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Australia – Big differences in hiring outlook from Hudson and ManpowerGroup

17 December 2014

Hudson Global recently published its quarterly report forecasting a sizeable jump of +18.7% in (Permanent) Net Hiring Intentions across Australia in Q1 2015. A day later ManpowerGroup released their Employment Outlook Survey with a far more muted conclusion for the region with growth of +8% in their Net Employment Outlook.

According to a blog by Bob Olivier, founder of Australia-based employment data and analytics research firm HR02 Research, people are entitled to be a bit confused.

The Hudson Report, which has been produced since 2001, surveyed 3,432 employers. In the past this has been over 5,000 employers for some quarters.

It is not clear what questions are asked, but Hudson describes their approach as: “The Hudson Report captures employers’ hiring expectations over the coming three months. The report’s quarterly findings are built on the premise that the intention to increase or decrease staffing levels represents a significant indication of employers’ optimism for the growth of their organisations.”

The net effect figure is calculated by taking the percentage of employers surveyed that expect to increase permanent staff levels, or their contracting/temporary workforce, during the forthcoming three months and subtracting the percentage of employers surveyed that expect to decrease staff levels.

The report looks at future hiring intentions nationally and provides further analysis by state and profession/sector. It also provides national contracting trends.

The ManpowerGroup survey also dates back to around 2001. In terms of their approach and sampling method, the company surveyed a “representative sample” of 1,508 employers in Australia. All participants were asked “How do you anticipate total employment at your location to change in the three months to the end of March 2015 as compared to the current quarter?”

The net employment outlook is derived by taking the percentage of employers anticipating total employment to increase and subtracting from this the percentage expecting to see a decrease in employment at their location in the next quarter.

ManpowerGroup also seasonally adjust their data, which involves the normalisation, based on a minimum of three years history, of raw data from quarter-to-quarter taking into account seasonal difference, such as Christmas and holidays. The report provides analysis by state, employer size, and sector (industry).

Mr Olivier commented: “When you look at all the possible factors there is little surprise that differences arise. But some of the weaknesses apply equally to both surveys and some areas of potential difference may not produce material variances. The way each report is structured and the limited information provided on sampling method and those sampled means that no absolute comparison nor conclusion is possible.”

“However I suspect the main reason for the difference lies in the sectoral representation.”

He continued: “Much of Hudson’s comments focus on transformation projects in banks and resurgent demand within the legal profession. As these are not large employers from a national employment perspective (Financial Services make up 6% of the last ABS Positions Vacant report) I suspect the Hudson sample, while larger than Manpower’s, is skewed towards certain smaller “professions” and less representative of the national picture.”

Mr Olivier also provided a chart, plotting the first quarter intentions for both surveys back to 2009. 

He explained: “The Hudson data certainly looks more volatile over time and particularly optimistic even when the ManpowerGroup report is more bullish.”

“I believe hiring intention surveys make a positive contribution to our understanding of the employment market. For recruiters, who need to focus business development, resourcing and share knowledge with clients, job seekers and other stakeholders, we need timely and accurate information. The “rule of thumb” has to remain – be hungry for information, probe deeply, be careful with what you get and how you use it,” he concluded.