I recommend a return to the cub scout days. Be Prepared. Sir Robert Baden-Powell, founder of the Boy Scouts said ‘that a scout must prepare him or herself by previous thinking out and practicing how to act on any accident or emergency so that he is never taken by surprise’.
Prepare yourself and your staff for life after work. Take a three pronged approach to investing in yourselves:
1) Skills and knowledge
Make sure you are employable, productive and relevant to maintain your highest capacity for earning (and saving and investing)
2) Health and well being
The healthier you are the more engaged in life, work and the community you can be. The inverse is also true, there is research supporting the evidence that the more engaged people are in society and community the less likely they are going to be in need of health related services.
3) Financial security
Work out your financial needs for the future and engage a financial adviser to assist you develop the strategy to get you there.
Monday, February 21, 2011
How much is enough?
Lifestyle is a very personal thing - luxury living for one person may be a modest existence for someone else. Choosing a lifestyle is simple - you live the life you can afford. Regardless of the amount, a plan is required to ensure you are able to live the lifestyle you want when you cease employment.
There are two basic methods for determining how much you need in retirement.
1) Budget approach. Firstly, determine what you will need to meet your expenditure requirements per annum. Then, look at the average life expectancy if you are a male or female and multiply the amount you will need each year to live on by the number of years you expect to live upon retirement.
2) Proportion of current salary. A good rule of thumb is that you will need 60 to 70% of your current working salary per annum to live in retirement. Again, multiply this amount by the number of years you expect to live to arrive at an amount of money you will need in retirement.
Currently, the life expectancy for Australian males is 84 years and 88 if you’re female. So, if you plan to retire at 65, your retirement savings will need to last you around 20 years if you're male and longer if you're female.
For example, a male currently earning $50,000 per annum, intending to retire at 60 years of age, will need $35,000 per year for the remainder of his life. Multiplying $35,000 by the 24 years of life he has remaining (based on life expectancy projections) he will require $840,000 as a lump sum in retirement. He will then need to ensure that this is appropriately invested, to maintain real values. NB these numbers are expressed in present value and do not take into consideration the factors affecting the future value, namely the economic and investment climate, interest rates, inflation, superannuation legislation, taxation reform and, of course, personal circumstances. Nor do they take into account return on investment following retirement.
Needless to say, a 9% compulsory superannuation contribution per annum is not likely to be able to achieve the required amount to meet lifestyle needs in retirement.
For the example above, assuming a 25 year old male commenced employment today, contributing only the SCG 9% of salary on $50,000 per annum with a retirement intention age of 60, invested in a balanced fund earning 8% per annum and management fees of 0.55%, the superannuation accumulation in today’s dollars would be $246,000. This is $594,000 short of what he would require.
In this example, this man, retiring at age 60 in 2046, would be forced to rely on the government to assist him financially to meet his needs. However, in 2046 access to the Age Pension is not possible until age 67 and therefore he would be required to continue work for another seven years, or find an alternative income stream.
That said, as at 20 September 2010, the Age Pension was $18,619 a year for a single person, or $28,070 for a couple, including pension supplement, representing 27.7 per cent of Male Total Average Weekly Earnings.
And I haven’t even mentioned the rampant materialism of our current generations and our extremely high levels of indebtedness in Australia. However, that said, it is projected that consumption will fade due to the growing pressures of an ageing population, continued global financial uncertainty, and the rising costs of transport, energy, petrol and housing.
The conclusion to be made from these musings is that neither the compulsory superannuation guarantee nor the age pension, or a combination of the two, are going to be able to support our needs and wants in retirement.
There are two basic methods for determining how much you need in retirement.
1) Budget approach. Firstly, determine what you will need to meet your expenditure requirements per annum. Then, look at the average life expectancy if you are a male or female and multiply the amount you will need each year to live on by the number of years you expect to live upon retirement.
2) Proportion of current salary. A good rule of thumb is that you will need 60 to 70% of your current working salary per annum to live in retirement. Again, multiply this amount by the number of years you expect to live to arrive at an amount of money you will need in retirement.
Currently, the life expectancy for Australian males is 84 years and 88 if you’re female. So, if you plan to retire at 65, your retirement savings will need to last you around 20 years if you're male and longer if you're female.
For example, a male currently earning $50,000 per annum, intending to retire at 60 years of age, will need $35,000 per year for the remainder of his life. Multiplying $35,000 by the 24 years of life he has remaining (based on life expectancy projections) he will require $840,000 as a lump sum in retirement. He will then need to ensure that this is appropriately invested, to maintain real values. NB these numbers are expressed in present value and do not take into consideration the factors affecting the future value, namely the economic and investment climate, interest rates, inflation, superannuation legislation, taxation reform and, of course, personal circumstances. Nor do they take into account return on investment following retirement.
Needless to say, a 9% compulsory superannuation contribution per annum is not likely to be able to achieve the required amount to meet lifestyle needs in retirement.
For the example above, assuming a 25 year old male commenced employment today, contributing only the SCG 9% of salary on $50,000 per annum with a retirement intention age of 60, invested in a balanced fund earning 8% per annum and management fees of 0.55%, the superannuation accumulation in today’s dollars would be $246,000. This is $594,000 short of what he would require.
In this example, this man, retiring at age 60 in 2046, would be forced to rely on the government to assist him financially to meet his needs. However, in 2046 access to the Age Pension is not possible until age 67 and therefore he would be required to continue work for another seven years, or find an alternative income stream.
That said, as at 20 September 2010, the Age Pension was $18,619 a year for a single person, or $28,070 for a couple, including pension supplement, representing 27.7 per cent of Male Total Average Weekly Earnings.
And I haven’t even mentioned the rampant materialism of our current generations and our extremely high levels of indebtedness in Australia. However, that said, it is projected that consumption will fade due to the growing pressures of an ageing population, continued global financial uncertainty, and the rising costs of transport, energy, petrol and housing.
The conclusion to be made from these musings is that neither the compulsory superannuation guarantee nor the age pension, or a combination of the two, are going to be able to support our needs and wants in retirement.
A History of the Compulsory Superannuation Guarantee
In 1992, as a response to the anticipated demographic shift towards older populations, the then Keating Labour Government introduced the Compulsory Superannuation Guarantee as part of a major reform package addressing Australia's retirement income policies. It was anticipated that an increase in age pension payments would place an unaffordable strain on the Australian economy. Since its introduction, employers have been required to make compulsory contributions to superannuation on behalf of most of their employees. This contribution was originally set at 3% of the employees' income, and has been incrementally increased by the Australian government. Since 1 July 2002, the minimum contribution has been set at 9% of an employee's ordinary time earnings. Individuals can choose to make extra voluntary contributions to their superannuation and receive tax benefits for doing so. Subsequent governments have made additional changes to superannuation including the capping of personal contributions and limiting salary sacrificing options. No doubt further changes will also be made in the future as governments attempt to encourage people to stay in the workforce longer.
As superannuation is money invested for one's retirement, strict legislative rules prevent early access to preserved benefits except in very limited and restricted circumstances. Initially superannuation was able to be accessed after the age of 55; however, in 1997 the Howard Liberal Government announced changes to the superannuation system to raise the access age so that by 2025, all Australian workers wishing to access their superannuation would be at least 60 years old. These changes were designed to induce Australians to stay in the workforce for a longer period of time, delaying the effect of population ageing. However, the greater the share of retirement schemes that are privately funded, the less the government can influence labour force participation of older people. Access to financial assistance from the Government in the form of the age pension is available from age 65 for males and 64 for females. The Federal Government has also flagged that the Age Pension age is to increase from age 65 to age 67, effective from year 2023.
