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The Next Step HR Job Index

April - June 2017

Quarterly Market Analysis for Human Resources Professionals in Australia

thenextstep.com.au | 02 8256 2500

The Next Step HR Job Index | Apr - Jun 2017 thenextstep.com.au | 02 8256 2500

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> HR Job Index IntroductionWelcome to the latest quarterly edition of The Next Step HR Job Index

Welcome to The Next Step Quarterly HR Job Index. It was another positive quarter with HR Executive prospects rising by 3.0%. The market recorded a new high of 127.1 in May but slipped by 0.5% in June with the Executive Contract market showing the most growth. Permanent rose 1.8% over the quarter and 5.7% year to date, resulting in a new record high for permanent vacancies in May.

> National HR Job Index

> The HR sector experienced a rise in executive market opportunities of 3.0%. The Next Step HR Job Index rose from 122.9 to 126.6. The market hit a new record high of 127.1 in May though it fell 0.5% in June. The market has risen by 10.5% so far in 2017 well above the broader Australian employment landscape. The relatively lacklustre second half of 2016 means the year on year rise is just 11.9% but still a strong performance.

> The Executive Contract market dominated the sector with demand rising 4.8% in Q4 of the financial year and an impressive 18.3% over the first six months of 2017.

> In June 2015 Executive Contracting represented 33.5% of all HR talent prospects, this has now risen to 39.4% as of June 2017 with a corresponding fall in the proportion of Permanent positions.

> Prospects across the Permanent market were not as strong however we still observed a 1.8% rise over the last three months and 5.7% year to date. The year on year rise was 7.6%. Whilst not as impressive as the rise in Executive Contract demand, we still achieved a new record high for Permanent vacancies in May, an exciting market for HR professionals.

Chart 1: National Index | Job Type % Change Over Time to June 2017

Chart 2: Job Type| Proportion Analysis


> State Analysis

> In Q4 in New South Wales, opportunities for HR Executives soared 8.6% to a new record high Index of 151.5 in June. NSW/ACT demonstrated peak performance for the first six months of the year, expanding by 15.2% showing that demand has risen successively for the past five months.

> VIC/TAS remains the strongest region with the Index finishing in June on 184, 1.0% lower than at the end of March. It did however set a new record of 189.2 in May only to slip back in June.

The market remains very strong in Victoria and has expanded 10.4% in 2017.

> The improvements seen in the mining and resource dependent states of QLD and WA in late 2016 and Q3 2017 have all but petered out. They lost 1.6% and 1.3% respectively in the last quarter. Both still record healthy growth year on year (WA – 14.5% and Qld – 27.6%) but with spot prices easing considerably across key commodities prospects for HR professionals in these states look uncertain.

Chart 4: State Index | Movement over 24 months

QLD -1.6%

NSW +8.6%

WA -1.3%

VIC -1.0%

SA/NT -1.7%

Chart 3: State Index | Percentage change over 3 months to June 2017

From a state perspective, Q4 showed favourable results across the board with NSW soaring to 8.6% to a new record high of 151.5 in June. VIC/TAS remains the strongest region with the Index finishing in June on 184. QLD and WA both continue to grow year on year, although recorded loss of 1.6% and 1.3% respectively in the last quarter.


> Industry Analysis

% change Apr - Jun Jan - Jun Jul - Jun

Professional Services +7.0% +15.7% +18.2%

Public Sector +12.9% +6.2% +15.3%

Healthcare & Medical -6.5% +9.7% +39.3%

Education & Training +30.1% +40.7% +12.4%

Financial & Insurance Services -3.3% -3.8% -8.7%

Manufacturing +6.8% +25.0% +2.0%

> Q4 displayed increased activity in HR Executive positions across most major industrial sectors. Educational and Training performed well, recovering from the significant contraction that took place in the second half of last year following the removal of the Federal Government incentive scheme for private tertiary educators. This market hit a low in January but has bounced back since then, with signs indicating that Public Sector Education has picked up the slack.

> The Public Sector is the largest employer of HR Professionals representing around 30% of all vacancies and as such the 12.9% growth in demand over the last quarter is welcome news. It achieved a new record high Index of 144.4 in June. The Federal Governments support of the

new Gonski funding plan has given employers confidence to return to the market.

> Professional Services has also seen brisk demand this quarter. Executive advertisements are up 7.3% over three months and 15.7% over six months. The Professional Services Index achieved a new high of 139.2 in June. This sector covers a wide area of consulting – legal, accounting and management consulting but also ITC and represents over one in ten career prospects for HR Professionals.

> Healthcare and Medical fell by 6.5% in Q4. Demand is still an impressive 39.3% higher than a year ago. This recent glitch must be considered a temporary aberration and HR Executives would be wise to continue to focus their energies on what this sector can offer.

Chart 6: Industry Index | Movement over 24 months

Q4 observed improved activity across most industrial sectors, bouncing back from the low recorded in January.

Chart 5: Industry Index | Percentage Change


> Occupational Analysis

> Generalist and Consultants roles represent nearly half of all HR sector vacancies. This Occupational group experienced the strongest growth in the quarter by 6.3%. Requirement peaked in June with the Index on a new record high of 143.4, prospects have also increased every month this year although the pace appears to be slowing down.

> The other disciple where demand is evident is Talent specialists. Demand grew 4.3% in the quarter and by an impressive 16.3% for the year to date. With significant changes to the Skilled Migration Occupational List effective 1st July this is likely to increase the overall bid for talent

Training & DevelopmentHR Management

HR Generalists/ ConsultantsRecruitment

Remuneration & Benefits

Health Safety & Environment

12.9%

48.6%20.5%

2.4%

8.9%

6.7%

Chart 9: Occupational Index | Proportion of the market at June 2017

as sponsored migration becomes more difficult. Local talent placement will grow in importance. Requirement for local talent specialists themselves also looks set to intensify now the ability to “import” from overseas becomes more challenging with salaries looking set to rise.

> By way of contrast Remuneration and Benefits specialists are going to find the market limited. Demand fell a massive 18.9% over the quarter and by 25.8% over the last twelve months. This group represents 3% of all HR vacancies. Both a benign wage inflation situation and many of the tax structuring opportunities now closed off reduces the areas where R&B advisors can add value.

>

Chart 8: Occupational Index | Movement over 24 months

Most Occupational groups grew in the Q4 quarter, with the exception of Remuneration and Benefits.

Data supplied under Copyright by HRO2 Research Pty Ltd.

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