% about the economy in
general is breeding a
Employees Aust/NZ 24% 60% 16% renewed sense of choice
More
and power.
Same
Less


RESTLESS
WORKFORCE

“we’Re STRugglIng In 2009 58% of employees said Indeed, employees are
To keeP THe they valued their jobs more as a displaying a fair amount of
good PeoPle result of the downturn – a figure ambivalence towards the
wHo HAVe noT
that, rather than denoting a organisations they work for.
leFT yeT AS moRe
oPPoRTunITIeS oPen dedication to their employer, may Exactly half has felt no change
uP And beTTeR JobS have demonstrated a pragmatic in how positively they feel about
become AVAIlAble” response to a difficult economic their organisation since the
Finance Manager, Accounting climate. In 2010, the proportion downturn, with the other half
& Finance of those who say they value their roughly split down the middle of
jobs more in the aftermath of the feeling more and less positive
downturn has dropped back to (27% and 23% respectively).
44%. (See Fig. 6) Ultimately, well over a third of
employees (38%) report they
The majority (46%) feels about
are more likely to switch jobs in
the same as last year, but the
the aftermath of the downturn,
proportion of those employees
underscoring a sense of
who say they value their job less
restlessness and foretelling
has doubled, from 5% in 2009
greater liquidity in the workforce.
to 10% in 2010. This is a notable
During the downturn the
shift, influenced not only by their
pendulum of power swung
increasingly optimistic outlook
towards the employer but it’s
but also an increasing sense of
rapidly swinging back.
an alternative. Employers report
noticing this shift in their
workforces already – over half
(51%) agree that ‘ a lot of
employees are now looking for
jobs because they feel they have
more choice than during the
downturn’. (See Fig. 7) A quarter
of employers (24%) also think
their current employees feel less
satisfied with their jobs.


– mood of malcontent.
The proportion of those
CHANGES TO jOB vALUE FOLLOWING
FIg 6 THE DOWNTURN employees who say they
DO EMPLOYEES vALUE THEIR jOBS MORE OR LESS value their job less in the
IN THE AFTERMATH OF THE DOWNTURN? last year has doubled,
Employers Aust/NZ Q2.13 Employers and from 5% in 2009 to 10%
50% 44% 6% Employees: Do you/do you
think your employees value in 2010.
your/their job(s) more or
less in the aftermath of the
Employees Aust/NZ 44% 46% 10% economic downturn? – expanding horizons.
Over half of employers
More
(51%) agree that ‘ a lot of
Same
Less employees are now
looking for jobs because
they feel they have more
choice than during the
downturn’.
FIg 7 DO EMPLOYEES HAvE A GREATER SENSE OF CHOICE? – Tossing the coin.
Accounting & Finance
Q3.13b Employers:
Agreement - A lot of employees are the most
employees are now looking
22% for jobs because they feel likely to be switching jobs
they have more choice than
during the economic (46%).
downturn.
51% – changing fortunes.
27%
During the downturn the
pendulum of power swung
towards the employer but
it’s rapidly swinging back.

Disagree + disagree strongly
Neither agree nor disagree
Agree strongly + agree


WORKFORCE
LOSSES

“IT’S HARd To FInd Despite the clear positivity and Many of the cost-cutting
THe bAlAnce optimism Australia and New initiatives implemented by
beTween SAVIng Zealand’s organisations are now employers during the downturn
coSTS And HAVIng
demonstrating the fact remains had a direct impact on
enougH PeoPle To
geT THe Job done that many experienced minimal employment levels within
wITHouT SIgnIFIcAnT growth, in some cases decline, their organisations.
ReSouRcIng throughout the last year. The
PReSSuRe” About four in 10 employers
defensive measures that they
Manager, Office Support (43%) made roles redundant
were forced to take have directly
during the downturn. This alone,
impacted competitiveness,
has had a significant impact on
innovation and profitability – all
the output of the workforce but
crucial factors in successful
employment levels were also
business performance.
impacted in a number of other
Organisations are clearly facing ways. Almost half of employers
problems with the size of their (46%) implemented headcount
workforces. When asked about freezes; 42% implemented
ways in which the downturn hiring freezes and 12% offered
affected their organisations, half voluntary redundancies.
of employers report that some
Overall, employers report that
roles were merged or made
they lost 11% of their workforce
redundant (50%); almost half
through voluntary redundancy,
(43%) report that ‘workloads
enforced redundancy or staff
increased for most in the
leaving of their own accord
organisation’; a third (31%)
during the economic downturn.
report that their company
(See Fig. 9)
‘underwent a restructure’ and a
quarter (22%) that ‘some Organisations have slimmed
divisions, services or offices down. They ‘cut the fat’ but
were merged or closed’. these results suggest many ‘cut
(See Fig. 8) into the muscle’. Almost
two-thirds of both employers
and employees (59%) believe
their organisations to be
under-resourced following loss
of headcount.
This combination of factors has
left organisations stretched,
stressed and with a desperate
need to bolster the workforce or
risk growth being stunted.