As superannuation is money invested for one's retirement, strict legislative rules prevent early access to preserved benefits except in very limited and restricted circumstances. Initially superannuation was able to be accessed after the age of 55; however, in 1997 the Howard Liberal Government announced changes to the superannuation system to raise the access age so that by 2025, all Australian workers wishing to access their superannuation would be at least 60 years old. These changes were designed to induce Australians to stay in the workforce for a longer period of time, delaying the effect of population ageing. However, the greater the share of retirement schemes that are privately funded, the less the government can influence labour force participation of older people. Access to financial assistance from the Government in the form of the age pension is available from age 65 for males and 64 for females. The Federal Government has also flagged that the Age Pension age is to increase from age 65 to age 67, effective from year 2023.
Wednesday, December 15, 2010
Gross National Happiness
In 1972, at the age of 17, the newly crowned King of Bhutan declared that happiness was more important than economic growth. As such he developed a concept for happiness; Gross National Happiness (GNH). Instead of doing the predictable accumulation of power and wealth during his reign, the 4th King of Bhutan, HM Jigme Singye Wangchuck made the happiness of the people of Bhutan the guiding goal of development. He decided that gross national happiness was a much better way to measure a country’s real wealth than gross national product. He believed that happiness is an indicator of good development and good society. When the nation transitioned from an absolute monarchy to a democratic nation in 2008 the reigning king (the 5th King of Bhutan) ensured that happiness would remain a priority and he built it into the young country’s constitution. In 1972, channelling growth in GDP towards happiness was considered quite new (if not absurd) but in recent times, GNH has attracted attention. Opinion around the world has started to converge on happiness as a collective goal and a tool to measure happiness has been developed. Additional, research has also indicated considerable benefits to the workplace in that happiness raises productivity by increasing workers' effort.
Productivity and Happiness
Nothing contributes more to a society’s well-being than productivity. “Productivity isn’t everything, but in the long run it is almost everything.” Economists have long analysed ways to boost productivity through improved skills and education, changing technologies and uses of capital.
Happiness economics typically looks at how macro-level variables such as economic growth affect happiness (standard of living). However, having analysed Bhutan’s philosophy, the question that should be asked, is how does happiness affect economic growth?
Studies have been undertaken to identity whether a rise in happiness might change behaviour at the micro-level, looking specifically at productivity. These studies have confirmed that happiness has large and positive causal effects on productivity. Positive emotions appear to invigorate human beings, while negative emotions have the opposite effect. Happier workers’ effort levels go up, while their precision is unaltered. At the same time, high level (i.e. death in family) unhappiness reduces productivity to a striking degree.
If happiness in the workplace brings increased returns to productivity, then human resource managers, business managers and policy makers need to consider the implications.
There are numerous organisations which have developed tools to measure employee engagement. It’s time for leaders to distinguish between what they can easily count (“are you being paid enough?”) with what employees most value. The intangibles of mission and meaning and happiness are powerful fuel for employers, so finding appropriate ways to measure, and act on, these vital inputs is critical.
Finally, economists need to take the emotional state of economic agents seriously. A recent 18-month study of two Nobel economists recommended that the largest countries of the world end their obsession with GDP and consider some new intangible metrics. In essence, they suggested that GDP – which focuses exclusively on tangible production and consumption – no longer should be our sole definition of global success especially at a time when 64% of the world’s GDP now comes from the intangible service industry.
Happiness economics typically looks at how macro-level variables such as economic growth affect happiness (standard of living). However, having analysed Bhutan’s philosophy, the question that should be asked, is how does happiness affect economic growth?
Studies have been undertaken to identity whether a rise in happiness might change behaviour at the micro-level, looking specifically at productivity. These studies have confirmed that happiness has large and positive causal effects on productivity. Positive emotions appear to invigorate human beings, while negative emotions have the opposite effect. Happier workers’ effort levels go up, while their precision is unaltered. At the same time, high level (i.e. death in family) unhappiness reduces productivity to a striking degree.
If happiness in the workplace brings increased returns to productivity, then human resource managers, business managers and policy makers need to consider the implications.
There are numerous organisations which have developed tools to measure employee engagement. It’s time for leaders to distinguish between what they can easily count (“are you being paid enough?”) with what employees most value. The intangibles of mission and meaning and happiness are powerful fuel for employers, so finding appropriate ways to measure, and act on, these vital inputs is critical.
Finally, economists need to take the emotional state of economic agents seriously. A recent 18-month study of two Nobel economists recommended that the largest countries of the world end their obsession with GDP and consider some new intangible metrics. In essence, they suggested that GDP – which focuses exclusively on tangible production and consumption – no longer should be our sole definition of global success especially at a time when 64% of the world’s GDP now comes from the intangible service industry.
Gross National Happiness Index
Economic growth is generally the mandate for all governments and economies, under the auspices that greater economic growth results in a higher standard of living. Economic growth is generally measured by a number of indicators, including Gross Domestic Product (GDP). GDP is the term used to indicate the increase of output per capita and reflects the quantity of physical output of a society. GDP is heavily biased towards increased production and consumption, regardless of the necessity or desirability of such outputs.
Economic indicators determine policies, embody values and drive societies in a certain direction. The almost universal use of GDP-based indicators to measure progress has helped justify policies around the world that are based on rapid material progress perhaps at the expense of other more holistic criterion such as environmental preservation, cultures and community cohesion.
With a focus on happiness, and as many contemporary indicators of progress and development do not reflect GNH adequately, the Royal Government of Bhutan directed the Centre for Bhutan Studies (CBS) to develop a GNH index, which is to provide appropriate indicators for Bhutanese development. The government recognised the need for GNH indicators because without some kind of measurement system, GNH cannot guide practical policies and programs, however, with a measurement tool, GNH indicators can become tools of accountability.
The CBS constructed a single number index for Gross National Happiness. The purpose of the GNH index is to reflect GNH values, set benchmarks, and inform and track policies and performances of the country. The index can be broken down into individual component indicators that are useful for different sectors for planning and technical purposes at the ministerial and departmental levels.
The GNH indicators have been designed to include four pillars with nine core dimensions and 72 metrics that are regarded as components of happiness and well-being in Bhutan. The nine dimensions were selected on normative grounds, and are equally weighted, because each dimension is considered to be relatively equal in terms of equal intrinsic importance as a component of gross national happiness.
The nine dimensions are:
1. Psychological Well-being
2. Time Use
3. Community Vitality
4. Culture
5. Health
6. Education
7. Environmental Diversity
8. Living Standard
9. Governance
In Bhutan’s perspective, happiness comprises having sufficient achievements in each of the nine dimensions.
Essentially, by developing an index, Bhutan is measuring those inputs that influence the output (GDP) in a more holistic manner to determine whether they are creating a sustainable success.
As a result, Bhutan, a little, almost-mythical country in the Himalayas, has developed a tool to measure the intangible and is now is revolutionizing how world leaders are looking at the definition of development and success.
Economic indicators determine policies, embody values and drive societies in a certain direction. The almost universal use of GDP-based indicators to measure progress has helped justify policies around the world that are based on rapid material progress perhaps at the expense of other more holistic criterion such as environmental preservation, cultures and community cohesion.
With a focus on happiness, and as many contemporary indicators of progress and development do not reflect GNH adequately, the Royal Government of Bhutan directed the Centre for Bhutan Studies (CBS) to develop a GNH index, which is to provide appropriate indicators for Bhutanese development. The government recognised the need for GNH indicators because without some kind of measurement system, GNH cannot guide practical policies and programs, however, with a measurement tool, GNH indicators can become tools of accountability.
