A tsunami of resignations?
I was chatting with a friendly HR Director the other day who was advising me to hire a lot of new Recruitment Consultants.
He was of the opinion that candidates who had been nervous since Covid and had been unwilling to leave their jobs are now about to let loose.
His theory was that the lockdown and WFH had exacerbated issues for those that were not particularly happy, but the uncertainty has delayed their departure. With a lull in Covid cases, an increased sense of optimism and an increase in job ads (Seek ads are back from a low of 30% of their 2019 levels to 95%), he felt the pent-up demand to find greener pastures was about to unleash a tsunami of resignations and applications. Candidates will be taking steps to start once again chasing their 2019 career goals rather than just hanging onto their jobs.
Adding to this risk of mass departures, I have spoken to a number of individuals over the last month who have been upset about employers enforcing changes to WFH arrangements back to 2019 settings. For executives managing poorly performing businesses, ordering troops back to the office is seen as a way to revert back to the proven successful recipe of pre-Covid behaviours. They want to drive their business out of the mire and feel they can manage their staff more effectively when co-located.
I’m aware of an issue at a Sydney based employer, where the team has been ordered back to work from the office. One employee doesn’t want to return and has produced a doctors certificate to that effect. The company is forcing the individual to see their own Dr to determine if they really are unfit to catch Bus 417 each morning. It will be fascinating to see how similar cases play out over the coming months.
Conversely, we are also receiving feedback from individuals who are still stuck at home and longing to return to the office. Some global firms have blanket policies in place and the locals are starting to get restless.
Unsurprisingly the conversations we’re having with candidates regarding WFH have changed a lot over the course of the year. Our team estimates that around 20% of candidates were asking about WFH policies in 2019 versus close to 100% now. And around a third are now looking for a ‘WFH forever’ arrangement. Employees are currently demanding flexibility, and are receiving it.
However I think we’re living in peak WFH times and some push back to the old ways is inevitable. I don’t think that millions of activewear clad employees are under threat of being forced to don their suits anytime soon. However, I do expect some change, and this will be one of the most interesting trends to observe in 2021.
At this point, it would be a brave employer to be leading the pack in rescinding WFH flexibility.
Working from Home Forever
At the other end of the spectrum, one of my customers suggested recently that he would be happy to take the WFH model to the extreme. He has suggested employing people 100% remotely. This would allow them to live in rural locations and never come to the office. To underscore how attractive this is: a three-bedroom house in Dubbo averages $325k, in Ryde it’s $1.4m. I can see the appeal.
However as the employees cost of living would be less, he would expect to pay them less. The employee would have to pay a price for this flexibility.
So will this Sea/Tree Change equal Rate Change pitch be acceptable to potential employees?
I think the answer is totally related to market forces. We have had no new skilled immigrants for 9 months, that’s almost 100,000 missing workers…. and that doesn’t take into account a decrease in graduates. This immigration vacuum is rapidly creating a skilled candidate shortage, enabling candidates to dictate WFH terms. WFH Forever is very much on-trend at present and there is plenty of choice for job seekers with around 700 work anywhere IT roles currently being locally advertised. Therefore it’s unlikely we will be able to achieve the Sea/Tree Change equals Rate Change trade off at this point.
I do think in the medium term, once we find a new WFH equilibrium and skilled migrants return, those employers offering WFH Forever will have a competitive edge and may be able to secure significant savings.
However it does beg the question (data sovereignty issues aside) if you can have a worker based in Dubbo, why would you not base them in Lithuania, India or Philippines for a much larger saving. Do we need to be careful what we wish for?
Our Predictions for 2021.
We should know better than to make predictions after the most unpredictable year in our lifetimes but here we go:
- The jobs market will be buoyed by the hope of a vaccine led return to 2019-esque conditions. We expect job ad numbers to shortly exceed their pre-Covid peaks.
- Large scale immigration will remain on hold for most of 2021. As businesses prepare for better times, demand will maintain its current upwards trajectory but there will be no increase in supply.
- We will see a worsening shortage of Developers, Network Engineers, Cyber specialists and Data Engineers.
- Project oriented roles (PMO, PM, BA etc) will see some increase in demand however we’re not expecting to see any shortages, probably just a lessening of the current oversupply.
- We are expecting an increase in resignations, but we’re not convinced a tsunami is imminent.
- On the downside, any recovery is likely to be bumpy with the northern hemisphere dealing with continuing lockdowns whilst locally the effects of ending the JobKeeper/Seeker programs are yet to be full understood.
So in summary, we’re predicting that if you’re looking for an IT role, 2021 is looking promising, if you’re looking to hire, you will need to be on top of your recruitment game.
Paul Foster
About Paul:
After 25 years in recruitment, Paul’s wisdom and experience is highly regarded and sought after within the industry. He’s known in industry circles as a thought leader on matters recruitment. Paul co-founded Balance in 2007 and he believes the success of the business is closely related to a ‘customer first’ approach.
If you have a question for Paul email him here or call on 02 9091 8202