CONTINGENT JOB INDEX Quarterly

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1 CONTINGENT JOB INDEX Quarterly September 2017

2 Introduction Welcome to the first quarterly Kinetic Super Contingent Job Index. The aim of the Index is to help our customers and the Australian public better understand developments in the take up of flexible employment solutions. The move towards a more flexible contingent workforce has been evolving both here and overseas for a number of years, but until now, there has been little measurement and analysis based on empirical evidence. Our analysis will identify where employment models are changing. This will help employers stay ahead of the trends and what their competitors are doing. In turn it could serve to inform as an important input to operational strategy development and contribute to better-informed decision making in relation to resource allocation. Today s modern workers are on the move in their lives and careers. We have been providing unique industry-specific solutions relating to superannuation to the recruitment industry for over 25 years. Because of the profile of the majority of our members, we have a particular expertise in contingent workers and their unique requirements. This has given us invaluable insights into the trends and issues impacting part-time, flexible and contract workers across all industries and occupations. It also underscores the importance of our ongoing commitment to educating the contingent workforce on how crucial it is to stay connected to their superannuation throughout the entirety of their intermittent careers. Kinetic Super is the super that moves with you. We are small, nimble and can adapt to the needs of contingent workers and tailor solutions accordingly. Kinetic Super intends to track and analyse quarterly trends in order to provide insight into fluctuations in the flexible workforce over the course of a year, each year. We hope you find this information helpful. We encourage you to explore the data and insights and welcome your feedback. Contents Methodology 4 PART THREE Industry Analysis 8 PART ONE National Job Index 5 PART FOUR Regional Analysis 10 PART TWO Occupational Analysis 6 State and Territory Specific Analysis 11 2 Contingent Job Index

Today, Kinetic Super manages in excess of $3 billion in retirement savings and operates for the benefit of over 250,000 members.

3 About Kinetic Super Kinetic Super is the industry fund that s passionate about keeping people connected to their super. For over 25 years, Kinetic Super has worked throughout Australia across various industry sectors. Today, Kinetic Super manages in excess of $3 billion in retirement savings and operates for the benefit of over 250,000 members. With low fees, a history of strong long-term investment performance, a range of investments and great value insurance, Kinetic Super is committed to providing quality products and services. Kinetic Super challenges attitudes towards super and helps people bring the same energy and control they have for their life, to their super. Kinetic Super the super that moves with you. Temporary, contract and casual jobs 43 % VACANCIES ADVERTISED NATIONALLY 70 % IN VIC/TAS AND SA/NT 50.7 % IN FINANCIAL AND INSURANCE SERVICES Since November 2013 Since November 2013 From March to August 2017 Contingent Job Index 3

Methodology The Kinetic Super Contingent Job Index measures and tracks advertised vacancies in digital advertisements on job boards, employer career portals and recruitment company web sites.

4 Methodology The Kinetic Super Contingent Job Index measures and tracks advertised vacancies in digital advertisements on job boards, employer career portals and recruitment company web sites. Measurement of vacancies is critical because it is a lead indicator of what is likely to happen in employment in the future. The change in demand for contingent employment opportunities (temporary, contract and casual) is then calculated over 12 months and each quarter. We also measure the proportion of contingent job opportunities as a percentage of all job advertisements (e.g. contingent plus permanent). Our methodology is to extract job advertisements in real time over the internet 24/7. Our research covers around 4,000 sources in Australia on a continuous basis. Advertisements are de-duplicated twice once to eliminate any advertisement run on the same source in the last 30 days and secondly to eliminate an advertisement already extracted from an alternative source. The Kinetic Super Contingent Job Index starts at a baseline of in November Contingent Job Index

5 PART ONE National Job Index The Kinetic Super Contingent Job Index eased slightly from the new record high set in July. It fell 0.2% from to but the trend is still clearly upwards. The contingent job market took an unanticipated large drop in the beginning of 2017 but has risen substantially since then, 23.6% in the last six months. At this time of the year the trend is normally for contingent labour, particularly in retail and hospitality, to rise towards Christmas and the Summer break so further rises can be expected. Contingent job opportunities have also risen by 13.0% in the last twelve months exceeding fixed employment growth. Job Index National 23.6 % The market has risen substantially since the beginning of It is very clear that employers are increasingly looking for contingent workforce solutions. The proportion of job advertisements for contingent employment arrangements (this includes temporary, contract and casual contracts) has risen as a percentage of all job opportunities from 26.0% in August 2014 to 27.7% in August This proportion actually peaked at 28.7% in January 2017 and May 2017, and has eased by 1.0% since those peaks. This can be attributed to an unusually strong spurt in permanent hiring in the last quarter. This is not an unusual occurrence in any new financial year. Historical seasonal patterns suggest that this ratio will continue to rise over the next couple of months then ease towards the end of % 25.0% National 28.7 % Proportion of job advertisements for contingent employment arrangements peak in January % 15.0% 10.0% CHART 1 National Contingent Job Index CHART 2 National proportion of contingent job opportunities relative to all job advertisements Contingent Job Index 5

