Employment demands for Australian executives are at historically low levels despite a rise of 14% in demand for August, as advertising for executive positions continues to rise post lockdown and “cracks appear” in the working from home alternative, according to a new report from the chief of executive search firm EL Consult, Grant Montgomery.
But managing director Montgomery says the rise, while large in percentage terms (there was an overall rise of 14 percent this month) are small in terms of the numbers of new jobs per month occurring pre Covid-19.
According to Montgomery, the prognosis is that in the executive job market recovery is going to continue but it will be slow and bumpy – and with demand for executives at 68% of this time last year there is a long way to go and the return to lockdown in Victoria is going for make the going even slower.
Montgomery notes that the Australian economy was in trouble before the pandemic, and the COVID-19 crisis has “masked” how bad the economy has been going prior to the outbreak – and following the banking commission, the banks took the ‘Responsible Lending” criteria “too far by pushing it well beyond its consumer and household intention and applying it business lending”.
“Businesses could not get credit regardless of their asset backing This heavy handed and misguided approach by both banking policy managers and the Australian Financial Complaints Authority was landing Australia in a severe credit squeeze. Then came the pandemic and in a small part the government spending response gave some reprieve to the then struggling small business sector,” Montgomery says.
“But only now has the “responsible lending’ stupidity been addressed with the Federal Treasurer Josh Frydenberg who is trying to relax the rules and encourage banks to lend to small business and get them going again particularly in the post handout period later this year.”
According to Montgomery, working from home is not a permanent answer.
“Working from home has in many ways also masked to effect of the pandemic on middle Australia with many executive positions carrying on apparently as before, by working at home. But the cracks are now appearing in this alternative and it is very unlikely to become a permanent feature of the post pandemic economy.
“Long before the pandemic companies had been toying with the idea of having staff work from home. It avoided long commutes saved infrastructure costs and with technology like Zoom meetings could be easily put together and managed.
In fact, in 2009 IBM had 40% of its worldwide 386,000 employees working from home but quickly called them back when they saw the long term effect it had on innovation, accountability and profitability.
“Executives’ in Australia are going OK right now because people are working hard to cover the inefficiencies and work through the pandemic as best they can but they are spending heavily on the accumulated down on social capital build up on the pre pandemic years .
“Once people start changing jobs this deficit will become obvious. You cannot deal easily with people you don’t know and the talking heads in Zoom meetings are no substitute for getting to know someone and work with them together as a team.
“It is very difficult to make a complex sale to new client without a face to face meeting were the nuances of a client’s perceptions are hidden behind an electronic façade. Bosses judge people and promote them in a large part on how they interact with their team and are unlikely to promote someone they have never regularly met face to face. Many complex business solutions are worked out in a casual way with colleagues “shooting the breeze” and this will not happen in a formal electronic meeting.”
Montgomery says “there is still a long way to go with the pandemic and there will be many changes in work practices along the way but working from home is very unlikely to become permanent.
“There was a lot or talk at the time and 9/11 almost halted flying for business meetings altogether. But within a year or two demand had increased to many times the previous intensity. Working from home for many businesses will no doubt suffer the same fate and decline rapidly once the pandemic risk subsides.
“Of course, there will be many positions that will continue to work from home, but the central office will be where all the action is,” Mntgomery concluded.
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