Employers urged to lock in lower wages before war for talent heats up again

Recruitment and labour experts have advised employers to try and lock in downturn-level wages before the economy starts to turn and good candidates can demand big salaries once again.

Research released yesterday from Roy Morgan shows employers have worked to lower wage bills and keep staff by cutting hours. According to the Morgan data, Australian workers worked almost 200 million hours less in the first half of 2009 than in 2008.

In total, Australians worked 9.14 billion hours in the first half of this year, 180 million hours less than the same period last year. Similar research released recently by the ABS shows monthly hours being worked peaked in June 2008 at 1.55 billion hours and has been steadily declining since.

Chairman of Chandler Macleod Recruitment Kevin Chandler suggests these hours will be made up as the economy recovers.

” I think there’s been a change with this downturn in compared to other downturns. Companies have been much more inclined to ask people to work less hours instead of putting people off, so as business volume improves those hours can be picked up relatively easily. There is light at the end of the tunnel I think.”

But recruitment experts say that as the job market becomes more healthy, the power balance will shift from employers to candidates.

Future People Recruitment managing director Linda Samonson and Robert Half managing director David Jones says it is a perfect time to hire new staff at downturn-level wages.

“I think that’s absolutely imperative because we’re already starting to see it…In certain pockets it is already reverting back to a candidate market,” Samonson says.

She suggests there will be increased movement in the workforce in the coming months as employees who have stayed in their current positions look for new opportunities. With this movement, wages will increase.

“I think that’s definitely the case. Wages are always about demand and supply, it all depends what happens with the economy. Based on current indicators where things seem to be on the mend and there is increased hiring intentions, then wage expectations will increase.”

Kevin Chandler says many job seekers are currently willing to take lower level positions.

“You do find individuals dropping down a level, taking a position at a lower level than they might have. We’re certainly seeing that at middle management and upper management level, there’s not much of that happening at entry level though.”