I was a late convert to the juggernaut that was “Game of Thrones”. To be brutally honest, I only binge watched the series so I could join in on some of the conversations in the office but, like everyone, I was soon hooked and became a fan. From season one to the final season, the men from the north warned the southerners that “winter is coming”. This warning meant many things; drastic famine, freezing cold weather and, of course, death via the white walkers and the army of the dead.
You could be forgiven for thinking that “winter is coming” would be an accurate description of the world right now. Recently released economic data shows:
- Annual adjusted inflation is currently sitting at 5.1% with a forecast of 7% by the end of 2022
- The RBA lifting the official cash rate by 0.5% to 0.85% with five more increases expected by the end of 2022. This action is in contrast to the guidance given by RBA Governor Philip Lowe less than 12 months ago where he forecast no interest rate movements until 2024
- Supply chain challenges are having significant impacts. Building and construction companies are beginning to tip as a result of these supply challenges combined with spiralling costs that make fixed cost contracts uneconomical to complete. Consumer goods are suddenly more expensive as a result of the supply challenges and global shut downs as a result of COVID. The war in Ukraine has seen fuel costs escalate. Energy costs are blowing out and there are serious concerns as to whether we can continue to rely on present transmission arrangements to keep the lights on over winter. Even KFC is not immune; they have replaced lettuce with cabbage because they cannot guarantee the supply of lettuce!
It certainly reads as though winter is coming to Australia. However, the unemployment rate in Australia sits at 3.9% and we are still experiencing significant labour shortages.
The recent wage increase of the minimum wage from the Fair Work Commission will see the lowest earning people in Australia earn an extra $40 per week which will be much appreciated.
However, questions are certainly going to be asked as to whether this increase will stoke the inflation fire further which could see investment uncertainty and possibly even “cost push inflation” where companies face rising costs with consumer demand falling. This winter could be long and tough.
So, what can potential job seekers do to prosper in this time?
Be very thorough when choosing a new employer.
Do they have a strong balance sheet and have a history of paying their bills? I would be investigating this before moving jobs in this market because financial challenges will hit and hit quickly. As they say, the grass is not always greener on the other side of the fence.
Ask about the company strategy to deal with these changing economic fortunes.
I was asked recently when interviewing a graduate for my own business what I was planning to do with my own fees in a market with increased costs. I wanted to offer the candidate the job immediately because she had taken the time to think beyond the now (sadly, she decided to pursue an alternative career).
Ensure that you are creating value in your role and not just filling a desk.
These times will inevitably lead to structural changes in the labour market and this will lead to unemployment. A falling investment level tends to coincide with high inflation and this means the demand on labour will slow. In a market like this, you need to always be looking to create value to make yourself seemingly indispensable to your employer so that you are not one of those who find themselves being made redundant.
Be flexible and curious.
Be willing to learn and embrace the challenges in a market like this. Challenge leads to opportunity and being open to it is key.
Finally, heed the lessons from the great inventor Thomas Edison.
He said, “genius is 1% inspiration and 99% perspiration”. In other words, work smart and work hard. Tough economic times present great opportunities but you cannot capitalise on these opportunities unless you are willing to put in the effort.
Should you need any assistance with evaluating your team structure or potential career opportunities, please feel free to reach out to one of our team members at Optimum. Hopefully, these tips will give you a head start against your competition in this market.
BRAD MCMAHON
Managing Director
Brad is the Owner and Director of Optimum Consulting Group. Founding the company in 2003 he has seen it grow to over 30 staff across Australia, Indonesia and the Philippines. Brad is responsible for all operational and strategic functions for the group and he still actively recruits executive assignments for a select group of clients.
