The Worst Jobs in 2009 | BTalk Australia

(8min 39) Latest indicators paint a gloomy picture on the economy and most analysts now agree that Australia will face a deepening recession. So which industry sectors will suffer the most?

In today’s BTalk Australia Phil Dobbie talks to Richard Jeremiah, an industry analyst at IBISWorld, who forecasts which sectors will be hit the hardest with job losses.

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• Today’s Transcript

Phil Dobbie: Hello, this is Phil Dobbie and welcome to BTalk Australia. Today, we look at the worst jobs to be in, in 2009.

No surprise to anyone, economists are now saying Australia won’t escape a recession. We just might not have it as bad as some other countries. For a lot of us that could mean redundancy, falling house prices and life on a very tight budget. For others, it will mean if you save your job, it’s going to be cheaper to buy a house and there’ll be lower prices in the store. So it’s a bit of an us and them scenario and to a large extent it depends on whether you keep your job and that depends on which industry you work in. Richard Jeremiah is an industry analyst at IBISWorld. Now Richard, no surprises here; if you work in the finance sector, you’re in one of the highest risk categories for losing your job this year.

Richard Jeremiah: Yeah, the finance sector is not looking too good and in particular, banking. This sector’s already shed a lot of staff, particularly middle management as bank have looked to rationalise their hierarchy’s and also investment banks and security brokerages are also banking pretty hard. So over the course of the next two years to January 2010 IBISWorld expects around seventeen and a half thousand jobs to be lost a year across banking and also in the convention banking and security brokerage industry and this is making it pretty difficult for those involved in this industry.

Dobbie: Seventeen and a half thousand sounds like a lot. How many people roughly, are employed in that sector?

Jeremiah: Well this is a sector where we have got a lot of employees. So you’ve got well over a hundred thousand people employed in this sector which includes a number of industries. So there are a lot of people that are employed there. But this is over the course of two years and there has already been a lot of that that’s already been undertaken and so the rest of 2009 will still see plenty of job losses here but this is mainly to do with the fact that banks are going to see a falling profitability as the fault rates increase and now the interest income’s being crunched by lower interest rates. And so this law of profitability is pushing banks to try and get more out of each of their staff and see if they can get rid of the number of employees they have and push down those wage costs and try and provide a floor to their bottom line.

Dobbie: Now do you think a lot of those jobs that are going to disappear in the finance sector are going to be in middle management?  We’ve already seen a lot of middle management roles go but, do you think a lot more of those relatively high income jobs will disappear?

Jeremiah: Yes, we definitely expect that there’ll be more middle management and ultimately, what it is, is where a bank turns to a manager and says look, this particular person’s going to have two or three extra people reporting to them and so as soon as you do that, across an entire bank, you see, there’s a large number of people that suddenly become redundant because they don’t have anybody reporting to them. So they can shed those staff numbers. So that’s what we sort of expect to happen is banks try and reduce the number of one, try and reduce the levels in their hierarchy and also try and increase the number of people reporting to each manager and this is where they’re just trying to increase efficiencies here. Now at the same time, obviously, this can become problematic again once business volume picks up because it stretches people’s resources and so banks again will you know, obviously one expects that once things start to turn there will be another increase in employment in this industry as business loaning picks up and the people working in the industry are really stretched.

Dobbie: Always a telltale sign isn’t it?  If you’ve got manager in your job title and you’ve got no one working for you. Your future’s not looking too bright.

Jeremiah: No, it’s problematic.

Dobbie: Now it’s a tough time for real estate agents as well. They’ve had it good for a while, I guess. What sort of drop in employment are we expecting to see here?

