A recent Sunsuper report into the Australian job market has revealed that revelations from the Hayne royal commission have hit the financial services market hard, with demand for jobs in the industry down 9.6 per cent year-on-year.
The report, (formerly the Kinetic Super Job Index), flagged financial services as the “weakest performing industry of 2018”. Sunsuper chief economist Brian Parker says the decline in employment demand within the industry came as no surprise.
“The royal commission and its aftermath seem to have an ongoing impact on employment demand and career opportunities in the sector,” Parker says in a statement.
There is a silver lining for the industry, he continues, as the decline flattened out in the latter half of 2018 and even returned to positive territory in December.
“The only comfort from these results is that demand started to stabilise in the last quarter of 2018 (growing 1.6 per cent), suggesting that the worst may be over and some rebuilding may occur in the year ahead,” the statement reads.
Speaking to Professional Planner, Parker says that while it is “too early to tell”, he suspects the final recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, due for release on Monday, won’t bring about another serious decline.
“We certainly can’t rule it out,” Parker says. “But the fact that there has already been a pick-up so close to the royal commission’s final report suggests that the worst might be over. The recommendations may be confronting but it’s unlikely they’ll be worse than what we’ve already seen and heard.”
Similarly, Parker doesn’t see a probable change in government as reason to think financial services roles will diminish.
“Is a Labor government going to make the environment for banking and finance noticeably worse than it is?” he asks. “The answer is no, I don’t believe that would be the case.”
The Sunsuper Australian Job Index “measures and tracks digital job advertisements on job boards, employer career portals and recruitment company websites”, the report states.
Fabian Ruggieri, a senior consultant at Kaizen Recruitment, says that while the banks’ exodus from wealth management is a factor, movement in the insurance sector is also to blame for the decline. He pinpoints the recent consolidation of life-insurance companies and “reduced insurance commissions for financial advisers” as decisive factors. Parker agrees.
“The effect of the insurance industry here is likely,” Parker says.
A structural shift
Parker acknowledges other global trends that have shaped movement in the survey – including technology.
“The influence of technology is interesting,” he says. “One of the things that comes out of the survey is a large shift in jobs away from clerical and administrative roles and towards professional services jobs.”
The survey notes this “structural shift in white-collar occupations”.
“The clerical and administrative workers index fell 2.4 per cent in 2018 while demand for professionals rose by 16.2 per cent,” Sunsuper’s statement reads. “What we are seeing is a gradual elimination of more process-orientated roles and replacement by more senior roles requiring higher skills.”
The largest increase in advertised roles came in the category for community and personal service workers, with a 30.6 per cent rise in ads year-on-year. Machine operators and drivers take up the largest portion of ads in the survey, followed by technicians and trades, then professionals.