I've been recruiting senior finance roles in the Australian market for five years now. If there is one thing I have noticed, it's how cyclical things are down here. In that short time I've seen boom times, lockdowns and economic difficulty.
As is widely known, the Aussie economy has been relatively recession proof since the early 90s. Major downturns that ravaged economies across Asia in 1997 and then North America, Europe and swathes of the rest of the world in the mid-late 2000s were largely brushed off by Australia.
Even in the last true recession in 1991, Keating famously decried that it was one Australia 'had to have'. How things change.
Fast forward to March 2020 and to the onset of the global pandemic sparked by old mate Covid, governments around the world, including here in Australia, decided quickly and robustly that right now was definitely not the time to have a recession. The financial stimulus apparatus deployed was staggering in both size and scope. Australia entered a technical recession, but the RBA refers to this period as a 'downturn' due to how spectacularly the economy rebounded. With the federal government paying salaries en masse, this makes sense.
What is more interesting, however, is that now in the post covid world and with said apparatus dismantled, the business community is flying solo and seemingly into the eye of the economic storm.
My day job is to network with CFOs. You don't have to talk to very many at the moment to know that people are feeling the pinch. Global inflationary pressures largely attributable to due to the global pandemic, Putin's invasion of Ukraine and more locally to Australia, major supply chain issues, has led to the rise of rampant inflation.
As expected, the RBA bites back by cranking interest rates which in turn makes the price of doing business ever more expensive. Employees want pay rises, businesses consequently increase their prices as costs spiral and interest paid on debt becomes an increasing financial burden.
We're already seeing these conditions leading some companies into liquidation. The calm and clear skies are well and truly behind us, and we are flying right into turbulence. Tough decisions are being made across the board in terms of laying off staff, withdrawing from international markets and a realignment to focus on core offerings or products.
When Covid first struck, a stark reality hit me - Australian business has not been in crisis mode for some time. People rightly felt the emotional and financial strain as they were made redundant, and many found one of the only viable path open to them was in the interim market.
What was only months before viewed as a niche way to work, exclusive to very senior executives in the twilight of their careers, is now much more commonplace and open to everyone.
But interestingly, when the post-pandemic economic rebound took place, the utilisation of interims dissipated as people realised they could command 10-20% more salary for a similar permanent position to the one they recently exited, due in large part to the Fortress Australia policy of closed international borders and historically low unemployment.
And here the cycle becomes apparent. As inflation and interest rates rise, so does a sense of uncertainty. It is further compounded by a dramatic fall in business confidence as the outlook becomes unclear, capital markets stall as investors batten down the hatches and the 'peacetime' C-Suite teams, who are used to a pretty economic picture, reel from their new found reality.
It's unsurprising we are seeing another, newer resurgence in demand for specialist interim talent. Candidates understand this and are setting out their stalls for interim work by the hundreds. I'd hazard a majority of the business community, however, are still playing catch up.
If you haven't contemplated engaging with an Interim Manager yet but know you have a mountain to climb over the coming months, utilising one could be the difference of whether or not you and the business come out the other end intact. Covid reshaped the paradigm and more transformation, change and turnaround-focussed professionals are turning to the Interim Market as a way to deploy their skills, manage their work-life balance and de-risk supporting a business that is in deep financial difficulty.
Often they come with consulting/Big 4 type backgrounds but at a fraction of the associated cost. Partnering with C-Suite teams to objectively advise on the best path forward, they will deploy tried and tested toolkits whilst upskilling those around them.
In a volatile and uncertain economic environment, hope is not a strategy. To ride out the current and coming economic storm successfully, businesses need to act fast and early in order to avoid the worst economic impacts by mitigating the risks to which they are exposed. Having access to the specialist skills an interim professional can bring, as well as the associated workforce flexibility, is one such strategy to help you navigate this uncertain market.
Australia has sailed plainly for three decades, but when the ride gets bumpy, you need to strap yourself in and do what you can to come out the other side as unscathed as possible. You might have some war wounds but rest assured they are totemic in their ability to guide you through uncertainty into the future.