Random Analytica

Random thoughts, charts, infographics & analysis. Not in that order

Tag: Peak Employment

Random Analytics: PeakJobs – Australian Full-time vs. Part-time Employment (to Oct 2013)

Alan Kohler wrote and excellent piece for the Australian Broadcasting Corporation titled: What jobs will be left once the machines take over? He finalises with:

In Kerry O’Brien’s riveting interview with Paul Keating, the former treasurer and prime minister said the people who lost their jobs in the “recession we had to have” (1991) ended up getting better ones. That’s what the optimists say about automation: that the machines are just replacing unpleasant machine-like jobs with better ones. Except that this is not a recession – employment is going backwards while the economy is booming. Maybe jobs growth will catch up with capital expenditure and GDP later, but it’s hard to imagine the definition of full employment getting back to what it was before the rise of the machines.

I posted some thoughts and charts on this very subject back in February (see Random Analytics: Peak Employment (Part I): Australia) but I thought it might be worthwhile having another look at the updated data and republishing the full-time/part-time charts. I’ve also included a new chart looking at how full-time employment and part-time employment has progressed since the Global Financial Crisis (aka Global Recession).

1 - 131204_FTvsPTEmployment_1978-2013

The first phase of peak employment was not due to ‘the rise of the machines’ but to the rise of China. Machine like jobs, such as manufacturing were not immediately automated but rather offshored to less developed parts of the world. Since 1978 as Australia’s economy has moved from labour intensive industries to one dominated by service and digital employments there has been a 59.4% increase in full-time employment and a massive 285.4% increase in part-time work. As the above chart shows part-time employment has been steadily increasing, even through the last Australian recession of 1991-1992. At the same time full-time employment has atrophied during recessionary periods (1983, flat-lined 1987, 1991-1992, 2008 and currently flat-lined since 2011).

2 - 131204_FTvsPTEmploymentIncreases_1978-2013

To emphasise the rise of part-time employment the next chart looks at new job creation since 1978. As you can see, when times are good the full-time employment numbers spread increases above part-time employment. During two of the last three recessions (1983, 1991-92) the full-time employment numbers have collapsed back under  the part-time line. Between 1995 – 2005 both employment types grew at an even pace but as the last big boom kicked on past 2004 the spread increased substantially. The start of the GFC saw full-time employment decrease substantially but dual local and Chinese stimulus packages allowed Australia to avoid recession.

3 - 131204_FTvsPTEmploymentIncreases_GFC

This is the new inclusion and my favourite chart. Since the collapse of Lehman Brothers the Australian economy has created two part-time jobs for every new full-time job created. At the bottom of the crisis Australia shed 189,300 jobs at the same time creating 198,800 part-time employees.

To summarise.

As was recently discussed in a Business Spectator piece the Australian automotive industry is in crisis, with 150,000 automotive manufacturing jobs on the line. According to Bernard Salt, the entire Manufacturing Sector could further decline by 300,000 over the next decade.

Robert Gottliebsen believes the tapering of mining sector investment will cost another 150,000 jobs, penalty rates and a move to online trading will see another 150,000 jobs go from retail. The public service is also cutting back on employment, especially full-time thus up to half-a-million jobs are on the line over the next few years.

To summarise, the first phase of peak employment was the offshoring of machine like jobs, the next phase which is currently underway is as Alan Kohler points out the ‘rise of the machines’.

It doesn’t mean the end of employment, but…

The future global employment story will be one that will be dominated by reducing full-time employment, an explosion in part-time, contingent, contractual and freelancing structures and the ongoing integration of robots and algorithms into our workforce.

Peak Jobs, Disruption and Micro-Enterprise

Outside of the Cloud and Big Data there is a word that is over utilised and often miss-purposed in modern employment (plus unemployment or underemployment) parlance.

That word is Disruption.

Looking at the modern meaning of the word via freedictionary.com

1. To throw into confusion or disorder.

2. To interrupt or impede the progress, movement, or procedure of.

3. To break or burst; rupture.

Having a look at some of the mainstream HR discussions taking place at the moment you would think that the disruption taking place in our modern workplaces only offers opportunities and that the liabilities of disruption and disruptive technologies can only ‘revolutionise’ tired industries.