The CBS constructed a single number index for Gross National Happiness. The purpose of the GNH index is to reflect GNH values, set benchmarks, and inform and track policies and performances of the country. The index can be broken down into individual component indicators that are useful for different sectors for planning and technical purposes at the ministerial and departmental levels.
The GNH indicators have been designed to include four pillars with nine core dimensions and 72 metrics that are regarded as components of happiness and well-being in Bhutan. The nine dimensions were selected on normative grounds, and are equally weighted, because each dimension is considered to be relatively equal in terms of equal intrinsic importance as a component of gross national happiness.
The nine dimensions are:
1. Psychological Well-being
2. Time Use
3. Community Vitality
4. Culture
5. Health
6. Education
7. Environmental Diversity
8. Living Standard
9. Governance
In Bhutan’s perspective, happiness comprises having sufficient achievements in each of the nine dimensions.
Essentially, by developing an index, Bhutan is measuring those inputs that influence the output (GDP) in a more holistic manner to determine whether they are creating a sustainable success.
As a result, Bhutan, a little, almost-mythical country in the Himalayas, has developed a tool to measure the intangible and is now is revolutionizing how world leaders are looking at the definition of development and success.
Thursday, November 4, 2010
the importance of demography
Population ageing is sometimes overwhelming, often misunderstood, and, more critically, its importance to our economy and livelihood is ignored.
Demography is the study of human populations and thus population ageing.
For all countries and regions (apart from one) economic growth is the mandate for all governments and economies. It is believed that economic growth increases standards of living. It is the term used to indicate the increase of per capita gross domestic product (GDP) and refers only to the quantity of goods and services produced.
Economics is the branch of social science that deals with the production, distribution and consumption of goods and services and their management through the analysis of the Factors of Production. The factors of production are the four resources which enable production; land, labour, capital and enterprise.
Focussing on the labour component, labour is a measure of the work done by human beings. Labour economics seeks to understand the functioning and dynamics of the market for labour. Such analysts are predominantly concerned with labour in terms of labour force participation and unemployment.
But, given that labour must be produced on a daily basis to achieve economic growth it should also be accepted that labour must be reproduced on an intergenerational basis.
This theory results in a concept known as Total Social Production. Total social production is where neither production nor reproduction can take place in the absence of the other. Therefore economic production and demographic reproduction are mutually interdependent.
Most economic analysts see demographic reproduction as secondary to economic activity. This ignorance has been a significant contributory factor as to why we are experiencing population ageing now. What has been missed by policy makers is the ability to ensure that production and reproduction can co-exist.
To manage the implications of population ageing into the future, the role of demography is paramount and can not be ignored any longer. It is time social policy and economic policy co-existed.
Demography is the study of human populations and thus population ageing.
For all countries and regions (apart from one) economic growth is the mandate for all governments and economies. It is believed that economic growth increases standards of living. It is the term used to indicate the increase of per capita gross domestic product (GDP) and refers only to the quantity of goods and services produced.
Economics is the branch of social science that deals with the production, distribution and consumption of goods and services and their management through the analysis of the Factors of Production. The factors of production are the four resources which enable production; land, labour, capital and enterprise.
Focussing on the labour component, labour is a measure of the work done by human beings. Labour economics seeks to understand the functioning and dynamics of the market for labour. Such analysts are predominantly concerned with labour in terms of labour force participation and unemployment.
But, given that labour must be produced on a daily basis to achieve economic growth it should also be accepted that labour must be reproduced on an intergenerational basis.
This theory results in a concept known as Total Social Production. Total social production is where neither production nor reproduction can take place in the absence of the other. Therefore economic production and demographic reproduction are mutually interdependent.
Most economic analysts see demographic reproduction as secondary to economic activity. This ignorance has been a significant contributory factor as to why we are experiencing population ageing now. What has been missed by policy makers is the ability to ensure that production and reproduction can co-exist.
To manage the implications of population ageing into the future, the role of demography is paramount and can not be ignored any longer. It is time social policy and economic policy co-existed.
I'm back
I’m back. My gorgeous little boy turned one last month and what a year it was. Now that he is healthy and happy, I thought it was time to reconnect with the world again. While I have managed to keep abreast of what has been happening in Tasmania economically, politically and socially, I have to admit being a full time mum has prevented me from digesting and analysing all the relevant information, policies and data sufficiently enough to provide you all with an insightful newsletter, InSummary.
Also last month, I presented to the Tasmanian Council of Professional Services a snap shot of population ageing, Tasmania and the implications for the labour market. During the time that Rory was sleeping, I beavered away; analysing data and policies, developing charts and working out ways to present the information which is sometimes overwhelming and often misunderstood in an informative, educational and challenging way. During this time, I had more energy, felt less tired, was engaged in the workforce again, was highly productive, was happier, and, more than likely, a better mother.
This scenario begged the question, if I could be both a good mum and highly productive in the workforce, why not consider a higher level of engagement in the labour market? Given I have no family in Hobart, I had to find formal care for Rory for the days that I would be working. Not only are most childcare services ‘full’, I discovered that we would not be entitled to any government concessions or rebates due to combined income assessments. In addition, we did not receive the Baby Bonus and are not entitled to any ongoing Family Tax Benefits. So, when I consider the cost of care and that almost half my income would go in taxes (from which I do not benefit), the next question is why would I, a highly educated, skilled, productive person, return to the workforce when there is no foreseeable financial gain? Any benefits would be purely self-fulfilling.
I know I am not alone.
With population ageing, shrinking workforces and skill shortages this is a ludicrous scenario.
Also last month, I presented to the Tasmanian Council of Professional Services a snap shot of population ageing, Tasmania and the implications for the labour market. During the time that Rory was sleeping, I beavered away; analysing data and policies, developing charts and working out ways to present the information which is sometimes overwhelming and often misunderstood in an informative, educational and challenging way. During this time, I had more energy, felt less tired, was engaged in the workforce again, was highly productive, was happier, and, more than likely, a better mother.
This scenario begged the question, if I could be both a good mum and highly productive in the workforce, why not consider a higher level of engagement in the labour market? Given I have no family in Hobart, I had to find formal care for Rory for the days that I would be working. Not only are most childcare services ‘full’, I discovered that we would not be entitled to any government concessions or rebates due to combined income assessments. In addition, we did not receive the Baby Bonus and are not entitled to any ongoing Family Tax Benefits. So, when I consider the cost of care and that almost half my income would go in taxes (from which I do not benefit), the next question is why would I, a highly educated, skilled, productive person, return to the workforce when there is no foreseeable financial gain? Any benefits would be purely self-fulfilling.
I know I am not alone.
With population ageing, shrinking workforces and skill shortages this is a ludicrous scenario.
Friday, July 2, 2010
tasmanianjobs.com announcement
advertising with tasmanianjobs.com is now FREE
What: All employment vacancies
All education and training courses
How: Login as an advertiser at http://www.tasmanianjobs.com/ (or register as an advertiser at http://www.tasmanianjobs.com/advertise/register/)
Follow the prompts to advertise
Why: Instantly connect with over 3500 registered jobseekers
http://www.tasmanianjobs.com/
NB : any design, management or administration of advertising campaigns will continue to incur management fees as agreed prior to advertising.
Should you be interested in sponsoring, contributing to or advertising in the regular InSummary newsletter or quarterly job seeker newsletter, please contact me.
