The rapid rise in the employment of executives over the past last three months has taken a pause falling by two percent in a reflection of the uncertain times, according to a new report from E.L. Consult.
This uncertainty is being created by China trade shenanigans, US Presidential elections, and of course, Covid.
Employers cannot be blamed for slowing down their executive employment programmes right now and even if they wanted to there are many factors that make hiring difficult.
Front and centre of this is the is COVID 19 induced “work from home” trend. Something many employees are privately hoping may become a permanent fixture.
“This is highly unlikely and while there may be some employee resistance to moving back to the office, companies are realising that after the initial rise productivity is now dropping rapidly. said Grant Montgomery, CEO of E.L Consult, the executive search firm that produces the lead economic trend indicator the E.L. Index.
“The COVID-19 pandemic has been said to have brought on a digital revolution five years earlier than would have been predicted.
“The list of positives is great. No alarm clocks, no dressing up for work, no commute, but the negatives are greater.
“Corporations exist as communal groups with its members working as a team collaborating on projects, solving problems, and training each other with shared experiences.
“Any client who has had to deal with a service industry home working executive knows that the phone experience can be unproductive and very often unpleasant.
“Home workers operate in a corporate vacuum. They cannot confer easily with the colleagues and are less able to make on the spot decisions.
“If you are OK with form responses and computer app decision making, then OK, but few clients go away feeling satisfied and when it comes to sales nobody enjoys a telephone sales call. That was destroyed by Mumbai long ago.
“Interestingly some years ago IBM led the world with over 30 percent of their employees working from home but when they got into trouble and had to rebuild their businesses they saw that it was an experiment that the new and innovative companies were not embracing and they were being left behind because of it.
“Immersion in a corporate culture provides continuous product training and drives corporate goals that cannot be imparted between people who never physically meet, and many business leaders are now discovering this. The more you work from home the less efficient companies become and more difficult it makes for businesses to grow.
“You cannot take on a new employee and hope to train them by phone and Zoom to be an effective team member or leader.
“Sure, things can potter on for a while as the home working executive has often years of corporate experience and are drawing this down as they work from home. This corporate equity is a finite resource that is not replenished by home isolation.
“This is affecting the way that big companies are doing business. Take the banks. In the past they used to analyse risk through loan committees and build long term lending relationships realising that a customer can be unique and not easily satisfied with a computer app decision.
“With bankers working from home there has been a major revolution in simplifying decision making to now where a computer programmer has built a series of applications based on some very simple analysis of monthly income.
“These computer applications which define responsible lending into a childish concept of an employee on a fixed salary and ignore asset backing is leading to a decline in Bank loan books, reduced bank turnover and profitability and forcing small businesses to seek capital elsewhere.
“Working from home and the product simplification it demands is affecting growth levels across the economy.
Mr Montgomery said the Executive Demand Index fell two per cent in October compared to the prior month.
“At the time of the survey there was a great deal of uncertainty as to where the US was going and where China was going in terms of tariff changes.
“It is also unclear whether we are going to be clear of COVID-19 by Christmas. Victoria was in a position of lockdown still at the time of the survey.
“However, given the reduction was only 2 per cent and that there was so much uncertainty it could be said that the result was relatively good.
Among the sectors, Engineering was the best performer. Marketing followed behind, while Information Technology was negative for the month.
Among the larger states, Victoria again produced the strongest gain. Queensland and New South Wales were negative. Among the smaller regions, Western Australia was strong, as was South Australia and the Northern Territory.