Temporary, contract hiring rises in ANZ

Temporary and contract hiring saw a surge in 2023 as more employers grow cautious in hiring and as flexible work arrangements become more popular, according to a new report.

Overall agency contract roles in Australia and New Zealand expanded to 1.1% in the first quarter to 2.2% in the third quarter of 2023, the Q3-Q4 2023 State of Market: ANZ Talent Acquisition Report and ANZ & UK Recruitment Report revealed.

The report said agency contract roles slightly dropped to 1.2% in the fourth quarter, in line with the historically low hiring activities during the period.

Permanent roles made a steep decline from 2.7% in the first quarter down to -6% in the third quarter and then hit -3.6% in the fourth quarter.

Shift in employment landscape

Martin Herbst, JobAdder CEO, said the decrease in the permanent roles in the past year suggests a "significant shift in the employment landscape."

"Economic conditions have undoubtedly played a role in this pattern, with downturns potentially influencing employment stability," Herbst said in a statement.

The CEO also attributed the situation to growing preference towards flexible employment models.

"This plays into the evolving nature of work, as businesses and employees may opt for more flexible arrangements like contract or part-time roles," he said. "It doesn't necessarily signify a decline in job opportunities overall but rather a transformation of what employment looks like."

Mitch King, talent and recruitment leader, also noted that the increase in temp hires will likely continue this year as employees grow thinly stretched amid headcount reductions, opening more opportunities for freelancers and temporary staff.

"This also ties into a trend I expect to see more of on the candidate side; more talent will move away from traditional single-income and permanent employment and instead venture into the world of freelancing or, as we've started to see it more commonly referred to, 'fractional employment,'" King added.

Average jobs create drop

Meanwhile, the average jobs created per account in Australia dropped to 55.44 in the fourth quarter of 2022, while it declined to 45.2 in New Zealand.

"Despite the decline in the number of roles created, the job market is still solid," Herbst said. "The pace it was moving at previously was unsustainable and didn't allow recruiters, both in-house and within agencies, the opportunity to be strategic and create matches between candidates and organisations that would set both parties up for long-term success."

Greg Savage, JobAdder Advisor, also pointed out that the decline was from an "almost all-time high post-COVID-19."

"The much more challenging aspect of the market than the decline in jobs is that employers are more cautious when hiring, and candidates who are acutely aware of rising interest rates, cost of living, and layoffs are more tentative when considering a move," Savage said.

More applications received

This caution from employers comes in the wake of increasing number of job applications received per job a year, the report said.

In Australia, recruitment agencies increased to 31.7 applications per job in the fourth quarter. Talent acquisition also went up to 32 in the fourth quarter.

In New Zealand, applications per job went up to 34.1 for agencies and 40.1 for talent acquisition in the fourth quarter.

"Even with the rise in applications, these roles are becoming more challenging to fill," Herbst noted. "Employers are becoming more selective; decision-making processes are slower; and the criteria for a suitable candidate is more niche and tricky to meet, making the recruiting process more complex."

"However, the current market does not indicate that there are no jobs available to fill; there is more so a need for recruiters to expand their role and be more strategic."