What: All employment vacancies
All education and training courses
How: Login as an advertiser at http://www.tasmanianjobs.com/ (or register as an advertiser at http://www.tasmanianjobs.com/advertise/register/)
Follow the prompts to advertise
Why: Instantly connect with over 3500 registered jobseekers
http://www.tasmanianjobs.com/
NB : any design, management or administration of advertising campaigns will continue to incur management fees as agreed prior to advertising.
Should you be interested in sponsoring, contributing to or advertising in the regular InSummary newsletter or quarterly job seeker newsletter, please contact me.
Thursday, June 10, 2010
Studying interstate and the impact on skill shortages
We know, and accept, that Tasmania is the oldest state in Australia, that we are ageing at a faster rate than any other state and that there are more people exiting the workforce than entering it. We know, and accept, that the ageing of the state is due to longer life expectancies, migration and, until recently, loss of people in the working age groups and thus reproductive age groups. Tasmania recently surpassed the Northern Territory for the highest birth rate and we are now producing children at a greater rate than the replacement rate (2.1 births per woman). This could be due to a number of reasons, all of which we are unable to detail here. However, one reason may be that, encouragingly, Tasmania is closing the gap on interstate migration losses to other states.
In 2002/03, Tasmania reverted from ongoing annual net losses in interstate migration, to a gain. Since then, apart from 2006/07, Tasmania has been welcoming more people to our state than fare welling. However, hidden in these numbers has been that we had continued to lose more people than we gained in the working age groups. This loss has now been contained to the 15 to 29 year old age group for the past three years.
Interstate movements are recorded and reported by Medicare, therefore we can not ascertain the specific reasons for this age group leaving the state. However, anecdotal evidence and a process of elimination would indicate the following reasons could be significant contributors:
• Employment opportunities
• Travel
• ‘greener pastures’
• Relocating with family/friends
• Study
Many post-school and tertiary education courses are not provided in Tasmania, in particular allied health professions. Below is a true example of a young Tasmanian’s experience in having to study interstate.
Case Study: Anna completed year 12 in Hobart in 1996. With a desire to become a physiotherapist, but realising she could not study in Tasmania, Anna was successful in being awarded a $20,000 per year scholarship by the Department of Health and Human Services (DHSS) to study interstate. Anna was accepted to the University of NSW. Wanting to live and work in Tasmania when she completed her studies, Anna would contact the DHHS seeking placements in Tasmania for all of her rounds. She was advised that this was not possible as they had an existing arrangement with the University of Adelaide. Upon completion of her qualification, Anna still wished to return to Tasmania and applied for positions in Hobart, Launceston and the North West. Following up with the DHHS after being unsuccessful, she was advised that while her grades were good, they were not as good as other applicants. Anna worked interstate as a physio for a number of years before recently returning to Hobart, with her husband, but is no longer working as a Physiotherapist.
Conclusion: Given the age structure of our population and the rate of ageing, demand for occupations in the allied health professions will increase significantly, in a short time period. Regardless of whether or not our young people receive a scholarship to study interstate, we should be ensuring that there is a process in place to provide placement training and employment opportunities to Tasmanians wishing to return home.
Importantly, any strategy should not be limited to those in the allied health professions, but any occupation where education and/or training is not provided here.
In 2002/03, Tasmania reverted from ongoing annual net losses in interstate migration, to a gain. Since then, apart from 2006/07, Tasmania has been welcoming more people to our state than fare welling. However, hidden in these numbers has been that we had continued to lose more people than we gained in the working age groups. This loss has now been contained to the 15 to 29 year old age group for the past three years.
Interstate movements are recorded and reported by Medicare, therefore we can not ascertain the specific reasons for this age group leaving the state. However, anecdotal evidence and a process of elimination would indicate the following reasons could be significant contributors:
• Employment opportunities
• Travel
• ‘greener pastures’
• Relocating with family/friends
• Study
Many post-school and tertiary education courses are not provided in Tasmania, in particular allied health professions. Below is a true example of a young Tasmanian’s experience in having to study interstate.
Case Study: Anna completed year 12 in Hobart in 1996. With a desire to become a physiotherapist, but realising she could not study in Tasmania, Anna was successful in being awarded a $20,000 per year scholarship by the Department of Health and Human Services (DHSS) to study interstate. Anna was accepted to the University of NSW. Wanting to live and work in Tasmania when she completed her studies, Anna would contact the DHHS seeking placements in Tasmania for all of her rounds. She was advised that this was not possible as they had an existing arrangement with the University of Adelaide. Upon completion of her qualification, Anna still wished to return to Tasmania and applied for positions in Hobart, Launceston and the North West. Following up with the DHHS after being unsuccessful, she was advised that while her grades were good, they were not as good as other applicants. Anna worked interstate as a physio for a number of years before recently returning to Hobart, with her husband, but is no longer working as a Physiotherapist.
Conclusion: Given the age structure of our population and the rate of ageing, demand for occupations in the allied health professions will increase significantly, in a short time period. Regardless of whether or not our young people receive a scholarship to study interstate, we should be ensuring that there is a process in place to provide placement training and employment opportunities to Tasmanians wishing to return home.
Importantly, any strategy should not be limited to those in the allied health professions, but any occupation where education and/or training is not provided here.
Skill shortages on a personal note
I have been making a noise about skill shortages in Tasmania since 2004, but now it has gotten personal. My son Rory was born with a cleft palate and conductive hearing loss. At six months he was supposed to have surgery to repair the cleft and insert grommets to (hopefully) fix his hearing, not only did we ‘slip through the cracks’ once, but we had the surgery cancelled 20 minutes before scheduled due to staff shortages and not enough skilled nursing staff to provide the level of care he would need post-op. Further investigation revealed that the Royal Hobart Hospital is incredibly short of paediatric intensifists with almost 100% turnover. Since Rory was born he has seen, many ongoing, a paediatrician, sonographer, audiologist, plastic surgeon, ear nose and throat surgeon, osteopath, physiotherapist, speech pathologist, orthotist, radiographer, GP and clinic health nurse. The majority of these occupations are not educated in Tasmania and I am indescribably thankful that these wonderfully professional people have all chosen to live and work in Tasmania. Rory has since had his surgery, and four weeks in things are looking up.
Wednesday, April 14, 2010
Industry Life Cycles
Much like product life cycles, industries experience a similar cycle of life, capturing the way many industries evolve through their formative eras, growth and patterns of maturity. Just as a product is developed, introduced to the market, adopted, grows, matures, and eventually experiences decline, so too do industries. The stages are the same for all industries, yet industries cycle through the stages in various lengths of time. Even within the same industry, various organisations may be at different life cycle stages. Strategies of an organisation as well as of competitors vary depending on the stage of the life cycle. Some industries need to make strategic decisions during the maturity phase to extend the life, and even find new uses for declining products, thus extending the life cycle.
The growth of an industry's sales over time is used to chart the life cycle (see right).
The distinct stages of an industry life cycle are: introduction, growth, maturity, and decline.
Important to note is that the life cycle model assumes that an industry is clearly distinguishable, however in many instances emerging industries are hard to define, and often appear as segments of established industries.
Overview:
Industries begin in a period of fragmentation as companies experiment with different approaches. With time, a scalable approach emerges as a dominant model, often because it yields greater efficiencies than available alternatives. As the dominant model develops, an industry goes through a shakeout as unaligned organisations are forced to exit. Eventually, organisations find it difficult to improve their productivity on the dominant model at high rates, volume growth hits a point of diminishing returns, and the industry enters maturity. Ultimately, as volumes drop because of saturated demand, exhausted supply or uncompetitive environments, the industry moves into decline.