– new Zealand
roles suffer.
TOP 10 WAYS IN WHICH THE DOWNTURN
FIg 8 AFFECTED ORGANISATIONS Almost half (49%) of
employers from New
Some scheduled business developments/plans put on hold 53% Q2.2 Employers: In which of
these ways has your Zealand says they made
organisation been affected
Profit/Revenue decreased 51% by the recent economic redundancies, compared
downturn?
to 41% in Australia.
Some roles in the company were merged or made redundant 50%
New Zealand employers
Workloads increased for most in the organisation 43% are also more likely to
Downgraded profit outlook 38% have cancelled bonuses
for management
Market has become more competitive 32%
(31% vs. 20% in Australia).
Company underwent a restructure 31%
– wA and Victoria down,
Some divisions, services or offices were merged or closed 22% SA up.
Company forced to cut prices 13%
Results show that WA and
victoria’s workforce
losses, at 15% were
significantly higher than
the average of 11%, whilst
FIg 9 TOTAL PERCENTAGE OF WORKFORCE LOST SA fared relatively well
with a workforce loss of
TOTAL AUS 11% Q3.4 Employers: What
percentage of your only 4%.
workforce left, either
victoria 15% through voluntary
redundancy, enforced – levels of losses.
redundancy or of their own
Western Australia 15% accord, during and since the 9% of redundancies
economic downturn?
New South Wales 10%
during the downturn were
at executive or senior
Queensland 9% management level, while
South Australia 4% middle management
comprised 21% of losses.
TOTAL NZ 10%
The majority were in non
Auckland 14% managerial professionals/
Base: Employers, n=348 who lost staff specialists (38%) and
admin/support staff (32%).


FOSTERING
INNOvATION

“ouR mARkeT IS An increasingly competitive Employers are clearly focussed
PReTTy cuTTHRoAT market is defining a tight on replacing losses within the
SInce THe downTuRn timeframe within which workforce, but if they are to hit
– we’Re STRugglIng
organisations need to respond to all of these targets –
To comPeTe wITH A
SmAlleR TeAm” these effects. A third of competitiveness, innovation
Strategy Director, Sales, employers (32%) report the and profitability – the people they
Marketing & Communications business market has become bring in must be good hires. Four
more competitive as a result of in 10 employers say they are
the downturn. Organisations need focussed on growth and to grow
to find the right people if they are they need the processes in place
to stay ahead of the game. to identify innovative, competitive
and motivated people that can,
To outpace their competition
and want, to succeed. They need
organisations also need to
high performers.
develop. Again, innovation in
organisations has been badly
impacted by the downturn. Over
half of the employers surveyed
(53%) report that ‘some
scheduled business
development/plans were put on
hold’. Organisations must get
these plans back on track if they
are to compete in their respective
markets. To do this requires that
they find the best people – those
that have the capability and
motivation to truly drive change
are not everyday people.


