Employer Insights

My Predictions for the Job Market in 2021

Mark Smith Posted by Mark
min read
Clem Onojeghuo F Y8 Jr4iu Pqm Unsplash

Why would I expose myself to predicting the job market in 2021 in January? Imagine if I had done the same in January 2020! I can think of a major seismic event that occurred during 2020 (and is continuing), which I did not predict. Regardless, I have decided it is an appropriate time to break out my inner Nostradamus.

Here's my top 10 predictions for the jobs and employment market in Australia in 2021. 

1. Unemployment will drop sharply in the first half to the mid sixes but flatten out as the stimulus is wound back. My prediction for unemployment in December 2021 6.4%

2. Unexpectedly the trades and property sectors will be more buoyant than the rest of the market. Particularly in Sydney, Melbourne, and Perth. The government's $25,000 incentive for renovations has been extremely popular (at last count 75,000 applications received) which will translate into jobs in the trades. Low interest rates and first home buyer incentives mean that the real estate sector will also be better than expected in 2021. Look for jobs in this highly cyclical sector.

3. Expect a round of mergers for existing recruiters in early 2021. Having survived the downturn, many owners towards the end of their careers will be looking for the exit. On the other hand, you will also see many new agencies as consultants, jaded after the job cuts and hard slog of 2020, try their hand at running their own businesses. Also look for a continuous stream of insolvencies from March 2021, when Job Keeper is unwound. 

4. Expect more temp and contract work to come back into the market in the first half of 2021. Also expect difficulty in filling these roles, as there are no ( or very few) working holiday makers to fill these roles because of the border restrictions, ( particularly the ubiquitous UK and Irish backpackers). Employers should expect to have to compromise on skills or compete harder for available talent, with higher rates.

5. Those in permanent roles should expect minimal pay rises. My prediction for the Wage Index for this past December is for it to be less than 1%. Having said that, for the first time in years, the financial press is talking about inflationary pressures, so when I write this again, this time next year, I may be more optimistic on this front.

6. Demand in the technology sector will remain strong. 

7. Look for new and unexpected titles for roles. For the first time, I have seen titles such as “Employee Experience Manager” emerge in the HR sector in 2020. I am sure there are more roles such as this, as employers grapple with the management of remote staff.

8. Despite the trend in the last decade to off shoring customer service, look for an increase in these roles as companies have been let down by offshore centres in 2020 due to COVID-19 and also the rise of chatbots that handle first line support, with an escalation to Australian based customer service representatives. We have seen some of this in Adelaide in 2020 and I think there will be more of that in 2021.

9. Employer branding will become even more important as a differentiator and attraction strategy in 2021. Alongside wage restraint, there has been a trend to competition between employers in other ways. For example, their ability to articulate a purpose, other than 'just' making money. 

10. Working from home will no longer be considered a benefit and instead will be considered the norm. It's not the differentiator it used to be. Look for roles being advertised as being able to be handled remotely and consequently unlocking talent in the regions.

2021 is going to be a remarkably interesting year. I am sure it's not the panacea for the ills of 2020 and deep down I think the first half will be as hard as 2020. Ultimately it is a far more positive and interesting employment and jobs marketplace than most of 2020.

What are your predictions for 2021? I would love to hear your thoughts in the comments below.