Rachel Botsman will be discussing disruption at one of Australia’s largest HR conferences this year. Specifically she will talk about:

“Publishing, music, retail and travel have all been revolutionized by digital technologies. Who’s next in line? In this big-picture speech, Rachel explains the need and radical opportunity for industries, from education to finance to manufacturing, to reinvent their business model over the next decade to get ahead of the great disruption. As more industries ‘blow up hierarchy’ and move towards reaping the benefits of collaboration, how will it change the way employees think about work and what does this mean for the HR industry? Participants will be inspired by examples from all around the world that are challenging the status quo, and using technology internally and externally to stay relevant in an age of unprecedented change.’

What does disruption look like (macro-view)?

Malcolm Farr wrote an excellent piece about micro enterprises in 2011 titled ‘Australia shuts up shop: the effect the GFC has had on your local stores’. Although I would suggest that the GFC is not the major reason for the slide in Australian micro-business some of the interesting findings in his piece include:

  • According to the Australian Parliamentary Library the amount of small businesses in Australia that employed 1-4 persons decreased from 528,669 to 497,191 between 2007 and 2011 (impacting between 31,528 to 126,112 persons or 0.2 – 1.2% of the participatory population during that time).
  • During the same period small businesses which employed between 5-19 persons increased from 227,883 to 233,832 an increase equal in-line with economic growth.

This is what disruption really looks like (micro-view):

1 - Photo (Civic Video Jun 2013)

That photo, taken only this week was one of two DVD micro-businesses left in Gympie, a small regional city of around 20,000 souls some two-hours north of Brisbane Queensland. It’s been operating for around 20-years, is a family run business and employed around half-a-dozen first time workers in a part-time capacity. There would have been an extensive list of maintenance and supply-chain inputs which allowed this business to run and assisted other small enterprises who provided those services.

Next month there will be one less family run micro-business in this small regional town which can ill afford the loss of any business. That family will now be looking for other employment as will the part-time workers and all the inputs required to run will now be less one client.

What will replace this business?

If you believe Rachel the business has been revolutionised, much like Blockbuster UK was recently revolutionised! What is actually happening is that the model was expensive and out-dated and has been replaced by a number of options all requiring much less in cost input terms, including employment in source countries although there may be employment in digital supply chains. Options which are commonly replacing bricks and mortar micro-enterprises such as this one:

  • DVD vending machines (same cost without the service);
  • Bundled digital options (with bundled extended bill each month on your phone or pay TV carrier service);
  • Online (PAYG, assisting global corporations while helping multi-nationals such as Amazon avoid their tax burdens);
  • Outright piracy;
  • Turning the telly off.

Final Thoughts

‘Peak Jobs’ is the idea that technology is replacing jobs faster than it’s creating them. For those more technically inclined it can also be attributed to the finalisation of the increased growth in average output (and income) per labour unit due to technological change since the 1820’s as put forward by Robert Solow (1956) or the commencement of technological unemployment as put forward by John Maynard Keynes (in the 1930’s) without the opportunity to transition into new roles as productivity increases but global employment declines.

For Australia this meant that not only was there a movement by larger businesses toward part-time or flexible work options but also a Darwinian attrition of small businesses. This was especially impactful on micro-businesses which employed 1-4 persons since the GFC and now is impacting on the next tier in the SME chain. All of this without a likelihood of same-for-same employment transition across the economy as disruptive (read technological) replacements are sourced, placed and deployed.

Publishing, music, retail and travel are just the tip of the spear.

Wait until disruption really starts to squeeze.

Note: My previous posts on Peak Jobs can be found at:

Random Analytics: Mining Workforce Planning Scan (Apr 2013)

Robotic Replacement expands in Australia

I spend a lot of time analysing either the stories with the most content or with the most positive or negative impact. Some categories don’t get the coverage in terms of either content or impact that they deserve.

Although it only had two stories for the month of April the indicator Augment(ation), which tracks all things to do with work augmentation, automation and robotic replacement was the category with the most impact.

