Outplacement News

In unserer englisch-sprachigen Reihe betrachten wir die Auswirkungen der Finanzkrise in den Ländern unseres weltweiten CNI-Netzwerkes. Nach Irland, England und Spanien sind wir nun in Australien angekommen:

Is a turn-over at down under in sight? Geoff Officer, Managing Director of The Donington Group, gives us an overview of the current situation at Australia: It seems highly likely that for Australia, the most severe phase of the economic downturn triggered by the global financial crisis has now passed.

Many media commentaries currently paint a picture of an Australian labour market adjusting to a severe global downturn in a resilient and orderly manner. The relatively benign headline unemployment rate of 5.8% is seen as evidence that Australia has been able to mitigate the worst impacts of the GFC on our workforce. Success for this is attributed to the fact that employers are reducing hours rather than shedding jobs.

However, careful examination of the labor market during this downturn shows that unemployment in Australia is only the tip of the iceberg. Beneath the surface lies the problem of under-employment. It is bigger and is growing faster than unemployment. Many sectors which have never experienced under-employment are now feeling its impact.

Authoritative research released in August by the Australian Industry Group (AiG) validates this. Results from the research show that 50 per cent of Australian businesses have reduced employee hours to cut costs. The AIG survey covered 500 services, manufacturing and construction businesses employing some 228,000 staff.

* Australian Industry Group – “Looking Towards the Upturn Report” August 2009

Any attempt to understand how under-employment may play out in the future should acknowledge the following realties:

• Under-employment was a totally unforeseen outcome arising out of this downturn.

• Preliminary attempts to measure under-employment show it to be of significant scale and widely dispersed.

• Some sectors of the Australian workplace have been more heavily impacted than others.

• Because of the liquidity and solvency pressures faced by many Australian households, under-employment is having major impacts.

• Decisions to reduce working hours taken by employers earlier in the year were not in any real sense negotiated outcomes. They were unilateral, open ended and with no guarantee of reinstatement.

• No previous recession has seen this phenomenon which is widespread, apparently acceptable and currently unaddressed.

• At this point there is no indication that employers are ready to reinstate the hours and other conditions that were cut earlier in the year.

A shift towards shorter working hours also helps to understand why in Australia employment has held up. Recent severe skill shortages are still fresh in the minds of many employers and they are choosing to cut back on working hours rather than reducing labour levels altogether.

This trend is also evident in the part/full-time employment split. Part time employment is rising in Australia where as fulltime employment is falling.

The phenomenon of under employment and the strategies of HR departments and organizations’ to reduce working hours has had a significant impact on the outplacement Industry. While a number of companies have used downsizing as a cost reduction tool, there has not been the wholesale use of redundancy and job reduction within the Australian labour market as has been organizational behavior of recent recessions.

The Outplacement Industry in Australia has been impacted by three trends:

• The requirement for Australian owned subsidiaries and branches of international organisations to use the contracted outplacement global provider. This means that local Australian Outplacement companies have sometimes lost long standing relationships because of the international edict.

• There has been a lack of contestability in the Outplacement market during the global financial crisis as organizations have often had to react quickly to market conditions and have preferred to remain with current provider relationships.

• The Industry has experienced a real “commoditization” of the outplacement service offering with many organizations operating with reduced budgets for Outplacement services. In many instances, service provision has been pared back with the consequent impact on the Outplacement providers’ capacity to address individual needs and support the individual for any serious length of time through the job search process.

Australian Industry, professional service organizations and government agencies have a strong history of using outplacement services. Outplacement practice is built into the human resource policies of many organizations and human resource practitioners in Australia understand and subscribe to the core philosophies and principles that drive the outplacement process. Our challenge is often to get line management to recognize the value of outplacement to the departing individuals and to assist them to understand the flow on effects good outplacement practice has on organizational reputation and risk minimization.

The Donington Group is a specialist in career management, career coaching, career transition and outplacement, and executive career development, working at all organizational levels and across all industry sectors. We offer highly experienced senior consultants, local market knowledge and the highest professional standards, technology and expertise.

We provide the facilitation of career management, career transition and outplacement to Boards, CEOs, Executive Management and the leadership and teams of individuals and groups who are part of our client organizations.  We have extensive experience in the co-ordination and management of large and small scale organization restructures – multi-site; complex/one-off; close-downs; re-engineering; re-location; down-sizing; merger and integration.

We have 16 offices throughout Australia and New Zealand.  Internationally, through the CNI network, we have the capability to deliver seamless career management, outplacement & career transition services.

Geoff Officer, Managing Director of The Donington Group

www.doningtongroup.com.au