Early signs of slowdown emerge

Written by: John McCluskey, Managing Director Whizdom, APSCo Director

For the first time in over 3 years, we are seeing some extra capacity in the market with Recruitment Consultants. In the recruitment industry, this shift is reminiscent of the proverbial “canary in the coalmine” historically used as an early warning system to detect dangerous gases and elevated risk to workers.

The underlying premise is that if Recruitment Consultants are being let go, it suggests a decrease in work opportunities and less work for recruitment agencies.

A similar trend is evident with internal recruitment being scaled back as inhouse recruitment requirements are reduced or staff are being offered redundancies within many IT Industry organisations.

However, it is crucial to consider other factors influencing these shifts. The rapid emergence of AI being used as a productivity tool in recruitment and hiring processes alongside its broader adoption in the business world, is automating certain human processes.

Additionally, global economic conditions are signalling a slowdown potentially leading to a recession. Recent changes in Industrial Relations are adding complexity and uncertainty to the mix.

On top of these challenges, businesses are grappling with higher operational and interest costs while striving to maintain profitability.

In the coming months, it will be interesting to see if business start to invest or continue to rein in spending.

While there is no need to panic, there are some positive signs such as flattening of interest rates and a sustainable but slightly higher unemployment rate.

Resilient businesses and effective leadership often come out stronger amidst challenging operational conditions.

Locally in Canberra, we have noticed a market slow down, however with the establishment of the Federal Government People Panel phase 1 (permanent placements) and more recently phase 2 (labour Hire), this may stimulate hiring requirements within some government departments.

The government has signalled a shift away from reliance on consultancies and labour hire, for what is referred to as “above-theline work ” We should see the consequences of this fall out in the local market over the next 6-12 months.