The first story was the announcement that Hitachi will commence trailing automated trucks at the Meandu coal mine in the between the Sunshine Coast and Wide Bay Burnett regions of Queensland (just 2-hours north-west of Brisbane). The first three EH5000 AC trucks were expected to arrive by the end of April with Stanwell running trails over the next three-years. This is also the first real robotic replacement deployment in Queensland within range of the most extensive coal deposits in Australia (the Bowen and Galilee Basins) and is an ideal recce for Hitachi who has plans to develop more autonomous equipment to the surface mining industry by 2017 (as some of the larger projects in Queensland come on-line).

The second story was a robotics replacement milestone reached in Western Australia. Rio Tinto announced that its driverless trucks had now moved more than 100-million tonnes from its West Angelas, Yandicoogina, and more recently the Nammuldi operations. That’s almost double the amount Rio moved when it featured on the 7.30 Report (21 Feb 2012) stating it had moved 57-million tonnes.

All of this as BIS Shrapnel revised its engineering and construction numbers down from its 2012 report, stating that the nadir will commence from 2014 and not 2015. Mining doesn’t employee big numbers compared to other sectors when in its operations phase, it does however employee big exciting numbers during its infrastructure phase (which is currently still ongoing). Anecdotally, I had a conversation with a colleague who runs a Job Services Australia office who told me that the only ‘tradie’ (Australian slang for construction worker) he has seen since 2008 are those who have lost their license.

1 - Mining_AutomatedMiningTruckSites_Apr2013


For the third consecutive month Employment was the leading category with 27-stories (32.9%) more on job cutting than employment creation this month. WH&S (Work Health & Safety) followed with 22-stories (26.8%) while IR (Industrial Relations) finished third with 9-stories (11%) after a quiet March.

No stories were recorded for AOD/Crime (Alcohol & Other Drugs) or SkillsShort (Skills Shortages) in April.

2 - Mining_Categories_Apr2013

Positive/Negative Index

With one positive and seven negative stories WH&S, at minus 6 was the most negative indicator for April. The articles included at least four significant injuries and another site-death; this time of a contractor who collapsed at the Wesfarmers owned Curragh Coal Mine.

After six positive stories, L&D/R&D (Learning & Development/Research & Development) finished as the most positive with plus 6, the best monthly positive indicator for the first four months of 2013. The stories included the mining industry detailing its $1.15Bn (AUD) spend on training over the past two years, updates on two new mining training facilities and the donation by the New Gold Peak Mine of a $100,000 dollar underground loader to Western Dubbo TAFE.

On that story, I wonder if I’ll be recording a negative input next year as Western Dubbo TAFE realises no CAPEX spend but several thousand dollars in ongoing maintenance and WH&S implementation costs.

3 - Mining_PosNegIndex_Apr2013

Mining Employment Gains & Losses

Although April saw another good set of employment numbers discussed there was also a loss of both actual and prospective positions headlined by Arafura Resources which pulled out of its proposed Whyalla Rare Earths processing plant. This development may have delivered 1,000 jobs and $1-billion in economic development to the South Australian economy.

On the positive side Rio Tinto Alcan talked up the prospects of building its bauxite mine near Weipa later this year (950 construction workers during infrastructure phase, with 1,346 total employees including contractors forecast for operations) and Gindalbie opening its Karara iron ore project (500 operation jobs).

Technical note: I have updated the February employment numbers, shifting 400 from February to April as NRW Holdings announced the signing of works on the Nummuldi iron ore mine. Overall the project was forecast to employ 1,500 during the infrastructure phase.

4 - Mining_Employment_Apr2013

Here’s a look at the April data.

5 - Mining_Data_Apr2013

Story of the Month

Fortescue Metals Group (FMG) announced this month that it would be replacing its ‘spread-sheet’ system of rostering (and managing labour costs no doubt) with Microster with the implementation to be managed by ComOps.

FMG owes around $12.6-billion dollars (roughly 4.7% of Australia’s Total Commonwealth Government Securities on Issue) and employs more than 2000 employees and is managing its labour by the manual manipulation of ‘Busted Ass Spread Sheets’ (BASS).

Hard to believe, but true.

Final Thoughts

I choose the term ‘robotic replacement’ with the full knowledge that many are uncomfortable with the term. It should be noted that both stories mentioned in the introduction either emphasise safety or integration with employees while avoiding the subject of technological replacement of human workers or even peak mining employment.

