Great jobs data a big win, but will create a whole new set of problems

And why we all need to create a strategic career plan over the summer…

Every month, the ABS issues a report card on the labour market, and this month’s report for November showed an incredible improvement in conditions. All of the numbers beat expectations:

• The unemployment rate fell to 6.8%
• New jobs created smashed expectations at +90k vs expectations of +40k, led by a reopening Victoria, and importantly
• The participation rate rose 0.3% to 66.1%, just below all time highs of 66.2%

So we’re creating jobs, and those who are still unemployed are more likely to start looking. Improving confidence, albeit off a VERY low level, can be a wonderful force multiplier.

But here’s the problem.

Or the two problems, to be more accurate.

Firstly, good numbers can never be taken in isolation. In an era where we’ve relied on monetary and fiscal policy to do the heavy lifting to get the economy motoring again (and for good reason), Canberra will now be more inclined to let policy support taper off.

That means that Jobkeeper is unlikely to be extended in March, and the RBA’s monetary support and unconventional programs may also roll off sooner than expected. One might suggest these are necessary actions to enable an economy to return to normal, but these actions pose a real threat to both the labour market and the underlying economy.

Basically, strong numbers now means Canberra will remove the punch bowl from the party.

Second, as a combination of Jobkeeper on one hand, and often-seen hiring freezes on the other, has meant we’ve had a low velocity labour market throughout 2020. Businesses didn’t hire and didn’t fire either (or at least not to the same extent as would have been expected). No one wanted to be ‘that boss’ who sent their people out into a jobs wasteland.

But both these factors are about to change.

I’ve written how the hiring market is about to explode in February. Hiring teams are currently retooling at pace, the ultimate leading indicator for the labour market.

At the same time, based off the conversations I’ve been having with my clients at FlexCareers, there has been a surge in activity around strategic workforce planning.

• What skills does our organisation have currently?
• What skills will we need for our future as a business?
• And what’s the difference between those two?

Put all of these together, and we’ll get a labour market that is looking for a different mix of skills. Lots of hiring, to go next to an increase in redundancies too.

And this is why we all need to consider our strategic career plan over the summer.

• What skills do you have? What are you really good at?
• How well do these skills line up to the future demands of your job?
• And how can you fill the gaps?

And we know from FlexCareers research that 40% of those who have lost their jobs this year are looking to completely change their career.

The jobs market of 2021 will be all about the great labour reallocation. We’ve all got a once-in-a-career opportunity to design our future of work, where we want to be and how we want to fit into the machinery of the labour market. Take the time this summer to get a bit strategic – your older self will thank you for it.

Update your jobseeker profile on FlexCareers now