REBUILDING
REvENUE

“we FAce PRoblemS Organisations’ difficulties are Almost a quarter (22%) reduced As – Sales/marketing/ to
companies attempt both
bRIngIng SAlARIeS compounded by the fact that or cancelled bonuses for repair communications.
these losses and begin to
bAck uP To many are now less profitable. management. One in five hire back in,likely than other
More it’s imperative that
comPeTITIVe leVelS
Now that they have such an employers reduced or cancelled they do so profitably have they
professions to – that
gIVen Two yeARS
oF below HISToRIc urgent requirement to hire, they bonuses for all staff and 11% of get the workforce they need
downgraded profit outlook
bonuS And PAy have tighter budgets with which employers implemented pay cuts with limited budgets and that
(42%) and to report that
RISe leVelS. we to do so. They are being asked to for some or all staff. The pockets any people costs has back into
the market put become
RISk loSIng good do more with less. Over half of of many employees were hit and the business are contributing to
more competitive (47%).
PeoPle”
employers (51%) report that their there will be an expectation the bottom line.
Director, Accounting & Finance – Financial Services.
profit/revenue decreased; well amongst many in the workforce
Significantly more likely
over a third (38%) report that they that these cost cuts, that directly
than other professions
downgraded their profit outlook; affected their personal financial
to have undergone a
and 13% were forced to cut situations, must be recompensed
merger (23%).
prices. These are stark figures. to keep them in their roles. This
will be of particular importance if – Public Sector.
Again, cost-cutting initiatives put
employers are forced to pay Significantly more likely
in place during the downturn
higher rates to secure new staff than other professions to
compound employers’ financial
as skills become increasingly say their workload has
challenges. Over a third of
scarce. (See Fig. 10) increased (63%).
employers (37%) implemented
pay freezes for some or all staff. – eye on the bottom line.
As companies attempt
both to repair these losses
and begin to hire back in,
it’s imperative that they do
so profitably.
FIg 10 INITIATIvES TAKEN DURING THE DOWNTURN
% ORGANISATIONS Q3.1 Employers: Which, if
WHO TOOK INITIATIvE any, of the following
initiatives did your current/
Headcount freeze 46% most recent employer take
(i.e. could still replace current headcount) during the economic
downturn?
Made roles redundant 43%
Hiring freeze (i.e. freeze on new hires) 42%
Pay freezes for some/all staff 37%

Reduced/cancelled bonuses for management 22%
Reduced/cancelled bonuses for all staff 20%
Offered voluntary redundancies 12%
Reduced work hours and corresponding pay 11%
for some/all staff
Pay cuts for some/all staff 5%


CASE
STUDY
HEALTHCARE


CASE
STUDY
HEALTHCARE

This large healthcare company There is a general feeling that There is a drive to refine the
weathered the downturn without the pool of potential employees recruitment process and
any real impact on the is greater than before the streamline it across the
organisation. “It’s been business downturn. Employees who organisation as a whole.
as usual.” However, with previously stayed with a Currently, different areas of the
Government PBS reforms, and company for job security during business have varied procedures
the Government stimulus the downturn are now feeling and there is seen to be a need to
package no longer having an more comfortable about looking put in place a more rigorous and
impact, the retail side of the around for new opportunities. consistent process. In place of
company has seen consumer This trend is reflected in the interviews and resume checks,
spending drop off during 2010. Employee Engagement survey the organisation wants to put in
Whilst the company is aware that conducted in 2010 which place additional tools such as
this is a common trend across revealed low levels of rational psychometric personality testing
retail in general, it is a concern and emotional commitment to which are seen as less
for the management team the company, with a substantial subjective. Setting up
looking forward. decrease in employees claiming relationships with just a few
they intended to stay with the recruitment agencies is seen as
The level of confidence is far
organisation in the future. This is the most effective means of
lower than it was six months ago,
seen as an area of particular maintaining a consistent quality
although as yet this is unlikely to
concern, especially if the of candidates. These agencies
have filtered down to employees.
organisation hits hard times. would be required to work more
There has been a recruitment
as partners than suppliers, with
freeze recently imposed across The data from the 2010
a good understanding of the
the whole organisation, with any Employee survey is still being
business and therefore
new recruitment requiring disseminated and strategies
cognisant of the behavioural and
specific justification. If the have yet to be developed.
leadership characteristics that fit
downward trend continues However, the survey is seen as a
the company’s culture and needs.
through 2010, as predicted, it is vital tool to gauge employee
likely that there will be a sentiment and inform the “There is a lot to be said for
renewed focus on reducing executive team. The focus is on getting the right person in the
costs, through reduced work being action-oriented, and in right role rather than getting
hours or even head count. particular learning from teams bums on seats.” One of the likely
where engagement is higher and implications of the recruitment
In terms of resourcing, one
applying this information to other freeze may be that as soon as it
section of the business has just
areas of the business. is lifted there will be a rush to
undergone a move from manual
employ new staff in case it is
to automated systems and this There has been a move towards
re-imposed. The organisation
has affected staff morale. There focussing on greater
wants to ensure that any
has been some staff turnover as development and rigour around
recruitment is strategic in nature.
a result of the changes, and employee potential and
The repercussions of a bad hire
change in the skills sets required, performance, and putting
are wide-reaching and setting
particularly in more senior roles. measurements around these. As
up more thorough and
Other areas of the business have part of this move, management
structured practices is seen to
remained fairly stable. is considering the skill sets
minimise the risk of recruiting
needed for each role to ensure
the wrong person.
that each position is filled by the
most appropriate person.


