Australian Executives are facing a dilemma. They strive to have an engaged workforce. However, due to a confluence of macroeconomic factors in Australia, this is proving to be quite a challenge.

The difficulty in attracting and engaging Millennials into traditional organisations is well recognised. Australia continues to be the envy of the western world for avoiding a recession during the Global Financial Crisis (GFC). Can it maintain this momentum with high wages and cost of living in the major cities? The high cost of living increases the ‘stress’ level of staff. To remain competitive, all companies, from start-ups to multinationals are using outsourcing and technology to reduce costs. This has a side-effect to the remaining workforce and I call the distress of insecurity.

Is there a panacea?

Millennials - Want it all

The first challenge in the Australian workplace is the task of hiring talented Millennials into traditional organisations. Millennials are generally accepted as those born between 1982 and 2002. According to Matusen and latest Deloitte survey, there are three approaches organisations can adopt to attract Millennials.

• People and Purpose – Millennials are attracted to organisations who can articulate their purpose (or contribution) and provide career development.
• Development – Continual development opportunities is much more than a training program. Customised development programs based on profiles of staff will attract and retain talented employees. This is a stark contrast to a ‘one-size-fits-all’ approach.
• Leader Profiles – Millennials are less interested in well-networked, visible, technical leaders. Instead, they prefer strategic thinkers, inspirational, personable, and visionary leaders.

To attract top talent, organisations need to sell their strengths to the labour market. This is demonstrated in the HR trends for the year.

What Goes Up Must Come Down – Except in the Land of Oz

The economy fluctuates between growth and recessionary cycles. This can be explained by the ‘irrational exuberance’ in good times, famously coined by former chairman US Federal Reserve Alan Greenspan, where people borrow too much, inflate prices, and fail to repay their debts. Australia is nearing on the world record for longest period of continuous expansion since 1971.

Over the last 24 years, a combination of foresight and luck has kept Australia on a path of continued growth. The foresight is mainly thanks to the deregulation of the currency peg, banking reforms, industrial accords, tariff reduction, and GST introduction. When the Asia crash occurred in the late 90’s, the collapsing dollar helped stabilise the economy.

Conversely, the good fortune was due to China. Coming out of the cold war communism China applied communist capitalism to raise the living standards of the largest population in history. This further alleviated the most number of people from extreme poverty.

Australia possessing the key raw ingredients to the growth of China, reaped many rewards. Unlike nations like Norway, Australia didn’t save the excess surplus in a sovereign fund. Instead, the fortune was returned to the public through tax cuts and generous tax concession on capital gains.

The continued growth also means cost of living and wage rises. At peak of the mining boom, Australia had 3 cities which were the most expensive cities in the world. Sydney remains as one of the most expensive cities in the world. The tax cut over the years has been eroded together with higher housing and living costs. To reduce housing costs staff are travelling further to find affordable housing. This leads to greater commuting time and ‘stress’ during peak hour which can be correlated with the rise of stress-related absenteeism in Australia.

Outsourcing is not a Dirty Word

Organisations today compete in a global marketplace. To remain competitive, all avenues are investigated to reduce costs and raise the margins. If a company does not look to adapt to changes, they may no longer exist with an ever-changing, mature, and open market like Australia.

With the raising education standards of developing nations, coupled with technological advancements, opportunities to outsource the non-core functions to other parts of the world are appearing. While Business Process Outsourcing (BPO) was once limited to call centres and IT Support services, there far more value added roles within the organisation being outsource today. For example, Optus is expressing to outsource the whole Finance and HR Functions and are seeking bids from leading outsourcing firms like Infosys and Accenture.

When whole departments are about to disappear, how engaged do the staff feel? Even when some of the roles are being moved across overseas, the organisations face a challenging to keep existing staff engaged.

Innovation Boom, Really?

Prime Minister Malcolm Turnbull championed innovation in the recent federal election. However, the media consensus highlighted how many people were scared about innovation and changes advocated. Technology is changing at an ever increasing speed. Organisations are using innovation as part of the toolbox of changes to remain competitive. The question is: is this being well communicated to the various teams within the organisation?

External threats like Digital Cameras to Kodak Eastman, or Wikipedia to Encyclopaedia Britannica are difficult to counter, especially when thousands of jobs are based on the existing model. General Motors’ experiment of an electric car failed even though the car maker was leading the race at that time. Today, Tesla is the recognised disruptive leader in this segment.

Then in other cases, software comes along replacing the number of staff performing certain roles. Even creative roles, like digital designers, are now challenged with design platforms like the world popular Canva.

Both outsourcing and abrupt changes through innovation left un-checked, can cause distress to many employees. The challenge for organisations is maintaining the engagement whilst having genuine conversations about the disruption.

Conclusion

Executives who are looking to create a longer term legacy can utilise new models to measure the impact of the organisation, as a whole. These approaches help organisations measure the contribution of the People, the Planet as well Profit – which goes beyond the Corporate Social Responsibility. Using these approaches will raise authenticity of a company, both internally and externally to clients and suppliers.

A focus on Profit alone, with the neglect of the other two P’s is like Aesop’s ‘The Goose and the Golden Eggs’, which shows the eventual destruction of value for the shareholders.