Each of the phases carries implications for how organisations organise, compete and exploit technical progress. The emergence of a dominant model is critically important to industry evolution because these models generate opportunities to achieve economies of scale and scope. Industries eventually enter a mature phase in which volume growth slows down because organisations hit the limits of technical opportunity in the dominant model. Organisations often shed activities that could be subcontracted efficiently, and pared down product lines to enhance efficiency incrementally. An industry moves into decline when aggregate sales volume drops. Avoiding a war of attrition becomes a major strategic imperative. Inefficient organisations may diversify out of the industry and may seek to consolidate.
Introduction
In the introduction stage of the life cycle, an industry is in its infancy. A new, unique product or service offering may have been developed and patented, thus beginning a new industry. At this stage, an organisation may be alone in the industry. It may be a small entrepreneurial company or a proven company which used research and development funds and expertise to develop something new. Significant financial investment is undertaken at this stage of the life cycle, often without financial reward. Organisations attempt to establish a niche for dominance within an industry during this phase by establishing early perceptions of product or service quality, technological superiority, or advantageous relationships with vendors within the supply chain to develop a competitive advantage.
Growth
During the growth phase more organisations identify opportunities within the industry. The industry experiences more product standardisation at this stage, which may encourage economies of scale and facilitate development for production efficiency. The key issue in this stage is market rivalry. Because there is industry-wide acceptance of the product, more new entrants join the industry and more intense competition results. The duration of the growth stage, as all the other stages, depends on the particular industry. During the growth stage, the life cycle curve is very steep, indicating fast growth, however financial investment remains a significant requirement to facilitate this growth through such activities as marketing, property, plant and equipment investment and ongoing product development (R+D).
Maturity
As the industry approaches maturity and demand for the product or service lessens, the industry life cycle curve becomes noticeably flatter, indicating slowing growth, however profit margins may continue to increase. In mature industries, there are usually fewer organisations, and those that survive will be larger and more dominant. Organisations may compete on quality to separate their product from other lower-cost offerings, or conversely the organisation may try a low-cost/low-price strategy to increase the volume of sales and make profits from inventory turnover.
Decline
Declines are almost inevitable in an industry. If product innovation has not kept pace with other competitors, or if new innovations or technological changes have caused the industry to become obsolete, sales suffer and the life cycle experiences a decline. In this phase, sales are decreasing at an accelerating rate, causing the plotted curve to trend downward. There is usually another, larger shake-out in the industry as competitors who did not leave during the maturity stage now exit the industry. Yet some organisations will remain to compete in the smaller market. Mergers and consolidations will also be the norm as organisations try other strategies to continue to be competitive or grow through acquisition and/or diversification.
Prolonging the life cycle
The life of an industry or organisation can be prolonged through strategic efforts to maximize profits through increasing efficiencies. Management efficiency can help to prolong the maturity stage of the life cycle. Production improvements, like just-in-time methods and lean manufacturing, can result in extra profits. Technology, automation, and linking suppliers and customers in a tight supply chain are also methods to improve efficiency. Alternatively, the strategy may be to differentiate the product or service offering based on quality. Research indicates that those industries and organisations that survive longer are those that are the most strategic, forward thinking and innovative for the duration of the life cycle, often with ongoing and superior commitments to research and development, post entry into the market. In addition, it is those organisations that innovate and develop an industry (early entrants) that tend to survive longer than later entrants to the market. However, it is also important to note that it is the structure of demand which is just as important to industry success as innovation and technological capability.
Conclusion
Many of the large organisations that have closed their doors, or scaled down operations, in Tasmania in recent years have been in the traditional, predominantly manufacturing, industry sectors and generally owned by national or multinational companies. While regarded as ‘institutions’ of the regions in which they were located, it is this length of time of establishment which has contributed to the ultimate closing of the plants in Tasmania. Each has been in the maturity phase of the industry life cycle, and essentially the strategic approach by management has been to increase efficiencies and prolong the industry/organisation by reducing costs and consolidation.
Examples of the issues faced by these companies have included:
• Inability to maximize economies of scale
• Decentralised industry/organisation
• Increased operating costs
• Increasingly uncompetitive due to labour costs and geographical location
• Declining demand
• Lack of ongoing investment in research and development, skills and plant and equipment
• Requirement to innovate and differentiate product offering
• Ageing infrastructure
• Lack of skill base
Wish list for the new Government
Based on the discussions above and to ensure ongoing economic growth and employment opportunities for Tasmanians, the following is a wish list for our newly elected government to consider.
• Cease propping up businesses in the maturity/decline phases of the industry life cycle
• Proactively encourage investment in industries that take advantage of Tasmania’s competitive and comparative advantages
• Support the investment in research and development for Tasmanian based companies in priority industry sectors
• Provide a competitive business environment
• Assist industries/organisations strategic development and capability to adapt in the face of change
• Work with industry, employers and unions to ensure that workers are undertaking ongoing skill and workforce development to enable transfer between industry sectors
• Provide post year 10 education and training aligned with industry needs that will enable Tasmanians to secure employment into the future.
The growth of an industry's sales over time is used to chart the life cycle (see right).
The distinct stages of an industry life cycle are: introduction, growth, maturity, and decline.
Important to note is that the life cycle model assumes that an industry is clearly distinguishable, however in many instances emerging industries are hard to define, and often appear as segments of established industries.
Overview:
Industries begin in a period of fragmentation as companies experiment with different approaches. With time, a scalable approach emerges as a dominant model, often because it yields greater efficiencies than available alternatives. As the dominant model develops, an industry goes through a shakeout as unaligned organisations are forced to exit. Eventually, organisations find it difficult to improve their productivity on the dominant model at high rates, volume growth hits a point of diminishing returns, and the industry enters maturity. Ultimately, as volumes drop because of saturated demand, exhausted supply or uncompetitive environments, the industry moves into decline.
Each of the phases carries implications for how organisations organise, compete and exploit technical progress. The emergence of a dominant model is critically important to industry evolution because these models generate opportunities to achieve economies of scale and scope. Industries eventually enter a mature phase in which volume growth slows down because organisations hit the limits of technical opportunity in the dominant model. Organisations often shed activities that could be subcontracted efficiently, and pared down product lines to enhance efficiency incrementally. An industry moves into decline when aggregate sales volume drops. Avoiding a war of attrition becomes a major strategic imperative. Inefficient organisations may diversify out of the industry and may seek to consolidate.
Introduction
In the introduction stage of the life cycle, an industry is in its infancy. A new, unique product or service offering may have been developed and patented, thus beginning a new industry. At this stage, an organisation may be alone in the industry. It may be a small entrepreneurial company or a proven company which used research and development funds and expertise to develop something new. Significant financial investment is undertaken at this stage of the life cycle, often without financial reward. Organisations attempt to establish a niche for dominance within an industry during this phase by establishing early perceptions of product or service quality, technological superiority, or advantageous relationships with vendors within the supply chain to develop a competitive advantage.
Growth
During the growth phase more organisations identify opportunities within the industry. The industry experiences more product standardisation at this stage, which may encourage economies of scale and facilitate development for production efficiency. The key issue in this stage is market rivalry. Because there is industry-wide acceptance of the product, more new entrants join the industry and more intense competition results. The duration of the growth stage, as all the other stages, depends on the particular industry. During the growth stage, the life cycle curve is very steep, indicating fast growth, however financial investment remains a significant requirement to facilitate this growth through such activities as marketing, property, plant and equipment investment and ongoing product development (R+D).