Jeremiah: Over the course of the entire property industry, like property sector, we’re seeing a lot of job losses across the whole sector. This does include everything from building construction industries to building services, which is plasterers, carpenters that sort of thing and real estate agents and IBISWorld expects that more than ten thousand jobs will have gone in the property related industry by the end of the 2008/09 financial year. So this is a big loss but again, this is hundreds of thousands of people employed across property. So the actual fall probably you know, sounds a lot bigger than what it is when you compare it to the actual size of these industries, collectively. But in particular, real estate agents are going to be hit hard and that’s around seventeen hundred over the course of the 08/09 financial year and for real estate agents, they’re having falling in pricing so the transaction values are going down and also the falling clearance rates. Which just means they’re selling, having incidence of sale is less and then they’ll sell less and less until their commissions have been hit pretty hard and so profitability for the real estate agents and this is just going to see falling employment in this particular industry.

Dobbie: OK, that’s probably one that a lot of people who’ve sold a house and seen a huge commission going to the real estate, we might not lose too much sleep over that one.

Jeremiah: No, not necessarily and it’s not always, people aren’t as sympathetic to some of these job losses I must say.

Dobbie: Now you’re also forecasting less jobs in the airlines sector. Less demand, I guess, means less flights. So will the airlines be hit hard and is it domestic and international?

Jeremiah: IBISWorld is focused on the domestic side of things but having said that, there will be cuts as well internationally. Qantas has cut routes to New Zealand and also other destinations that I’ve seen and this is not just a phenomenon for Qantas, this has been across the entire airline industry. It’s been real tough. Massive price cuts. There’s been a bit of a price war that’s come out to try and stimulate some demand there and try and fill up planes. And we’re also seeing fewer international visitors from Japan, China, the US and UK and so, over the course of the 2009 financial year, we expect that airlines will shed around thirty eight hundred jobs, which is pretty significant for this particular industry. And this is going to be a little bit of a reflection of the wider tourism sector, which is going to suffer. I mean obviously, if people are taking fewer flights, then tourism stuff in Australia does rely heavily on international tourism and we’re going to see that sort of international tourism slow dramatically as the global economy really slows down, particularly on its growth, and so the wider tourism sector we expect that over the course of the three years to the end of 2010 financial year, there will have been a drop in almost fourteen and a half thousand jobs, which is pretty messy. And this is something that did start in 2008. There was a bit of a slow down and then 2009 has picked up in terms of job losses and then also a little bit again in the 2010 financial year. Just as things start to recover, tourism will as well.

Dobbie: Well it was quite a way back in 2008 that the Qantas CEO was saying he expected at least an eight percent drop in flights, the amount of flights in 2009. That’s quite a significant drop, I think. So what other industries do you think are going to see a significant number of job losses this year?

Jeremiah: Well the car related industries and we’re talking everything from the car part manufacturers to the major assemblers and wholesalers and retailers and that sort of thing. So they’re going to see massive job losses as well. And more importantly, I suppose for this particular industry because it is getting quite a bit of government support, there will be a lot of under employment. So people that are getting employed on a part-time or three quarter basis and so they’re getting their hours reduced, pulled back, as production runs a cut. And it’s difficult for people that are employed in this industry because they’re faced with: do I try and get a new job or do I deal with the fact that I’m only working say 30 hours a week instead of say a standard 45. So this particular industry will see more under employment than actual job losses and this is just because the domestic demand for new cars is declining and also there’s increased import competition. And this is hurting everyone and, in particular, car retailers are being hit hard because these guys generally put in orders for their cars a long time in advance because it’s such a long time to produce a car. And so they’ve just had a massive influx of cars come onto their showroom floors and now no one’s buying them. So they’re slashing prices, trying to get the stock moving and this is really hurting their profitability and not only that their starting to have financing difficulties. So this is car related industries are really going to suffer over the next twelve to eighteen months.

Dobbie: So it’s a two edged sword for them, isn’t it, really?  They’ve already spent the money but they’ve not got the money coming in through the door to replace it. Look, that’s all very pessimistic. Tomorrow, let’s have a look and see what the best jobs to be in are. Which are the safest jobs and, in fact, which are the jobs which might prosper in 2009. Thanks very much for your time, today. We’ll talk to you again tomorrow.

Jeremiah: Not a problem Phil. Cheers.