Monthly Media BriefEmployment | The Economy | Contract Work

A CXC Global Knowledge Initiative

October 2016

THE ECONOMYThe following, a summary of the coverage around the economic outlook for Australia for the period: Sept-Oct 2016 (date: 3 November, 2016)

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Economic Outlook

This week, the reserve bank decided to keep interest rates at a record low 1.5%. With a more positive economic outlook, & sentiment shifting to a rosier perspective, it’s anticipated the next move for the RBA will be a rate cut, not hike - one likely to happen later, rather than sooner

CBA’s chief economist, Michael Blythe, had tipped the bank would cut rates on Tuesday this week, but has since pointed to the bank backing away from views that house prices are cooling, stating ‘prices in some markets have been rising briskly’

Subtle changes to the language in the RBA’s statement this week, indicated that new Governor, Philip Lowe, is happy to keep rates on hold for an extended period, but wouldn’t hesitate to ease if the conditions warranted such a move

The RBA is a little more concerned about the housing market, and isn’t completely convinced of a sustained pick-up in employment

There’s been a recent resurgence in commodity prices, elevating Australia’s terms of trade and bolstering our dollar: this paints a more positive picture for growth

Economic Outlook

Having said that, many economists believe the commodity convalescence - especially in coal - to be temporary, with the expectation that coal will decline eventually

September’s CPI inflation report saw interest rate markets scale back expectation of a further rate cut from the RBA this year

Just ahead of the RBA’s announcement this week, the Aussie dollar slipped lower against the Greenback, as investors awaited the RBAs rate decision

Consumer sentiment rose by 0.3% in September compared to August, when it increased 2%. Hence the index was up a healthy 8% on Sept last year

Underlying inflation is soft, however Australia’s consumer sentiment for the period edged higher as an improvement in personal finances made people more likely to splash out on big ticket items

Sentiment may have been supported by news last week that Australia's economy grew 3.3% in the year to June, marking 25 years without a recession

Economic Outlook

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In summary…

economic conditions in Australia over the next 6 months are expected to be mixed: what’s driving that outcome is the combination of a softness in the investment sector – both business investment, where we’re seeing a transition from the mining sector to the broader economy, – and a weakness now emerging within the housing sector, particularly investment in new dwelling construction. We’re seeing an overbuild in new apartments and once that tapers off, we should see a slowdown more generally within housing investment

Economic Outlook

FinlandSweden

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Globally, the Brexit outcome and how that plays out in terms of renegotiated trade policy between the United Kingdom and European Union member states is one to watch. Whether the EU member states allow free trade, or if they are more punitive in how they deal with the UK could slow down the European economy even more so than anticipated

Economic Outlook

Problems associated with European debt still exists. What’s going to happen with Greek debt, Italian debt, Portuguese debt, are influencers that are starting to bubble to the surface

The Chinese economy is still one to watch. The debt levels in China are increasing, particularly private sector debt. Issues around the housing market and housing bubble in China are important, but the Chinese Government has still got a strong hand to play in the adoption of new economic policies which could see about $250 billion worth of investment activity occur, and help stabilise the Chinese economy going forward

Economic Outlook

JOBS OUTLOOKThe following, a summary of the coverage around jobs outlook for Australia for the period: Sept- Oct 2016.

Australia's seasonally adjusted unemployment rate unexpectedly dropped to 5.6% in September, compared to an upwardly revised 5.7% in August and below market estimates

In September, the seasonally adjusted labour force participation rate came in at 64.5% from 64.7% in the month prior

Employment fell 9,800 to 11,947,200: full-time employment decreased 53,000 to 8,105,300 and part-time employment increased by 43,200 to 3,841,900

Labour Force Participation Rate

Unemployment Rate 5.6%

Employment

Jobs Outlook

Over the past 12 months, employment increased by 163,134, the smallest annual gain recorded since April last year. In percentage terms, employment grew by 1.38% over the past year, also the slowest pace since April 2015

Jobs Outlook

Part-time employment has grown by 5.4% over the past year, the fastest pace seen since January 2010. On the other hand, full-time employment has fallen by 0.4%, the first decline registered since April 2014. It now sits at the lowest level since February 2013

According to the ABS, the largest employment increase was registered in New South Wales with employment rising by 6,700 persons. Victoria recorded the largest decrease in employment of all the states and territories at 11,700. Along with New South Wales, Tasmania was the only state to record a lift in employment

Unemployment Rate in Australia averaged 6.93% from 1978 until 2016, reaching an all time high of 11.10% in October of 1992 and a record low of 4% in February 2008 (unemployment Rate in Australia as reported by the Australian Bureau of Statistics)

Labour force participation slid from 64.7% to 64.5%. It now sits at the lowest level seen since May 2014, falling from its recent peak of 65.3% in November last year

Explaining the slide over the past year, labour force participation among males dropped to 70.1%, the lowest level seen in the history of the ABS survey

Female participation held steady at 59.1%

Jobs Outlook

CONTINGENT WORKFORCE COVERAGE

Nearly two thirds of all businesses are actively reshaping how work is completed across the enterprise, blending a mix of contingent workers and payrolled employees to better leverage talent as a business differentiator, according to the research ‘The State of Contingent Workforce Management 2016-2017: Adapting to a New World of Work’ released by Ardent Partners and SAP Fieldglass

Contract Work

According to the research, 63% of organisations are rethinking how work is executed – ranking it as the top adaptation strategy currently being deployed in the shifting business and talent engagement environment. This transformation in executive thinking digs into the core of every corporate project and initiative, allowing for projects to be handled by a broader and more diverse collection of talent, including freelancers, independent contractors and gig workers, the report said

Some of the additional findings from the report include:.