It’s a common stratagem of lots of organisations when dealing with problematic issues.

Yet, we are beyond imaging what the mine of the future is as it is already here and being deployed more progressively as each year passes. Western Australian and Queensland deployments this year, no doubt New South Wales or the Northern Territory next.

Australians are just going to have to get used to the gradual transition to the mine of the future. That future is one which is largely operated by robotics and technology by a limited number of highly skilled personnel, potentially from any point on the globe.


Note: My previous post on Mining Workforce Planning Scans can be found at Random Analytics: Mining Workforce Planning
Scan (Mar 2013)

Random Analytics: Peak Employment (Part II): UK

I recently published a blog looking at Australian Peak Employment. Given some very good feedback and responses from the UK especially I thought it might be useful to have a similar look at the situation there.

Although the Office of National Statistics longitudinal depth was not as good as the Australian Bureau of Statistics in breaking down full-time and part-time employment pre 1992 there was some very good data not readily available in legacy ABS data captures, especially in areas like the self-employed.

Although I could only get data as far back as 1992 the picture it tells is as interesting as the Australian story (with data going back as far as 1978).

Here are the analytics.

1 - UK FT & PT Employment 1992-2012

Figure 1: UK Full-Time and Part-Time Employment (Mar – May 1992 to Oct-Dec 2012). Source: ONS.

Like the Australian example, the first graph highlights the almost identical increase in contingent (part-time) and full-time employment over the past decade. Since early 1992 full-time employment has increased by 10.3% (2.021-million) while part-time employment increased by 34.5% (2.072-million).

2 - UK FT & PT Employment Increases 1992-2012

Figure 2: Increases in UK Full-Time and Part-Time Employment (Mar-May 1992 to Oct-Dec 2012). Source: ONS.

Like the Australian example the increases in both full and part-time employment are identical. Unlike the Australian example which has not seen a downturn since 1991/92 the UK data shows a massive 1-million full-time jobs disappearing post GFC but over the past 12-months or so that has improved by around 400,000 new positions. Additionally, the start of this data series showed negative full-time employment through to early 1994 as the UK struggled out of the late 1980’s and early 1990’s downturns (oh, how I wish I had the data going back to 1987).

3 - UK Employment vs. Working Age Labour Force 1992-2012

Figure 3: Overall UK Employment versus Working Age Labour Force (Mar-May 1992 to Oct-Dec 2012). Source: ONS.

Here’s a look at the differential between total employment creation and the UK defined, economically inactive numbers. The UK created an additional 4.093-million new jobs; from 25.635-million in early 1992 to a record 29.729-million jobs at the end of 2012 (the pre-GFC high was 29.572-million in Mar-May 2008). The UK has steadily increased its working age population since 1992 (due to a combination a slightly lower than replacement fertility rate plus a higher immigration to migration ratio) which has left it with 3,734,000-million less jobs than that required to employ the 7.828-million increase in the working age labour force.

A quick point on the above. Like my previous article on this subject (avoiding wonkish angst) it should be noted that my Working Age Labour Force number in this graphic has been worked out utilising the ONS economically active rate data rather than my preferred method of using actual population statistics (you can see an example of this in my 2012 Abbott’s Promise piece).

In conclusion looking at the UK ‘employment type’ data is further confirmation of a global trend toward greater reliance on part-time employment, which on one hand is increasing employment to record levels while at the same time decreasing the amount of work available.

Has the UK reached peak employment yet? I’m not convinced it has but the more I look at the global data the more I am convinced we are reaching that point in the next decade. As I stated in my initial Australian analysis:

With an increasing working age population and a growing gap between jobs available the future is looking anything but certain, especially with the rise of labour augmentation and robotics replacing jobs quicker than they can be created.

Random Analytics: Peak Employment (Part I): Australia

One of the great aspects of research is that it often takes you in unexpected directions.

Over the past two months and previously in 2010 I conducted a series of hands-on research assignments in the area of contingent staffing. Although my current contingent research assignment has not completed (it has at least another two months to go) I started to delve into the macro level data and have made some interesting discoveries.

