Data shows a big boom in temporary contracts

Temporary contracts are on the rise, with organisations showing more caution in their recruitment approach.

JobAdder’s recent report has revealed the latest trends in the recruitment industry, showing that organisations are taking a much more cautious approach to hiring new talent. Instead of being burnt from the hiring frenzy in recent years, businesses are leaning towards offering candidates temporary positions, resulting in a fall off of permanent job positions.

The decline in permanent job placements highlights a cautious job market as businesses shift towards a more flexible model. The data shows that for permanent roles, there was a consistent negative trend throughout the year, dropping from -2.7 per cent in Q1 2023 to -6 per cent in Q3 and -3.6 per cent in Q4.

Despite this caution across the job market, many employers still have hiring needs, but they are going about the process in a more cerebral and thoughtful way, evaluating each new permanent hire for legitimate needs and holding recruiters more accountable for hiring success.

Average jobs created per account for agencies have steadily declined, dropping from 61.61 in Q2 2023 to 55.44 in Q4 for Australia. In terms of job applications, there was a dramatic increase received per job over the year. For Australia, recruitment agencies increased from 17.7 applications per job in Q4 2022 to 31.7 in Q4 2023. Talent acquisition has risen from 24.9 in Q1 2023 to 32 in Q4 2023.

JobAdder chief executive Martin Herbst stated: “The decrease in permanent roles during the year indicates a significant shift in the employment landscape. Economic conditions have undoubtedly played a role in this pattern, with downturns potentially influencing employment stability.”

“However, you can’t overlook the shift towards more flexible employment models as a contributing factor. This plays into the evolving nature of work, as businesses and employees may opt for more flexible arrangements like contract or part-time roles. It doesn’t necessarily signify a decline in job opportunities overall but rather a transformation of what employment looks like.”

Herbst explained the possible issues that could arise in the job hiring process if employers continue down this path.

“Even with the rise in applications, these roles are becoming more challenging to fill. Employers are becoming more selective; decision-making processes are slower; and the criteria for a suitable candidate is more niche and trickier to meet, making the recruiting process more complex,” Herbst said.

“However, the current market does not indicate that there are no jobs available to fill; there is more so a need for recruiters to expand their role and be more strategic.”

Talent and recruitment manager Mitch King rounded it off, speaking on the implications for talent teams and businesses in 2024.

“2024 is going to be an interesting year for internal talent teams. An increase in blended workforces is certainly something to expect this year. The increase in temp hires will likely continue as companies deal with reduced headcounts, causing employees to be thinly stretched, opening the door for freelance and temporary staff to come to the rescue,” King concluded.

“This also ties into a trend I expect to see more of on the candidate side; more talent will move away from traditional single-income and permanent employment and instead venture into the world of freelancing or, as we’ve started to see it more commonly referred to, ’fractional employment’.”