Australian employment steady in July, Victoria suffers setback

 Australian employment was steady through July, weekly data showed on Tuesday, though the southeastern state of Victoria, which is grappling with a fresh wave of coronavirus infections, suffered a setback.

FILE PHOTO: A worker walks through the archway of a historical building as he delivers parcels in central Sydney, Australia July 25, 2017. REUTERS/David Gray

The number of payroll jobs nationwide eased 0.1% in July while Victoria recorded a fall of 1.5% as strict mobility restrictions and curfews came into effect, data from the Australian Bureau of Statistics (ABS) showed.

“With stage four restrictions now in effect, we anticipate further job losses across (Victoria), particularly in vulnerable sectors such as hospitality and retail,” said Callam Pickering, an economist at global job site Indeed. “Recovery won’t be possible until restrictions are eased.”

The release, an experimental series, differs from the monthly official employment data and is based on wage payment figures from the Australian Taxation Office (ATO).

The monthly figures, due later this week, are expected to show a jump in the national jobless rate to a 22-year high of 7.8% even though employment is expected to rise by 40,000, according to a median forecast of economists in a Reuters poll.

Australia had seen a surge in job growth in the past couple of months as authorities largely managed to control the spread of the virus and began re-opening the economy. That helped recoup many of the jobs lost due to the coronavirus.

Tuesday’s data showed payroll jobs still remained 4.5% below mid-March when Australia recorded its 100th confirmed COVID-19 case.

Other data also pointed to the hit to Victoria from the renewed wave of coronavirus infections.

A measure of Australian business conditions rose in July though confidence was badly hit in Victoria.

A separate weekly survey of consumer confidence from ANZ also out on Tuesday showed sentiment had slipped for a seventh straight week as the latest lockdown took a heavy toll on Victorians.

Teenagers scratching for cash during the coronavirus pandemic have copped it with both barrels, losing their jobs and pocket money.

One in seven Australian teens have lost their jobs during the pandemic and the same amount has had their hours cut.

Parents struggling to make ends meet have also turned off the financial tap or stopped paying for their children's' mobile phones.

The Financial Basics Foundation surveyed 1000 parents and teens as part of Suncorp's push to improve the decisions people make around handling money.

More than half of teenagers have been unaffected by the financial crisis.

But between 13 and 15 percent have been sacked, had their shifts slashed or pocket money stopped.

Two percent of teenage respondents have given up their mobile phones.

A quarter of parents feel very anxious about their child's financial future and have not shared their money worries with their kids.

More than half of parents surveyed have accessed financial support during the pandemic including government payments, rent or mortgage relief, superannuation savings, free child care, and payday loans.

About 44 percent said they were just getting by during the crisis while 13 per cent were struggling to stay afloat.

The survey found 17 per cent of households were spending and saving less, while a quarter said the pandemic had no impact on their household finances.

Forced away from city centers to slow the spread of coronavirus, the work-from-home revolution has shown many jobs can be done from the suburbs as easily as they were in humming office buildings housing thousands of workers.

Could the shift be the change that regional Australia has long waited for? Or does it mark the moment Australians have to compete in the global market for jobs, with equally qualified but much cheaper workers?

Rachel Bragg is a paraplanner, preparing documents and complicated modeling for the clients of financial planners in gleaming towers in the major capital cities. But she does it from Kandanga, population 665, 50 kilometers inland from Noosa in Queensland.

"It's possible, with technology the way it is, you don't need to be in a big city," Ms Bragg, director of Franc Paraplanning, said.

Rachel Bragg is director of Franc Paraplanning, sitting at a desk outside her home on a laptop.
Rachel Bragg runs her business from her home about 50km west of Noosa, even though most of her clients are in the city.(ABC News: Amy Sheehan)

The way Ms Bragg is employed — and employs others — is called BPO: business process outsourcing. Financial planners meet clients and sell them plans, then pay her to do the grunt work of drafting legal agreements to cement the deal.

It is long-established for front-line tasks, such as call centers and help desks, to be contracted out to companies that specialize in running and maintaining those services.

As Athena Consulting founder Frances Quinn describes it, you will have almost certainly used a BPO service if you have ever queried an online order, enquired about a service, or checked on an invoice you were meant to be paid.

"The (service) is generally somebody who's 'white label', so they present themselves as though they are your company," she said.

Ms Quinn works with call centers, but that simplistic description undersells what those services do.

The internet and apps have largely killed off simple queries such as checking a bank balance or booking an appointment. What is left are difficult queries and managing what is called the "customer experience", or CX.

It is the whole life of a customer's contact with a company, from being found, set up with a service, having loyalty managed, being retained, and getting them to pay up when needed.

BPO is how you "give discrete pieces of work to someone, to complete them on your behalf," she explained. And that is important because BPO services are now doing increasingly complex business tasks that could change how organizations divvy up their workforce.

Regional savior?

Australia sells an image of the untamed outback and rolling paddocks, but the stark truth is, we are one of the most urbanized nations on earth.