Maturity
As the industry approaches maturity and demand for the product or service lessens, the industry life cycle curve becomes noticeably flatter, indicating slowing growth, however profit margins may continue to increase. In mature industries, there are usually fewer organisations, and those that survive will be larger and more dominant. Organisations may compete on quality to separate their product from other lower-cost offerings, or conversely the organisation may try a low-cost/low-price strategy to increase the volume of sales and make profits from inventory turnover.
Decline
Declines are almost inevitable in an industry. If product innovation has not kept pace with other competitors, or if new innovations or technological changes have caused the industry to become obsolete, sales suffer and the life cycle experiences a decline. In this phase, sales are decreasing at an accelerating rate, causing the plotted curve to trend downward. There is usually another, larger shake-out in the industry as competitors who did not leave during the maturity stage now exit the industry. Yet some organisations will remain to compete in the smaller market. Mergers and consolidations will also be the norm as organisations try other strategies to continue to be competitive or grow through acquisition and/or diversification.
Prolonging the life cycle
The life of an industry or organisation can be prolonged through strategic efforts to maximize profits through increasing efficiencies. Management efficiency can help to prolong the maturity stage of the life cycle. Production improvements, like just-in-time methods and lean manufacturing, can result in extra profits. Technology, automation, and linking suppliers and customers in a tight supply chain are also methods to improve efficiency. Alternatively, the strategy may be to differentiate the product or service offering based on quality. Research indicates that those industries and organisations that survive longer are those that are the most strategic, forward thinking and innovative for the duration of the life cycle, often with ongoing and superior commitments to research and development, post entry into the market. In addition, it is those organisations that innovate and develop an industry (early entrants) that tend to survive longer than later entrants to the market. However, it is also important to note that it is the structure of demand which is just as important to industry success as innovation and technological capability.
Conclusion
Many of the large organisations that have closed their doors, or scaled down operations, in Tasmania in recent years have been in the traditional, predominantly manufacturing, industry sectors and generally owned by national or multinational companies. While regarded as ‘institutions’ of the regions in which they were located, it is this length of time of establishment which has contributed to the ultimate closing of the plants in Tasmania. Each has been in the maturity phase of the industry life cycle, and essentially the strategic approach by management has been to increase efficiencies and prolong the industry/organisation by reducing costs and consolidation.
Examples of the issues faced by these companies have included:
• Inability to maximize economies of scale
• Decentralised industry/organisation
• Increased operating costs
• Increasingly uncompetitive due to labour costs and geographical location
• Declining demand
• Lack of ongoing investment in research and development, skills and plant and equipment
• Requirement to innovate and differentiate product offering
• Ageing infrastructure
• Lack of skill base
Wish list for the new Government
Based on the discussions above and to ensure ongoing economic growth and employment opportunities for Tasmanians, the following is a wish list for our newly elected government to consider.
• Cease propping up businesses in the maturity/decline phases of the industry life cycle
• Proactively encourage investment in industries that take advantage of Tasmania’s competitive and comparative advantages
• Support the investment in research and development for Tasmanian based companies in priority industry sectors
• Provide a competitive business environment
• Assist industries/organisations strategic development and capability to adapt in the face of change
• Work with industry, employers and unions to ensure that workers are undertaking ongoing skill and workforce development to enable transfer between industry sectors
• Provide post year 10 education and training aligned with industry needs that will enable Tasmanians to secure employment into the future.
Wednesday, December 17, 2008
Times are changing...
Times are changing. In a relatively short period of time the Australian, Tasmanian and worldwide economic climate has dramatically altered. This climate is yet another unprecedented scenario that requires a strategic, well thought out approach on a global scale and further ads to the challenges of the unprecedented scenario of worldwide population ageing.
While initial reactions are to scale back and batten down the hatches to ride out the storm, it is important to keep a longer term strategy in mind in terms of skill and workforce development.
While the current economic climate and the impact on superannuation investments may delay the retirement intentions of the large baby boomer cohort, they will retire eventually. These baby boomers have a wealth of knowledge and experience, qualifications and skills that cannot be replaced overnight. Sooner rather than later, more people will be exiting the workforce than entering it. It is important over the longer term that investment in skill development remains paramount, so that those remaining in the workforce and those entering it are well equipped, educated and appropriately trained to maintain productivity in the workplace.
While initial reactions are to scale back and batten down the hatches to ride out the storm, it is important to keep a longer term strategy in mind in terms of skill and workforce development.
While the current economic climate and the impact on superannuation investments may delay the retirement intentions of the large baby boomer cohort, they will retire eventually. These baby boomers have a wealth of knowledge and experience, qualifications and skills that cannot be replaced overnight. Sooner rather than later, more people will be exiting the workforce than entering it. It is important over the longer term that investment in skill development remains paramount, so that those remaining in the workforce and those entering it are well equipped, educated and appropriately trained to maintain productivity in the workplace.
Tuesday, December 2, 2008
Women and Work
I have just completed a thesis entitled Women and Work: An investigation of the utilisation of women in the Australian labour market in comparison with men and the impact, if any, of the presence of a partner and/or child.
Abstract: This thesis set out to examine the utilisation of women and women’s qualifications in the Australian labour market as compared with men. It questioned whether the policy proposal of the Commonwealth Government (2004; 2007) to increase the labour force participation rate of women, to offset the emerging gap between fiscal capacity and fiscal commitments resulting from population ageing, could be misguided and could perversely result in lower fertility rates, the very cause of population ageing.
This thesis finds that women are currently not utilised in the labour market to the same degree as men. However, the issue is not their participation rates per se (which have increased over the years) but rather their relatively low level of labour market attachment and utilisation of educational attainment through occupation. For this reason, policy intervention aimed at increasing female labour market utilisation may be a more effective strategy in increasing productivity than focussing on increasing female labour force participation rates as a solution to the potential fiscal impacts of population ageing.
Abstract: This thesis set out to examine the utilisation of women and women’s qualifications in the Australian labour market as compared with men. It questioned whether the policy proposal of the Commonwealth Government (2004; 2007) to increase the labour force participation rate of women, to offset the emerging gap between fiscal capacity and fiscal commitments resulting from population ageing, could be misguided and could perversely result in lower fertility rates, the very cause of population ageing.
This thesis finds that women are currently not utilised in the labour market to the same degree as men. However, the issue is not their participation rates per se (which have increased over the years) but rather their relatively low level of labour market attachment and utilisation of educational attainment through occupation. For this reason, policy intervention aimed at increasing female labour market utilisation may be a more effective strategy in increasing productivity than focussing on increasing female labour force participation rates as a solution to the potential fiscal impacts of population ageing.
Tuesday, November 25, 2008
Job seeker resource document
tasmanianjobs.com has produced a 'Job Seeker Resource Document' for Tasmanian employers resulting from tasmanianjobs.com exhibiting at the Reinvent Your Career Expo in Sydney at the end of October.
This resource document compiles a profile of each of the individuals who are interested in relocating to Tasmania and who completed the expression of interest form on the www.tasmanianjobs.com website during the promotion period leading up to, during and post tasmanianjobs.com exhibiting at the Reinvent Your Career Expo in Sydney on 25th and 26th of October 2008.
Each profile is presented as provided by the job seeker, little alteration has been made to the information provided and therefore more accurately reflects the job seeker.
