News  The current state of the market - June 2009

The current state of the market - June 2009
3/06/2009

The Signium Comment

What's Up Now?

The information we are getting from all sources is that the employment market at an executive level is starting to move. Decisions are being made to reposition the leadership capabilities rather than doing nothing as a reaction to the tight market conditions. Clearly our knowledge is focussed at the executive end of the market. We believe it will be some time before we see any real change at the middle management and lower levels. There may still be some redundancies but we suspect that some of these will be small, structural changes.

We liken companies to hovercrafts. Many are getting the confidence to lift off the ground but are not yet ready to move ahead in any one direction. The terrain is still a little uncertain. Which market sectors are ready to buy? If their client is just restocking, how sustainable is this going to be? This is not happening in all sectors. Tourism is still at the bottom of the trough, more houses need to be built to meet population and immigration requirements and infrastructure projects will be defined over the next few months hopefully getting the non-residential sector moving forward.

Infrastructure Sector

Speaking of infrastructure, we will soon see real global competition for experienced, skilled leaders. This will be particularly felt by companies who are tapping into the global human resource market in response to Governments throughout the world boosting their economies through infrastructure investment and development. The slack that is in the system at present will be absorbed and then potentially depleted. At present companies in the engineering sector are still not finding the specialist technical expertise and leadership they need. Advertised vacancies that have remained empty for 5–6 months will only get worse, especially for New Zealand companies hiring from overseas.

In the second half of 2009 we can expect an acute global demand for these specialist skills to design and build infrastructure. With our compressed, or should we say, repressed, remuneration levels in New Zealand, we may have a difficult time competing for global talent. We will need to meet global market compensation and/or have an employment brand that meets or beats the other global players in order to remain competitive.

Governance

Organisations are still reviewing the composition of their Boards to strengthen governance, as the demands on Directors in this economic climate are greater than in the past – some are carrying too many directorships to contribute effectively and reducing their portfolio.

A Reflection

What are you doing in your industry? Who do you listen to, the optimists or the pessimists? Or are you taking the old man’s original glass half-full point of view and focusing on customer needs?

Whatever the economic climate, companies need to be focused on getting the best value from all their resources. Delivery comes via

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We are passionate about finding and developing the leadership talent of tomorrow for our clients. Our performance is as vital for the successful development of our clients' businesses as it is for our own.

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