E.L Index: Executive Employment Trends in Australia – December 2024

The executive job market has resumed its long-term negative trend as the government now cuts its multi-month budget splurge, according to the E.L. Executive Demand Index.

The E.L Index fell a further 12 per cent in November, losing all of the gains made in the middle of the year that were powered by increasing government employment.

Mr Grant Montgomery, Managing Director of E.L Consult, a leading executive search firm that has researched and published the E.L. Executive Demand Index for over 30 years, said: “Remember the couple of months of boom in executive positions in September and October as government went on a recruitment drive? This bumped up employment figures and satisfied the big government whims of the Labor party.

“But this couldn’t go on forever and the E.L Index has now fully corrected itself.

“The E.L Index is the only employment index that continuously analyses differences in business and government sector hiring and showed the boom in senior jobs was purely the result of a big government spend.

“There is nothing wrong with that, particularly if you won a secure government job as result, but there is a lot wrong with it if you were hoping for an improvement in the Australian economy,” Mr Montgomery said.

“But a big government spend will result in – guess what? – more government workers looking to prove their worth and therefore more bureaucracy. More bureaucracy means more red tape and that means more restrictions on business innovation.

“By its very nature this badly affects productivity, that important 12 letter word that the government has evidently now banned.

“More red tape and more government intervention is the antithesis to productivity.

As the E.L index only picks new hiring then the November and December E.L Index results showed the inevitable – a big flurry in government hiring followed by the inevitable fallout.

“No matter how hard you spend you simply can’t hire more and more government executives. There is a limit and spending like that must stop eventually.”

High government spending and reduced productivity does mean increased inflation. And that means no interest rate relief anytime soon.

“In contrast, McKinsey has reported that business investment is at recession levels and Australia’s productivity growth is now 30th out of 35 rich countries.

“Annual GDP growth has slumped to the weakest rate since the early 1990s recession (outside the COVID-19 pandemic), and the seventh straight quarterly decline in GDP per person.

Most states and territories fell, led again by Queensland among the large states and this time the ACT among the smaller regions.

Among the sectors, Information Technology was the only one to record a positive result, probably due to the fervour around AI. Management and Marketing were the weakest, with Management affected by a reduction in government sector positions.

The Management sector saw a significant decrease in November, dropping 15 per cent after the 20 per cent drop in October.

The Management sector is now at the bottom of its recent trading range, having been affected by a reduction in government sector positions that previously increased.

All states and territories fell in the month. Government-funded positions were the weakest in the print-based territory.

Marketing has dropped away sharply, losing 15 per cent to reach its lowest point since December 2023.

Amid the states and regions, New South Wales and Victoria fell 11 per cent and 17 per cent respectively.

Private sector web-based ads were lower but, intriguingly, government sector web-based ads were stronger.

Overall, the Marketing index has been largely flat since before COVID.