Australia and New Zealand: Top talent trends 2020
The past few years, and especially 2019, saw a humongous upheaval in the economic and political climate. Economists have predicted the ongoing turbulence to somewhat stabilize, with the dawn of the new decade.
In fact, a slight recovery is predicted, global growth is expected to increase to 2.5% in 2020 from 2.4% in 2019. Much of this will result from emerging markets and developing economies (EMDE) making a comeback- they are expected to grow at 4.1% from 3.5% last year. APAC is one such region, which presents a mixed opportunity, because it is an amalgamation of developed and developing economies. One such stable and developed economy seems to be that of Australia and New Zealand, which imitates the western developed economies in terms of nation-building investments and focus. On the contrary, this region’s talent challenges seem to ape the developing APAC nations. The result is that a very unique talent outlook is required for organizations to succeed in business.
Growing 3.2% on average yearly, since 1992, Australia is the only major developed economy to have recorded no annual recessions from 1992 to 2018. Some of the contributing factors are robust policy frameworks, strong institutions, healthy fiscal position, sophisticated financial system, an attractive investment environment, and strong trade ties with the Asian region. Government policy has been strong- in April 2019 the Australian government announced a A$7.1 Bn surplus in its 2019–20 Budget, the first in 12 years. Post this, Standard and Poor confirmed Australia’s AAA credit rating, making it one of only 10 countries with a AAA credit rating from all three major credit rating agencies. IMF has projected Australia’s GDP growth rate to be 2.8% in 2020 and remain at around 2.7% a year from 2021 to 2024.
New Zealand (NZ) too has a high developmental focus, the government announced a plan to spend NZ$12 Bn on new infrastructure investment, the highest level of capital spending in more than 20 years. Yet, predicted GDP growth is expected to drop from 2.9% (forecasted,2019), to 2.5% in 2020. This may be a fallout of a small budget deficit predicted in 2019. Despite this, NZ continues to be one of the more stable economies in the wake of global uncertainties.
Talent challenges in Australia and New Zealand
Long-term nation-building programs will continue throughout 2020. A strong focus on transport, health and education will create high demand for civil engineers, project managers, and ancillary-sector professionals. As businesses look to adopt new technologies, there will be increasing demand for software development, UX, data management, and cyber security experts. As automation takes over mundane work, one can even expect technology-led job creation for roles related to design, programming, and analytics.
Australia’s recent Royal Commission shall rebuild focus on risk, remediation and compliance, across banking, financial services and insurance sectors. This may lead to high demand, and therein, high salaries for such skilled professionals.
New Zealand’s General Elections are upcoming, and many employers may wait it out before embarking upon any major hiring campaigns. This may lead to the interim hiring of contract and contingent workforce till then.
Salary outlook for 2020: Australia and New Zealand
The average real salary increase in the Asia Pacific region is forecasted to be 3.2%- significantly higher than the global average of 1.4%. (ECA International Report)
As Australia and New Zealand stabilize, there is no widespread salary growth expected in the near future. However, selected sectors with high demand, such as technology, financial services and infrastructure can expect some salary growth. Much of this will be driven by undergoing technology transformations. Niche skills will command a premium, and so will contractors.
Way Ahead: How can companies manage talent?
HR and talent acquisition specialists will need to devise a different talent approach- high salary pay-outs may not be enough to attract and engage highly-skilled specialists to join the organization. Some of the much coveted benefits in these nations are, flexible working, cutting-edge projects and substantial personal learning and development opportunities. Hiring managers must shift to hiring for potential, which means that HR must educate and train hiring managers to remain open-minded with respect to candidates who are a good cultural, but maybe short on technical experience.
From an international-talent perspective, we can see both Australia and New Zealand tightening immigration restrictions. Organizations will need to work closely with an immigration-expert recruitment partner who can offer advisory on international hiring and global mobility, since some specialist roles may demand that.
The way ahead for organizations now lies in attracting, engaging and retaining top talent through a holistic approach. HR leaders must conceptualize and construct an attractive EVP, at the same time revamp people-processes to make them smarter, intuitive, digital and customized to employees’ real needs. This means relooking at career pathing and development, leadership development, global mobility, learning and development, smart working policies, in a new light. New-age talent often looks at employers through a much-wider lens, and not just as a good pay-master.