Hiring continues but wage growth under pressure

The Royal Commission inquiry and the state of the property market has not dampened the financial services sector's positive hiring intentions over the next three months, recruitment firm ManpowerGroup says, but there are challenges.

The finance, insurance and real estate sectors signalled intentions to increase headcount, registering 15 percentage points to the ManpowerGroup's net employment outlook index that surveyed over 59,000 employers globally, including 1,500 in Australia.

While this is slightly worse than the December 2018 quarter outlook, it remains steady compared to 1Q18.

The Royal Commission into the banking sector has failed to significantly affect hiring intentions while the decline in property prices across the country has also failed to dent the employment outlook across the sector, ManpowerGroup said.

The mining and construction sector has the strongest employment outlook at 22%, while sentiment in the wholesale and retail sector sits at 13%.

Latest Australian Bureau of Statistics show the nation's unemployment rate fell from 5.2% to 5.1% as at November 2018.

Australian Chamber chief executive James Pearson said: "In the last year we have seen increases in employment and average monthly hours that are above 20-year averages, which is a good sign for the health of the labour market."

Despite the positive story in these figures, Pearson noted that "the trend underemployment rate, which measures those people who want more hours of work, is stuck."

"It will be hard to achieve stronger real wage growth without an improvement in underemployment. There is still spare capacity in the labour market.

"We need to encourage businesses to offer more hours of work, and to do that we need policies that encourage them to invest and to grow," Pearson said.

Read more: ManpowerGroupRoyal CommissionAustraliaJames PearsonAustralian Bureau of StatisticsABS
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