The purpose of this document is for Tasmanian employers to gain an overview of the skill sets and employment and educational backgrounds of those people interested in relocating to Tasmania. Should Tasmanian employers be interested in any of the profiled job seekers, a complete CV and further information can be provided upon request, including contact details for the individual. It is the responsibility of the employer to screen and verify the individual for suitability and compatibility within the workplace. Requests for CVs can be made to lisa@tasmanianjobs.com or on 0400 190 964.
The job seekers are presented by industry sector, followed by occupation.
Where the job seeker requires employer sponsorship to live and work in Australia, and your organisation is interested in assisting in this process, tasmanianjobs.com recommends that you contact the Skilled Migration Unit at the Department of Economic Development and Tourism for further information and assistance. They can be contacted on 1800 440 026 or at businesspoint@development.tas.gov.au.
Should your organisation employ a job seeker as a result of obtaining the individual’s details through this resource document, tasmanianjobs.com will charge a recruitment fee of $275, including GST.
Should you be interested in receiving a copy of the Job Seeker Resource Document please contact Lisa Taylor at lisa@tasmanianjobs.com.
This resource document compiles a profile of each of the individuals who are interested in relocating to Tasmania and who completed the expression of interest form on the www.tasmanianjobs.com website during the promotion period leading up to, during and post tasmanianjobs.com exhibiting at the Reinvent Your Career Expo in Sydney on 25th and 26th of October 2008.
Each profile is presented as provided by the job seeker, little alteration has been made to the information provided and therefore more accurately reflects the job seeker.
The purpose of this document is for Tasmanian employers to gain an overview of the skill sets and employment and educational backgrounds of those people interested in relocating to Tasmania. Should Tasmanian employers be interested in any of the profiled job seekers, a complete CV and further information can be provided upon request, including contact details for the individual. It is the responsibility of the employer to screen and verify the individual for suitability and compatibility within the workplace. Requests for CVs can be made to lisa@tasmanianjobs.com or on 0400 190 964.
The job seekers are presented by industry sector, followed by occupation.
Where the job seeker requires employer sponsorship to live and work in Australia, and your organisation is interested in assisting in this process, tasmanianjobs.com recommends that you contact the Skilled Migration Unit at the Department of Economic Development and Tourism for further information and assistance. They can be contacted on 1800 440 026 or at businesspoint@development.tas.gov.au.
Should your organisation employ a job seeker as a result of obtaining the individual’s details through this resource document, tasmanianjobs.com will charge a recruitment fee of $275, including GST.
Should you be interested in receiving a copy of the Job Seeker Resource Document please contact Lisa Taylor at lisa@tasmanianjobs.com.
Friday, November 7, 2008
Reinvent your Career Expo Outcomes
As reported last week in InSummary, tasmanianjobs.com exhibited at the Reinvent Your Career Expo in Sydney on the 25th and 26th of October. While still awaiting the final report from the event organisers, tasmanianjobs.com can report that of the 320 (approximate) people that visited the Tasmanian stand during the exhibition, 96 have completed an expression of interest (EOI) for further assistance in finding employment in Tasmania and 42 have registered as job seekers with www.tasmanianjobs.com. Expression of interest forms continue to be completed on a daily basis and job seekers from NSW continue to register on the website.
Of those 96 people who have completed the EOI, the predominant occupations include:
- IT professionals
- Accounting professionals
- HR professionals
- A range of trades, including engineers
Primary reasons for considering relocation to Tasmania include:
- Sea change (getting out of Sydney)
- Housing affordability
- Cost of living
- Employment opportunities
All job seekers advised that they would need to secure employment prior to relocating to Tasmania, or one of the people within a relationship would need to.
The next process for tasmanianjobs.com will be the development of a resource document for Tasmanian employers. This document will profile each of the job seekers, their skill sets, their employment history, educational attainment, preferred location in Tasmania and other professional and personal information. Employers will then be able to request a copy of their complete CV and personal details to follow up with them directly. It is anticipated that this document will be available in late November. Please contact Lisa Taylor for further information, or to register interest in a particular skill set.
The final report from the event organisers will be provided once it is made available to tasmanianjobs.com.
The next Reinvent Your Career Expo will be held in Brisbane in March 2009. If your organisation is interested in further information or participating in future events, please contact tasmanianjobs.com.
Of those 96 people who have completed the EOI, the predominant occupations include:
- IT professionals
- Accounting professionals
- HR professionals
- A range of trades, including engineers
Primary reasons for considering relocation to Tasmania include:
- Sea change (getting out of Sydney)
- Housing affordability
- Cost of living
- Employment opportunities
All job seekers advised that they would need to secure employment prior to relocating to Tasmania, or one of the people within a relationship would need to.
The next process for tasmanianjobs.com will be the development of a resource document for Tasmanian employers. This document will profile each of the job seekers, their skill sets, their employment history, educational attainment, preferred location in Tasmania and other professional and personal information. Employers will then be able to request a copy of their complete CV and personal details to follow up with them directly. It is anticipated that this document will be available in late November. Please contact Lisa Taylor for further information, or to register interest in a particular skill set.
The final report from the event organisers will be provided once it is made available to tasmanianjobs.com.
The next Reinvent Your Career Expo will be held in Brisbane in March 2009. If your organisation is interested in further information or participating in future events, please contact tasmanianjobs.com.
Mixed messages in the labour market
Conflicting data has been released this week in relation to the Australian labour market. Anecdotal evidence also suggests that employers are on tenterhooks and playing the waiting game. Projects are being delayed, apprentices no longer required, permanent recruitment is on hold and demand for temporary or casual labour has increased.
According to the ANZ Job Advertisement Series for Australia, the total number of jobs advertised in major metropolitan newspapers and on the internet fell by 5.9% in October to a weekly average of 231,135 per week. This followed a fall of 1.4% in September.
ANZ Head of Australian Economics Warren Hogan, said: “Total job advertisements continued to fall in October, down 5.9% in the month, to be 9.8% lower than a year ago. As a leading indicator of economic conditions in Australia, the latest job advertisements data suggest the global financial crisis has had a substantial impact on the Australian economy. Internet job advertisements fell 5.5% in October, the third consecutive fall in a row and the fourth monthly decline in the past six months.
This month’s ABS Labour Force series reported a different scenario altogether. Employment increased Australia-wide and in Tasmania, the unemployment rate dropped further to 3.7%, compared with the national average of 4.3%. The participation rate remained stable at 62.6%, total employed increased to 242,000 (167,600 of them full-time) and unemployed decreased by 300 to 9,300 persons statewide.
The ABS Labour Force outcome appears at odds with the ANZ Job Advertisement Series and the broad-based slowing in economic activity and is most likely an example of the volatility of the monthly surveys and the lag time required to provide a true reflection of the labour market.
At this stage, this data confirms that at best Australia has experienced only a very moderate response from the labour market to weakening economic conditions and prospects. However, most economic commentators believe the worst is yet to come, consistent with the downward trend in forward-looking indicators and the now weaker economic outlook.
That said, Tasmanian indicators suggest that the magnitude of the impact will not be as significant as in other Australian states.
According to the ANZ Job Advertisement Series for Australia, the total number of jobs advertised in major metropolitan newspapers and on the internet fell by 5.9% in October to a weekly average of 231,135 per week. This followed a fall of 1.4% in September.
ANZ Head of Australian Economics Warren Hogan, said: “Total job advertisements continued to fall in October, down 5.9% in the month, to be 9.8% lower than a year ago. As a leading indicator of economic conditions in Australia, the latest job advertisements data suggest the global financial crisis has had a substantial impact on the Australian economy. Internet job advertisements fell 5.5% in October, the third consecutive fall in a row and the fourth monthly decline in the past six months.