Our population clings to the coast, packed overwhelmingly in a small number of capital cities growing at huge rates. Regional centers and rural areas have long sought to lure employers to their areas, or to import professional-level – and well-paid – jobs.

But is BPO the answer or a further threat?

Shutting offices and sending workers home during the pandemic may have opened the eyes of some bosses to a tough reality — they do not need as many staff as before.

The consulting firm's chief economist said the design of the JobKeeper wage subsidy — paid by the company to cement the link between employers and employees — showed the Federal Government's concern about businesses using technology to shed workers."I think that that's clearly a risk, and it's obviously a risk that the Government's worried about as well," according to KPMG Australia's Dr Brendan Rynne.

"The moment that you make it easier for them to break that connection, the harder it is going to be for those people to find those jobs back in the workforce — even as the economy starts to pick up."

The enforced work-from-home period has starkly exposed how much workers produce and who is really needed, he added.

"What you're going to see is businesses realize that they're in fact able to produce either a similar amount of output or something close to it, with much fewer workers," he warned.

"That's the concern that I'm sure the Government has.

"So, yes, we may get a productivity pick-up — as a consequence of the adoption of new technologies and new ways to work — but it's going to come at the expense of people in the labor force."

The biggest company you've never heard of

Probe Group employs 6,000 people in Australia, and even more in the Asian region, to answer phones, deal with customers, and more. You have probably never heard of them, even if you have spoken with them, and that is how they like it.

"We actually consider that we are our client's business, we embed ourselves within them and we provide services customized, designed for them," said chief executive Andrew Hume.

"In actual fact, if you speak to people and say, 'Who do you work for?', they typically say the client they're representing."

Andrew Hume, Probe Group CEO, stands outside in front of trees and grass on a sunny day.
You have probably spoken to some of Andrew Hume's 6,000 employees without realising it.(ABC News: Simon Tucci)

Mr Hume said the bulk of work being sent offshore is less complex, and thus more likely to be automated in the near future.

Locals are being engaged — many in regional locations — on more difficult, sensitive, and higher-value tasks.

"Things like finance and accounting, help desk support … and what is now being called knowledge services," he outlined.

"Very specialized tasks like web app development, SEO (search engine optimization) support, content moderation, mortgage origination: so, very precise and complex knowledge tasks."

With mainly complicated customer queries left and concerns about data security and privacy, companies are now "re-shoring" jobs. Westpac just brought 1,000 call center jobs back from India and The Philippines.

"There's a shift to bring work back onshore," Mr Hume said.

"Companies created a bit of risk for themselves by being overly concentrated in (countries) where that country wasn't able to recover from the COVID situation.

"And where work is coming back on-shore, we see it moving into a work-from-home setting."

The global market goes both ways

From Singapore, Charlies Ferguson runs an "employer of record" — a way for companies to hire people in different countries without having to open their own business there.

For him, where businesses are based or the location where a task gets completed does not need to be as fixed and permanent as an office tower in an Australian capital.

"The go-between sees the potential for Australian companies to expand, matched by putting Australian workers into a globally accessible talent pool."I would direct attention to the overseas expansion opportunities for small-to-medium and large businesses in Australia," said Mr Ferguson, Globalization Partners' general manager for the Asia-Pacific region.

"So the opportunity for workers — not only in the major (cities) on the east coast and Perth in the west but also in the regions — to now have access to a global job market is a tremendous opportunity.

"I'm a constant optimist, but I think it's a glass-half-full story, not a scary story."

Out of offices, out of cities

High unemployment looks set to drag on people's lives, and the economy, for years.

Technology and the drive to business process outsourcing open up regional — and global — a competition to previously protected and high-wage jobs.

"It's a massive opportunity within the entire labor market," said Frances Quinn, who consults to the BPO sector. The dispersed, piecemeal work may benefit some people but has the potential to be a precarious and insecure way to base employment.

"To realize that I don't need to have a full-time payroll person and a full-time marketing person and a full-time facilities person in my organization in order to deliver the outcomes that my organization needs to deliver."

The tools for remote working — email, video-conferencing, and file-sharing — have been available for almost two decades, but Australian companies have been loath to allow employees to work from home, even as commuting times have exploded due to suburban population growth.

Whether the response to the pandemic is a permanent shift away from what has been magnetic growth in the major capital cities will have to wait to be seen.

But proponents like Ms Quinn see the normalization of work-from-home practices — and more business process outsourcing — as inevitable for Australian companies.

"And that might start to tip them over the edge to realizing that there is another way.""The pandemic has forced their hand in creating some of that flexibility," she said.

Sitting on her veranda, a half-hour from the nearest traffic light, paraplanner Rachel Bragg feels the change.

She grew up in Coolaman, near Wagga Wagga, and watched young people like herself leave town to find work opportunities.

"Because there's no industry, there's no work there for people," she said.

"One of the main reasons for creating this business is so we can create those jobs and you don't need to go into an office.

"You can effectively have the big-city jobs but out in rural communities. It's important."

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