01 Best-in-Class CWM companies deploy a variety of strategies to outpace the general marketbest-in-Class companies excel in real-time visibility into spend-and supplier-led aspects of CWM (68% vs. 25% for all others), conduct regular reviews of worker and enterprise relationships (74% vs. 49%), leverage VMS platforms (72% vs. 46%), and maintain comprehensive onboarding and offboarding processes (79% vs. 55%)

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Contract Work

Real-time sourcing is the top strategy for talent engagementoverall, 71% of businesses are leveraging social, mobile and online talent networks to discover new talent. Other popular strategies include increased hiring of ‘senior candidates’ for contract roles (67%), targeting millennials as a prime source of skill sets (65%) and formalising a companywide ‘agile talent’ acquisition strategy (61%)

Some of the additional findings from the report include:.

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Contract Work

Cost savings is no longer the top driver for executing a contingent workforce management programseveral years ago, the report said, costs (currently at 32%) would have placed ahead of talent engagement (51%) on the priority scale. As the gig economy continues its rapid expansion, discovering new talent and managing compliance (62%) have taken on more important roles

As the gig economy takes shape, businesses will generate value leveraging an evolving ‘non-employee workforce technology ecosystem’

core traditional platforms such as Vendor Management Systems (VMS) and Managed Service Provider (MSP) networks provide a ‘centralised source of truth’ to control and manage all forms of non-employee talent. Overall, 72% of organisations believe such an ecosystem effectively addresses talent, spend, supplier and quality aspects of non- employee workforce management

Contract Work

Gigster’s CEO Roger Dickey believes that by 2020, 40% of America’s workforce will be freelancers. His assumption is backed up by Intuit’s 2020 Report, but anecdotally hebelieves that by 2025, at least half of U.S. workforce will be freelancing, either entirely or as a side job

Gigster is a software/app development platform, which farms out work to IT, coding, programming freelancers: ‘Gigster lets top-gun programmers work how they want, when they want’. The site is invite only, accepts around 1% of applicants, & has 400 developers, 200 product managers and 100 designers servicing more than 1,000 clients including Airbus, World Bank, MasterCard and IBM

In other news in the contractor & gig economy, software development skills are proving to be incredibly lucrative for freelancers: thanks to the explosion of apps across consumer and corporate culture, coding is the hot skill of the moment. Producing a huge amount of high-quality code is drawing $500k incomes for freelancers (Gigster)

A new study by McKinsey Global Institute has likened the shift in the nature of working today, thanks to the digital revolution, to that of the Industrial Revolution: (see chart)

94 million people in the more developed nations of the European Union (EU-15) are independent workers, according to the McKinsey study. Up to 68 million people in the US fall into the same category. Combined, that represents some 28% of their combined working-age populations. (But half of those are full-time workers moonlighting on the side)

On balance, independent workers are satisfied more often than not with their employment. The McKinsey survey found that 68% of those who make most of their money from independent work would like to continue that arrangement. Also, 32% of those who supplement their work with freelance jobs would like to make most of their living from independent work. Even among traditional workers, 12% would like to go freelance as their primary source of income

Contract Work

‘The Millennial Myth’ is the assumption that most independent millennials are drivers for Uber. The fact is, older Americans aged 55 - 75 are nearly four times more likely to be independent workers than 16- to 24-year-olds, according to a study by Harvard economist Lawrence Katz and Princeton economist Alan Krueger. And independent workers are twice as likely to use offline means of finding work or customers offline rather than new online platforms.

Contract Work

Not everyone believes the independent workforce is growing that much (US data). According to data from the Bureau of Labor Statistics (BLS), there are fewer self- employed workers today than a decade ago. And the number of workers with multiple jobs – a hallmark of the gig economy – has barely changed since 1994. “The evidence on recent growth in the independent workforce is thin,” the McKinsey report states

Having said that, the BLS hasn’t done a survey since 2005, hence the Katz & Kruger study is an attempt to update it: it’s this survey that leads them to conclude that independent workers’ share of the workforce has risen from 10.7 percent in 2005 to15.8 percent by 2015

Finally from this study, the internet-fueled gig part of contingent workforce is growing furiously. In one year, Uber doubled the number of daily rides it handles from 1 million to 2 million. Between 2012 and 2015, the number of adults using digital platforms to find work grew an astonishing 47-fold, according to a 2016 study by the JPMorgan Chase Institute

www.bls.net

Contract Work

http://www.businesstimes.com.sg/ https://data.oecd.org/australia.htmhttp://www.businessinsider.com.au/here-comes-australias-jobs-report-2016-10 http://bit.ly/2eXFXBphttp://prn.to/2eXFAXM http://bit.ly/2fjSIVv

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