This month’s ABS Labour Force series reported a different scenario altogether. Employment increased Australia-wide and in Tasmania, the unemployment rate dropped further to 3.7%, compared with the national average of 4.3%. The participation rate remained stable at 62.6%, total employed increased to 242,000 (167,600 of them full-time) and unemployed decreased by 300 to 9,300 persons statewide.
The ABS Labour Force outcome appears at odds with the ANZ Job Advertisement Series and the broad-based slowing in economic activity and is most likely an example of the volatility of the monthly surveys and the lag time required to provide a true reflection of the labour market.
At this stage, this data confirms that at best Australia has experienced only a very moderate response from the labour market to weakening economic conditions and prospects. However, most economic commentators believe the worst is yet to come, consistent with the downward trend in forward-looking indicators and the now weaker economic outlook.
That said, Tasmanian indicators suggest that the magnitude of the impact will not be as significant as in other Australian states.
The Tasmanian Skills Institute
From next year TAFE Tasmania will effectively be split, seeding two new state-wide entities, The Tasmanian Skills Institute and the Tasmanian Polytechnic. This move reflects the changing face of skills and training, with two fairly distinct streams of activity- workforce development for employees and employers, and training for people seeking to learn skills for entry into a field of work.
The Tasmanian Skills Institute will deliver to the first group and have as its foundation TAFE Tasmania’s strong record over recent years. A significant difference will be that its singular focus of activity will allow the Skills Institute to more fully understand the business needs of its enterprise customers and thereby enhance the value of the skills that it teaches its students. To achieve this it has a number of key strategies:
- It will have a demand-facing culture with new senior positions focussing on customer relationships and effective service delivery;
- It will have an emphasis on workplace delivery and assessment, building on TAFE’s nationally recognised track record;
- It will encourage creativity amongst its staff to work with customers on innovative, cost effective and productive workforce development activities;
- The quality of its products and services will remain a top priority, with excellence in vocational skills and training being a core organisational value;
- It will align itself with its business customers by itself having a growth and productivity focus
It will be governed by a board of Tasmanian directors all with extensive and diverse experience in the corporate and SME sectors working with a small but highly regarded and experienced senior executive team.
Further information is available on 1300 362 175 or at www.thetrainingenterprise.com.au
NB Lisa Taylor is a Director on the Board of the Tasmanian Skills Institute.
Monday, November 3, 2008
ANZ Job advertisement series
According to the ANZ Job Advertisement Series, the total number of jobs advertised in major metropolitan newspapers and on the internet fell by 5.9% in October to a weekly average of 231,135 per week. This followed a fall of 1.4% in September. The total number of advertisements in October was 9.8% lower than 12 months ago.
Looking at the different channels for advertising jobs, the number of job advertisements in major
metropolitan newspapers decreased by 12.2% in October to an average of 13,350 per week.
Newspaper advertisements are now 34.7% lower than in October 2007.
The large fall in newspaper job advertisements in October was driven by declines in all states and territories. The largest fall in percentage terms was in Western Australia (-14.8%), followed by Queensland (-14.1%), the ACT (-12.8%), New South Wales (-11.9%), Tasmania (-11.4%), Victoria(-11.0%), South Australia (-5.7%) and the Northern Territory (-4.7%).
ANZ Head of Australian Economics Warren Hogan, said: “Total job advertisements continued to
fall in October, down 5.9% in the month, to be 9.8% lower than a year ago. As a leading indicator
of economic conditions in Australia, the latest job advertisements data suggest the global financial crisis has had a substantial impact on the Australian economy. Internet job advertisements fell 5.5% in October, the third consecutive fall in a row and the fourth monthly decline in the past six months.
“The real weakness has been in newspaper advertising. Newspaper job advertisements fell 12.2% in the month of October and are now down 34.7% in the past year. Annual growth in newspaper ads is now the weakest since 2001. The economy avoided recession then but the unemployment rate rose by a percentage point (from 6% to 7%). The only weaker outcomes for newspaper job advertisements over the past 30 years were in 1991 and 1982 when the economy experienced recession. This will be an important indicator of the extent of the looming downturn in the Australian economy and the likely trajectory for unemployment over the next few years.”
Looking at the different channels for advertising jobs, the number of job advertisements in major
metropolitan newspapers decreased by 12.2% in October to an average of 13,350 per week.
Newspaper advertisements are now 34.7% lower than in October 2007.
The large fall in newspaper job advertisements in October was driven by declines in all states and territories. The largest fall in percentage terms was in Western Australia (-14.8%), followed by Queensland (-14.1%), the ACT (-12.8%), New South Wales (-11.9%), Tasmania (-11.4%), Victoria(-11.0%), South Australia (-5.7%) and the Northern Territory (-4.7%).
ANZ Head of Australian Economics Warren Hogan, said: “Total job advertisements continued to
fall in October, down 5.9% in the month, to be 9.8% lower than a year ago. As a leading indicator
of economic conditions in Australia, the latest job advertisements data suggest the global financial crisis has had a substantial impact on the Australian economy. Internet job advertisements fell 5.5% in October, the third consecutive fall in a row and the fourth monthly decline in the past six months.
“The real weakness has been in newspaper advertising. Newspaper job advertisements fell 12.2% in the month of October and are now down 34.7% in the past year. Annual growth in newspaper ads is now the weakest since 2001. The economy avoided recession then but the unemployment rate rose by a percentage point (from 6% to 7%). The only weaker outcomes for newspaper job advertisements over the past 30 years were in 1991 and 1982 when the economy experienced recession. This will be an important indicator of the extent of the looming downturn in the Australian economy and the likely trajectory for unemployment over the next few years.”
Friday, October 31, 2008
interstate perspective of tasmania
Last weekend tasmanianjobs.com exhibited at the Reinvent Your Career Expo in Sydney. The objective was to promote employment and lifestyle opportunities in Tasmania to qualified, skilled and experienced people considering a sea/tree change to Tasmania.
For the two days of the expo, we were swamped with people enquiring about Tasmania. We anticipate that between the two of us, we spoke to 200+ people each day and ran out of our generic marketing material by early on the second day. The organisers advised us that we were probably the busiest stand, and we certainly had a stand out one visually, as per the photo above.
We received very good media coverage leading up to the Expo, so many of our initial visitors specifically came to see us as a result.
On the other hand, those that had not considered Tasmania as a place to live and work provided some interesting insight into the perception of Tasmania interstate.
Firstly, 100% of people we spoke to were surprised that there were employment opportunities in Tasmania. 100% certainly wanted to visit Tasmania as a tourism destination, if they had not done so already. Those that had, loved Tasmania. No one had considered Tasmania as a state in which to have a meaningful career.
100% of the people we spoke to were at the Expo because 'they wanted to get out of Sydney'. The main reasons cited included housing affordability, cost of living and transport/commuting distances. Many people wanted to live in the country but work in the CBD.
The majority of the people we spoke to were couples; of a range of ages, predominantly younger with children or older; hetrosexual as well as same-sex couples. Many were also mixed race. In addition, there were a number of older (40+) single women, highly qualified and experienced.
I was often asked 'Is Tasmania racist?' or 'Is Tasmania homophobic?' I had never given much thought to this, so found it difficult to answer but would hope that we as a state are more inclusive than we may previously have been.
In any case, I think there are certainly untapped opportunities for Tasmania to attract skilled workers to the state from 'the big Island', but a lot of work needs to be undertaken to improve the perception of Tasmania to our mainland counterparts.
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