Watermark Search International’s Managing Partner comments in the Financial Review

News_Financial-reviewWatermark Search International’s Managing Partner, Nick Waterworth comments on the alternative options available to executives waiting to land their next position.

Executives face long wait for work as job prospects dim.

by Lucille Keen

If you’re a job-hunting senior executive, expect to be trawling through the positions vacant for about six months, if you’re lucky, say recruitment firms.

On top of that, there are fewer job opportunities for executives and more competition, said KPMG national practice leader in executive search and selection Liz Crawford.

“At the very senior end, chief executives can have a six to nine-month wait,” Ms Crawford said.

“In the c-suite, there is a three to nine month wait as well.”

One trend that is emerging is interim management, which is being seen in Europe and the United States.

Executives aged in their 50s and 60s are taking up projects and assignments rather than permanent employment, said Nick Waterworth, managing partner of executive recruitment firm Watermark Search International.

He points to political uncertainty as the reason businesses are not offering permanent employment to executives.

“Certainly in the commerce and financial services sector there is not a tremendous appetite for hiring,” Mr Waterworth said.

“No new roles are being created because business confidence is low.”

But employment varies between sectors. In the legal sector, key roles were being filled but firms were holding off from filling second and third tier positions. In the government sector, executive employment had slowed down in the past 12 months and in the infrastructure sector, the senior end had been very active but slow at the lower end.

The comments after the release this week of the Australian Executive Employment Index that found a 14 per cent drop in executive employment in Australia in June.

Grant Montgomery, managing director of E.L. Consult, which researches and publishes the index, said the research was ahead of the general trend and he expects a reduction in employment growth or, depending on the participation rate, a rise in the unemployment rate among executives, before Christmas.

“There are a number of reasons that are affecting executive employment. First of these is that demand for our resources is cooling,” Mr Montgomery said.

“The real state of the economy has been hidden behind a resource industry curtain. Behind that curtain the Australian economy has been soft and in many ways suffered from the [global financial crisis] every bit as much as the United States and European counterparts. The only significant difference is Australia started with much lower levels of debt.”

He said the slowdown of the Chinese resource sector means Australia must expect a period of adjustment in employment. “No longer will high commodity prices prop up the balance of payments or employment levels as they have in the past,” he said.

The report found the only state and territory to record positive growth in executive employment in June were South Australia and the Northern Territory. Queensland produced the worst result, with losses in its engineering and marketing sectors.

Except for the financial sector, which had the worst result in May, all sectors produced losses compared with the previous month. The marketing sector had the worst result, due largely to a reduction in demand in corporate sector online advertising.

The managing director of outplacement firm, Donington Group, Geoff Officer, said the average time for re-employment was longer compared with the same time last year.

“On average it is taking about five to six months, sometimes longer, for executives to find work.”

Mr Officer said jobs were being filled more through word-of-mouth and networking rather than through advertised recruitment.

But he was concerned that when the market returns, many sectors will be short of talent and have trouble getting staff. The fragile market means businesses are laying off staff.

Mr Officer said his firm had been so busy he had called in more staff to deal with the workload. “It’s probably not been as frantic as the global financial crisis but it’s been steady all year,” Mr Officer said. “During the GFC we saw everyone cutting jobs, this time that’s been more selected.”

Mr Waterworth said companies were gun-shy and those in middle management earning $100,000 to $150,000 are likely to not be replaced.

He said new roles were emerging in the government and utilities sectors, while another area of demand was for tough chief financial officers with experience in cost cuts and driving efficiencies.

“The trends are not part of the normal recruitment cycle and executives are becoming frustrated at how long it’s taking and how few jobs there are,” Mr Waterworth said.

“Instead of employers taking on someone with three of the five attributes they’re after, they are waiting and want it all. There are few opportunities and businesses will be guarded until at least the first quarter of next year.”