On the eve of a controversial national election in Australia that could have a profoundly negative impact on the financial services sector if the current government is ousted, the industry’s only labour body, the Finance Sector Union (FSU) is warning that up to 4,000 finance jobs could be lost this year.
Leanne Shingles, media and communications manager for the FSU, says 2,000 jobs have been cut already this year, and the union is expecting at least that number again of jobs to be offshore or made redundant by the end of 2013, based on recent feedback from members.
“Finance workers are telling us that job insecurity is at its highest level ever, which is bizarre given that bank profits are at an all-time high. People are very fearful about losing their jobs. On-going restructuring, and the manner in which it is being done, is very unsettling.
“Then there is also ‘spill and fill’ – where companies advertise all jobs in a specific department, and invite the incumbents to apply for their own jobs, but the intention is a reduction in headcount.”
Shingles says technological advances have also had an impact on roles, and some organisations have been offshoring functions like payroll, document processing, call centre operations and human resources.
Andrew Hanson, director, Robert Walters in Sydney says there has indeed been some offshoring in certain roles, but points out that there has also been some hiring by the larger Australian banks for back office roles, particularly those that support retail and business banking.
“There is a slightly more positive trend across the globe. Our global offices are seeing an uptick in sentiment an increase in recruitment. And what happens in other global centres has an impact in Australia. There isn’t about to be a huge boom but things are a bit better.”
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The Finance Sector Union's annual research suggests that since 2008, when the surveys started, 20,000 jobs across all sectors were offshored each year, with thousands of financial sector roles among them.
Shingles says these are mainly back office positions, and recent trends in the banking industry indicates that this is the path the banking and insurance sector is on, “with the exception of Australia’s most profitable bank, Commonwealth Bank, and some insurers such as GCU”.
Hanson says there is still a lot of caution around hiring in the finance sector.
“Companies are very cost conscious, and they’re trying to reduce spend.” This has led to some pressure on salaries, particularly those of senior and middle management, and some candidates have taken cuts in the cash packages of around 10% to return to employment.
“For the most part, however, salaries have stayed flat except in those segments of the industry where it is a buyer’s market.”
Australia’s economy may also tilt into recession, and the FSU believes that if these predictions are correct, then the contraction in job numbers will be even more dire.
“Remember, we have had lay-offs even during the last 22 years of continuous economic growth.” Members of the Labour Party, which is struggling to win voter favour and may lose to a Liberal-led coalition, have committed – on video - to support the FSU’s five-point plan to protect finance jobs.
Members of the two other leading parties that would form part of the Liberal-National coalition , declined the invitation to go on camera, Shingles said.
The FSU is concerned that a Liberal-led coalition government will repeal statutory compensation, which has helped finance workers cope with Australia’s high cost of living.