Media Release - June 22 2009

Key Survey Findings

• 51% of employers believe their staff numbers will remain stable over the next 12 months. Only 16% forecast an increase in headcount
• 49% of employers believe business conditions will improve by the end of 2009. 27% think an upturn is unlikely and 24% are unsure
• To avoid job cuts, 35% of employers have frozen salaries, 18% have introduced forced paid leave and 9% have reduced working hours
• 51% of respondents believe the most effective retention strategy in the current market is strong leadership. 31% think it is transparent communication and 14% cite workplace flexibility

Sydney, 22 June 2009: The white-collar employment market is showing signs of stabilisation but this is yet to translate into new job creation, according to a survey conducted by global recruitment firm Michael Page International.

The Michael Page Salary and Employment Forecast, which incorporates responses from over 400 senior managers from Australia’s corporate sector, reveals 51% of respondents believe their headcount will not be reduced further over the next 12 months. This suggests employment levels are stabilising after the sharp cuts that occurred in sectors such as financial services during the second half of 2008.

While this is an encouraging sign it points to employment market stabilisation rather than recovery. For a recovery to occur new jobs must be created and only 16% of respondents believe this will happen over the year ahead. Business confidence levels are still too low for employers to invest in new job creation. Only 49% of respondents predict improved conditions by the end of 2009, with 27% forecasting no improvement and 24% still unsure.

"Employment conditions are more stable now than six months ago. There’s more certainty in the marketplace and we’re seeing tentative increases in contract activity which is a positive indicator. But this is not yet translating into jobs growth. This will only occur after a sustained period of improvement in consumer and business confidence. We’re not there yet," said Phillip Guest, the regional managing director of Michael Page Australia and New Zealand. Events over the last 12 months have temporarily obscured the skills shortage but employers still recognise the importance of staff retention. To avoid staff cuts many companies have pursued alternative strategies of payroll cost reduction. Our employment survey reveals 35% of companies have frozen salaries, 18% have implemented forced paid leave and 9% have reduced working hours.

"Our advice to employers is that staff retention is even more important during a downturn. Companies should not operate on the assumption that the skills lost will be readily available when they are required again. In our experience the companies that continue to invest in business critical skills are the ones to gain market share in the first stage of the upturn," Mr Guest said.