Recruitment conditions in Perth
Results from the 2016 Survey of Employers’ Recruitment Experiences
KEY FINDINGS:
- Labour market conditions in Perth have eased substantially over the past four years, resulting in a challenging environment for job seekers. By many measures, Perth now has the softest recruitment conditions of any capital city.
- Since 2012, vacancies have halved, and the average number of applicants per vacancy has more than doubled.
- As competition for vacancies has increasedover the past four years, employers have become more selective in their recruitment. This helps explain the increase in the number of long-term unemployed persons, which has more than doubled since 2012[1].
Background
Labour market conditions in Perth have eased substantially in recent years, with falling recruitment activity and increasing unemployment. With the decline in mining and businessinvestment in Western Australia, the unemployment rate in Greater Perth has increased from 4.3percent in December2013 to stand at 6.1 per cent in October 2016[2]. While employment has grown slightly over the last few years, full-time employment has decreased by more than 22,000 in the last year.
The Survey of Employers’ Recruitment Experiences illustrates these changes to the Perth recruitment market.
Declining recruitment activity
Employers in 2016 reported(an annual) 15 vacancies per 100 staff, half the rate in 2012. Perth now has the lowest level of recruitment activity of all of the capital cities.
This trend is also reflected in the Department’s Internet Vacancy Index, which shows a decline in internet job vacancies of more than a half since the peak in 2011[3].Despite recent increases in job advertising nationally in the resources sector, vacancies across all industries in Perth have declined by 18 per cent in the year to October 2016.
Staffing and recruitment activity:Perth / Change on 2012 / All Capital Cities
Increased staff numbers (in previous 6 months) / 16% / 13% pts. / 24%
Decreased staff numbers(in previous 6 months) / 29% / 13% pts. / 18%
Recruitment activity (vacancies per 100 staff) / 15 per 100 staff / 15 / 18 per 100 staff
Employers have less difficulty recruiting
The proportion of employers experiencing recruitment difficulties has fallen considerably since 2012. Significantly larger fields of applicants in Perth have resulted in fewer vacancies remaining unfilled or being filled with someone who did not have the skills or attributes for which the employer was looking.
Recruitment conditions:Perth / Change on 2012 / All Capital Cities
% vacancies unfilled / 5% / 4% pts / 8%
% vacancies filled with someone lacking required skills / 6% / 7% pts / 8%
% employers who had difficulty recruiting (a) / 24% / 26% pts / 35%
Average no. of applicants per vacancy (b) / 25 / 14 / 15
% of employers with recruitment or retention difficulty impacting on their output or investment / 14% / 19% / 20%
(a)In their most recent recruitment activity
(b)Vacancies advertised on the internet or in a newspaper
With increased unemployment and fewer vacancies, the average number of applicants per vacancy has more than doubled over the last four years. In 2016, employers received an averageof 25 applicants per vacancy advertised on the internet or in a newspaper, the highest of all capital cities.
At the same time, the proportion of employers reporting difficulty recruiting suitable staff[4] has fallen for the fourth consecutive year, and is the lowest of all capital cities. In 2016, the proportion of vacancies remaining unfilled decreased from 9 per cent in 2012 to 5 per cent. Similarly, fewer employers hired someone who lacked the skills and capabilities the role required, more than halving from 13 per cent of vacancies in 2012 to 6 per cent in 2016.
The survey results show that there is significant variability in recruitment conditions between industries.
- The easing in recruitment conditions has been especially prominent in the construction and mining sectors. Competition for vacancies in some previously hard to fill occupations in these sectors has increased, with most employers now having a number of experienced and qualified applicants to select from.
The Construction industry in Perth has not matched the strong growth experienced in other capital cities over the past year. Half of surveyed employers in the Construction industry reported they had recently decreased staff numbers,which is consistent with Australian Bureau of Statistics (ABS) data showing that employment in the sector has fallen by 11,000 in Perth in the past 12 months[5]. The Construction sector is predicted to recover in the medium term, with a projected increase of 13,000 jobs by 2020[6].
- The Manufacturing industry has been in decline in Perth for a number of years, with employment decreasing by 7000 (or 10 per cent) since 2011[7]. More than one in three Perth manufacturers reported decreasing staff numbers in 2016 while just one in nine increased staff numbers.
- The Healthcare and Social Assistance industry has grown by about 25 per cent over the past five years andcontinued to grow in 2016, adding another 2000 jobs in the 12 months to August[8]. One quarter of surveyed employers in the Healthcare and Social Assistance sector reported increasing staff numbers in 2016 (a level no other major industry reached), and a similar number expected to increase staff numbers in the next six months.
Outlook
Employers’ expectations for the next six months:Perth / Change on 2012 / All Capital Cities
Expecting to increase staff numbers / 18% / 17% pts. / 28%
Expecting to decrease staff numbers / 12% / 6% pts. / 7%
Greatest future concern: Demand/economy / 38% / 12% pts. / 29%
Greatest future concern: Recruitment or retention / 20% / 22% pts. / 27%
Fewer employers in Perth reported recruitment or retention difficulty as their greatest concern in 2016, while more employers were most concerned about the future demand for their goods and services or the economy, continuing the trend of the past few years.
Over the medium term, the Perth economy is expected to recover, with an additional 90,000 new jobs projected for the five years to November 2020. About one quarter of new jobs are projected to come from the Healthcare and Social Assistance industry[9]. Western Australia’s state final demand is expected to return to growth in 2018-19, and unemployment is projected to remain around6.25per cent over the next three years[10]. As the economy recovers, Perth’s jobseekers are likely to see some improvement to their current challenging job search environment.
[1]ABS Labour Force, Australia, Detailed, October 2016, 12 month averages of original data
[2] ABS Labour Force, Australia, Detailed, October 2016, 12 month averages of original data
[3] Department of Employment, Internet Vacancy Index, October 2016
[4]In the employer’s most recent recruitment activity.
[5] ABS Labour Force, Australia, Quarterly, August 2016, 4 quarter averages of original data
[6] Department of Employment, RegionalEmployment Projections, five years to November 2020
[7] ABS Labour Force, Australia, Quarterly, August 2016, 4 quarter averages of original data
[8]ABS Labour Force, Australia, Quarterly, August 2016, 4 quarter averages of original data
[9] Department of Employment, RegionalEmployment Projections, five years to November 2020
[10] Government of Western Australia, State Budget 2016-17, Budget Paper No. 3