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Too many workers sacked during downturn: employers


An overwhelming majority of Australia and New Zealand's employers (84 per cent) say they made too many redundancies during the downturn and many now lack the right teams to grow their organisations, according to extensive research released by Hudson.
 
The research findings reveal 80 per cent of employers have an active focus on growth, but their attempts to rebuild and improve the strength of their workforce are falling flat. Employers say that almost half (44 per cent) of their current hires are 'not good'.
 
The results, taken from 605 employers and 1,690 employees throughout Australia/New Zealand, show both groups have positive outlooks – 85 per cent and 82 per cent respectively say they are feeling positive about the economic future. A third (29 per cent) of employers go further, saying their outlook is 'upbeat and opportunistic'.
 
"This is a very buoyant outlook, considering the mood recorded only one year ago," said Mark Steyn, CEO, Hudson Australia/New Zealand. "But despite this, the fact remains that many employers experienced minimal growth, in some cases decline, throughout the last 12 months."
 
Employers say the market is now more competitive, skills shortages are returning and increasing market liquidity is putting power back into the hands of employees.
 
"Employers cannot afford to make hiring mistakes as they endeavour to rebuild their teams and position their organisations for growth," said Steyn.
 
Over half of the employers surveyed (53 per cent) report that during the downturn ‘some scheduled business development/plans were put on hold’; 51 per cent report that their profit/revenue decreased; and well over a third (38 per cent) say that they downgraded their profit outlook.
 
Overall, 11 per cent of the workforce was lost through voluntary redundancy, enforced redundancy or staff leaving of their own accord, and employers say that 23 per cent of workforce losses were high performers. Almost two-thirds of employers and employees alike (59 per cent) say their teams are under-resourced and 54 per cent of employees say the team they work in is now weaker.
 
"During the downturn many organisations 'cut the fat' but these results suggest that many also 'cut into the muscle'. Employers desperately need to bolster not only the size, but also the strength of their teams to bring their businesses back to a place where they can compete effectively in their markets and establish a solid foundation for sustainable, long-term growth," said Steyn.
 
Clear evidence of increasing workforce liquidity and returning skills shortages is compounding employers' problems. The ranks of both active and passive job seekers have swelled considerably from 47 per cent last year to reach 62 per cent this year. Of those employees seeking a new role, almost all (93 per cent) aim to be in a new role within 18 months.
 
"These figures forewarn of a staggering degree of movement in Australia and New Zealand's workforces. Roughly 40 per cent of the entire workforce has a personal goal to be in a new role within the next six months."
 
Skills shortages are also returning. During the downturn 44 per cent of employers said they were battling skills shortages in their industries. Now, in the aftermath of the downturn this proportion has risen swiftly to its current 57 per cent.
 
"The talent exodus we predicted last year is clearly gaining momentum," said Steyn.
 
Career considerations continue to be the most important trigger for employees to contemplate a new role. So, whilst increasing liquidity in the workforce opens up possibilities for employers to bring people into their business they need to account for the likelihood that they will also lose people unless they are putting emphasis on defining clear career progression for their existing employees.
 
“It’s quality, not quantity that will make the difference. The effects of a poor hire go way beyond simply the cost of back filling the role. A bad hire will damage a team and have a negative effect on existing high performers. There's a real risk that a bad appointment could see existing high performers move on.”
 
The survey also examined Australia/New Zealand employers' current hiring procedures. Employers say they appreciate the importance of robust hiring processes in appointing good hires and their impact to the overall health and performance of their businesses. Over three-quarters (79 per cent) also say their hiring process is formalised.
 
However, almost two-thirds (63 per cent) of employers' current hiring procedures focus on basic techniques such as resume screening and simple interviewing. Only 30 per cent focus on richer methods such as behavioural interviewing and personality testing, and more sophisticated methods that look at motivation and career fit are hugely under-utilised, at only 7 per cent.
 
"There's clearly a disconnection between employers' perception of how robust their hiring procedures are and how effective they are in reality. It’s incredible how many employers apply the 'gut feel' approach to hiring when there are proven systems to find, attract and retain high performers," said Steyn.
 
"Employers must strive to identify high performers correctly. Those employers who make a commitment to bring the best into their business and provide them with an environment in which they can truly succeed and see a future, will reap the rewards now and into the future.”

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