It has also got me thinking seriously about the following question which was not related to contingent staffing analysis.

When will Australia reach ‘Peak Jobs’?

First of all, let me explain what ‘Peak Jobs’ means.

In simple terms (via the blogosphere) ‘Peak Jobs’ is the idea that technology is replacing jobs faster than it’s creating them. For those more technically inclined it can also be attributed to the finalisation of the increased growth in average output (and income) per labour unit due to technological change since the 1820’s as put forward by Robert Solow. For another take on this subject the ABC’s online business reporter Michael Janda recently did a piece on Australia’s peak participation rate (it’s an excellent piece, however I am not a big fan of participation rate analytics, as it’s a data input which hides many sins but more on that in later articles).

Unless there is a major catastrophe and given that Australia’s population will increase significantly toward 2050 I am not going to go on the record today and say that Australia has reached the upper limit of its ability to employ more people. I will go on the record and say that within the next decade Australia will reach that number.

To commence the first in potentially many blogs about this subject here are some analytics.

1 - FTE & PTE Employment 1978-2013

Figure 1: Australian Full-Time and Part-Time Employment (Feb 1978 – Jan 2013). Source: ABS.

In the first graph I wanted to highlight the almost identical increase in contingent (part-time) employment over the past 25-years. Since February 1978 full-time employment has increased by 59.2% (3.016-million) while part-time employment increased by a massive 276.4% (2.520-million).

2 - FTE & PTE Employment Increases 1978-2013

Figure 2: Increases in Australian Full-Time and Part-Time Employment (Feb 1978 – Jan 2013). Source: ABS.

To emphasise the almost identical nature of full and part-time employment creation here is a look at the increases in both employment types since 1978. Notice the big drops in full-time employment from 1982/1983 and 1990/1991 (the last recessionary periods in Australian history) and the steady, almost linear growth of part-time employment during the past two and a half decades.

3 - Employment vs. Working Age Labour Force 1978-2013

Figure 3: Overall Employment versus Working Age Labour Force (Feb 1978 – Jan 2013). Source: ABS.

Using a similar representation I wanted to finalise the graphs with a look at the differential between total employment creation and the working age labour force. Australia has created an additional 5.536-million new full and part-time jobs, from 6.010-million in February 1978 to a record 11.546.7-million jobs as of January 2013. Contrary to populist belief the working age population of Australia has steadily increased since 1978 (due to a combination of higher than replacement fertility rates plus immigration), effectively outpacing employment creation by 2,400,000.

Two quick points in relation to the above. Firstly, to avoid wonkish angst it should be noted that my Working Age Labour Force number in this graphic has been worked out utilising the ABS participation rate data rather than my preferred method of using actual population statistics (you can see an example of this in my 2012 Abbott’s Promise piece). Secondly, although not included in the above graph from 2018 the Australian labour force grows by approximately 475,000 as the working age officially increases to 67 (as at 2011 there were 507,252 people between the age of 59 and 60 who will be 66 and 67 in 2018 and I’ve factored in a high mortality rate of approx. 6%).

In conclusion the start of my ‘Peak Jobs’ discussion is focussed on the increasing use of contingent labour in the Australian economy and a widening gap between growth in employment and the working age population. As shown in the data there is an undeniable trend over the past two and a half decades in terms to utilise part-time labour solutions rather than traditional full-time employment. In fact in 1978 the ratio of PTE to FTE jobs was 1:5.6 but this has decreased to just 1:2.4. It would only take another recessionary period to decrease this ratio further as demonstrated in the loss of FTE during previous downturns.

With an increasing working age population and a growing gap between jobs available the future is looking anything but certain, especially with the rise of labour augmentation and robotics replacing jobs quicker than they can be created.

In part two of this series I’ll be looking at similar data from comparable countries to see if the shift to part-time employment and potentially peak employment is a global phenomena.

Update 1 (25/02/2013): Initially this blog was going to be a series about Australian Peak Employment issues. However, given some excellent feedback and interest I’ve decided to look at other countries to see if this is a global issue (which I believe it is). For consistency, I have amended the original blog name from Australian Peak Employment (Part I) to Peak Employment (Part I): Australia.