02


TIME
FOR CHANGE


SKILLS SHORTAGES
RETURN

“THeRe weRe Some Three-quarters of Australia and On the other hand, employees
RedundAncIeS New Zealand’s employers (73%), perceive greater turnover within
wITHIn THe InduSTRy across all industry sectors agree the workplace than their
buT THe SkIlled
that prior to the downturn they employers have actually
cAndIdATeS ARe
VeRy quIckly were battling with skills recorded. While one in five
SnAPPed uP by shortages across all professions. employers (21%) report greater
oTHeR comPAnIeS During the downturn, this staff turnover within their
And THe RemAInIng proportion decreased organisations since the
oneS ARe noT
significantly and suddenly to downturn, this proportion is far
AlwAyS THe beST
oR HIgHeST 44%. This year, following the higher for employees. Over a
PeRFoRmeRS” downturn, employers are once third (35%) report greater
HR Manager, Technical & again feeling the skills pinch – turnover amongst their teams
Engineering the proportion of employers and colleagues. The accuracy of
reporting a skills shortage has employees’ perception of
risen swiftly to its current 57%. turnover, in this context, is of
(See Fig. 11) Indications are lesser importance compared to
strong that skills shortages will the fact that they are seeing
continue to increase steadily greater liquidity and therefore
throughout the year –17% of more choice in the workplace.
employers already are saying it Their confidence in the labour
will be much harder to find talent market is increasing. For
because many good people left employees the movement has
their industries altogether during clearly begun.
the downturn.
Over the same period slightly
fewer employees perceived skills
shortages, though their changing
perceptions have followed a
curve similar to their employers.
Prior to the downturn almost
two-thirds of employees
identified a skills shortage.
This dropped significantly to
36% during the downturn, but
has increased rapidly with almost
half (47%) now saying they
see a shortage of skills in
their professions.


– Feeling the skills pinch.
The proportion of
SKILLS SHORTAGES: BEFORE,
FIg 11 DURING AND AFTER employers reporting a skills
shortage has risen swiftly
Prior to the downturn 73% 21% 6% Q2.9 Employers: How
much of a skills shortage to its current 57% from
During the downturn 44% 32% 24% do you think there is/was
44% during the downturn.
prior to, during and
Following the downturn 57% 26% 17% following the economic
downturn? – Turning tide.
Skills shortage
No skills shortage
Over a third of employees
Skills surplus (35%) report greater
turnover amongst their
teams and colleagues.
They are seeing greater
liquidity and therefore
more choice in the
workplace.


jOB SEEKING
SWELLS

“IT’S HARd To In 2010, as employees become Throughout the workforce a
ReTAIn STAFF generally less concerned about renewed vigour in employees’
AS conFIdence the wider economy and perceive underlying desire for change is
ImPRoVeS And moRe
increasing power to move jobs clearly evident. Of the two-thirds
RoleS become
AVAIlAble In oTHeR those seeking a new role have of employees seeking new roles,
oRgAnISATIonS” increased in number accordingly. almost all (93%) are planning to
Manager, Technical & Almost two-thirds (62%) are be in a new role within
Engineering actively or passively job seeking 18 months. (See Fig. 13)
– a marked increase on last year. Nearly two-thirds (61%) of those
In 2009, 22% of employees planning to switch jobs aim to do
were actively seeking a new role. so within six months – 39% of
In 2010 this proportion has these within the next three
increased to 29%. Similarly, in months. These figures forewarn
2009 27% were passively of a staggering degree of
seeking – this year the movement within Australia and
proportion has increased to New Zealand’s workforces.
33%. (See Fig. 12) Roughly 40% of all employees
have a personal goal to be in a
new role within the next six
months. The ‘talent exodus’
predicted in last year’s
Talent Tightrope is clearly
gaining momentum.


Hudson 20:20

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