Australian Banks Fuel Hiring Surge as Crisis Eases

By Jacob Greber

Oct. 9 (Bloomberg) -- Australian banks, among companies that fired the most workers at the height of the global financial crisis, are leading a charge to rehire as the economy strengthens.

A government report yesterday showed the nation’s jobless rate fell for the first time in five months as employers added the largest number of workers in almost two years, mostly in the financial hubs of Sydney and Melbourne.

“The sectors that were downtrodden through the global financial crisis are now those coming back,” said Savanth Sebastian, an economist at Commonwealth Bank of Australia in Sydney. “That includes financial services, investment banking, retail services, human resources and clerical duties.”

Rising employment and signs the jobless rate has peaked are among reasons Glenn Stevens this week became the first Group of 20 central banker to raise interest rates. Stevens said economic growth in Australia, which skirted the global recession, will accelerate, driven by A$22 billion ($20 billion) in government spending and demand for commodities from China, the nation’s second-largest export market.

The number of people employed unexpectedly jumped 40,600 last month, pushing the jobless rate down to 5.7 percent from 5.8 percent. All 20 economists surveyed by Bloomberg forecast the rate would remain unchanged or climb.

“Banks are hiring again; we’ve seen over the last three months very strong demand for finance people,” Andrew Brushfield, director of recruitment firm Robert Half Australia in Sydney, said in an interview yesterday.

Biggest Winners

The biggest falls in unemployment were in New South Wales and Victoria, the nation’s largest states. The jobless rate in New South Wales tumbled to 5.6 percent, the lowest level in eight months, from 6.1 percent. Victoria’s rate slid to the same level from 6.2 percent.

By contrast, unemployment rose in the mineral-rich states of Queensland and Western Australia. Rio Tinto Group, the world’s third-biggest mining company with iron ore operations in Western Australia’s Pilbara region and coal mines in Queensland, in December announced plans to eliminate 14,000 jobs.

BHP Billiton Ltd., the world’s largest mining company, cut 1,800 jobs when it shuttered the Ravensthorpe nickel mine in Western Australia and sold its Yabulu refinery in Queensland.

More Vacancies

An index of advertisements for job vacancies published by recruitment agency Olivier Group this week showed financial services and banking vacancies grew 7 percent in September following a 2.8 percent increase in August. The index had been falling since January 2008.

“Financial services and banking were the hardest hit by the global downturn -- now they are booming,” Olivier Group Managing Director Robert Olivier said today in an interview.

Bank of America last month said it hired more than 35 people in the previous three months. Japan-based Nomura Holdings Inc. in August appointed three investment bankers. Citigroup Inc. also hired four bankers to expand its Sydney- based global markets business.

UBS AG this week said it plans to hire 40 wealth advisors in Australia after inflows at the local unit resumed this year.

“The business has seen a marked change from where it was six months ago,” Clark Morgan, chief executive officer of the Australian wealth-management business, said in an interview.

The hiring contrasts with a surge in sackings earlier this year and late 2008, when the finance-industry workforce shrank for the first time in 13 years.

“Now that we’ve come out the end of this downturn, employers are scrambling to rehire staff,” said Commonwealth’s Sebastian.

Shed Jobs

Financial institutions shed 9,185 jobs since the start of last year, according to the Finance Sector Union of Australia. By contrast, there now “certainly has been a severe reduction in the number of jobs being cut,” Leanne Shingles, a spokeswoman for the union in Melbourne, said in an interview yesterday.

In March, Commonwealth Bank, the nation’s second largest, cited the “sharply contracting economy” for its decision to fire about 400 people from its BankWest unit.

Now, the Sydney-based lender “remains fairly steady in terms of overall recruitment, but we have looked at building our institutional banking team,” said spokesman Steve Batten.

A quarterly survey of employers published yesterday by recruitment firm Hays Group Plc found “a general, or in some cases acute, level of skills shortages” for accountants, financial analysts, mortgage brokers, insurance underwriters and risk officers. Engineers, infrastructure project managers, human resources staff and retail workers are also in short supply.

Focusing on ‘Upturn’

“Over the year, pockets of demand certainly existed, but they were often centered upon managing the effects of the financial crisis,” said Hays Managing Director Nigel Heap. “Now, employers are focusing on the expected upturn in business activity.”

Australia’s economy has outperformed most other developed nations, expanding 1 percent in the first half of the year. Stevens, who raised the overnight cash rate target to 3.25 percent from 3 percent on Oct. 6, says growth will accelerate close to the “trend” rate of around 3 percent next year.

The International Monetary Fund predicts Australia’s gross domestic product will rise 2 percent in 2010. By contrast, the U.S. economy will expand 1.5 percent next year, Japan by 1.7 percent and the euro region by just 0.3 percent, the fund said last week.

To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net