6 PART TWO Occupational Analysis 65 % Demand for Clerical and Administrative jobs has surged since our base period set in November 2013 There have been increases in demand for contingent employment solutions across all occupations but some have risen far greater than the norm. The most significant of these is Clerical and Administrative jobs where demand has surged by 65% since our base period set in November The Clerical Index hit in July 2017, extremely close to the record high established in May but slipped again in August back to Professional Staff have also been highly sought after with contingent job opportunities rising 19.2% in the last year. The Professional Contingent Job Index established a record high of in July 2017 but eased 1.3% to in August, while demand for Executives for interim roles has plateaued. Demand has slipped by 1.5% since this time last year and by 2.4% in the last quarter alone. Job Index Clerical Executive Professionals Sales CHART 3 Contingent Job Index by White Collar Occupation 8.2 % Technicians and Trades recorded a new high in the last quarter to August 2017 All forms of Blue Collar Occupation have seen marked increase in the growth of contingent work opportunities over the past four years, but they display more seasonally influenced trends than seen in the White Collar space. While the absolute Index levels are comparable to White Collar, the recent rate of increase is stronger amongst Blue Collar occupations. Growth in contingent job opportunities has been particularly healthy across all Blue Collar occupations other than Community and Personal Services. Technicians and Trades (8.2%) recorded a new high. Job Index Community and Personal Services Labourers Machinery Operators and Drivers Technicians and Tradies CHART 4 Contingent Job Index by Blue Collar Occupation 6 Contingent Job Index

7 35% August 2014 August 2015 August 2016 August % 25% 20% 15% 10% 5% 0% Clerical Community and Personal Services Labourers Machinery Operators and Drivers Executive Professionals Sales Technicians and Tradies CHART 5 All Occupations proportion of Contingent job opportunities relative to all job advertisements Clerical Staff have seen the greatest level of contingent work available, arguably to the detriment of permanent work. The proportion of contingent jobs for Clerical Staff has risen by 6.1% over the last two years to 34.5%. Contingent work has also become steadily more prevalent to Professionals over the last two years with the proportion of vacancies rising 1.1% in the last twelve months and 2.4% in the last two years. The proportion for Professionals has now reached 30.5% of all vacancies, second only to Clerical. Contrary to popular perceptions, the proportion of contingent opportunities for less-skilled workers has actually been on the decline. Machinery Operators and Drivers, in particular, has slipped from 33.9% to 28.0% in the last twelve months. It is the only Blue Collar occupational group where the current proportion exceeds the national norm of 27.7%. Labourers are slightly less at 27.1%, while Technical and Trades (22.9%) and Community and Personal Service Workers (21.3%) have the lowest contingent opportunities of all occupations. Both also fell in the last quarter. 28 % Opportunities for Machinery Operators and Drivers has slipped from 33.9% to 28.0% in the last twelve months This actually demystifies some of the hyperbole about contingent or insecure employment being more prevalent in Blue Collar occupations than White Collar jobs, when in actuality, it is the other way around. The growth also appears to be stronger in White Collar occupations based on web-based job advertising. Despite recent growth, Sales jobs represent the lowest proportion of contingent vacancies at just 15.1%. Sales jobs are subject to seasonal variation with contingent roles peaking towards Christmas and the summer break then tailing off significantly. We can expect growth in Sales jobs over the next few months. Contingent Job Index 7

8 PART THREE Industry Analysis 2.8 % Demand for Public Sector employees fell between June and August The Public Sector has always been a major employer of contract and temporary workers. This peaked at in July 2017 but demand retreated by 2.8% in August. Professional Services has very much been the laggard over the last few years, remaining below 100, the benchmark set in November 2013, for much of this time. Professional firms, such as lawyers and accountants, tend to favour permanent staff for a range of reasons, such as client confidentiality, career development, and knowledge retention. Attitudes, candidate preference or possibly their occupational mix becoming more technologically focused may be changing as the Professional Index has picked up considerably in the last twelve months. Job Index Professional Services (incl. ICT) Health Care and Social Welfare Public Sector Education and Training CHART 6 Contingent Job Index by select industries (1) Our data shows that the use of contingent staff by the Health Care sector is increasing (by 41% since records began in November 2013), however this has slowed down recently, in fact falling by 2.5% year on year. This may be deceptive as the big hospitals and their suppliers hold considerable pools of nursing and related professionals, but given the limited local talents, they now focus on sourcing their staff from overseas % Financial Services use of temporary and contract solutions has risen rapidly over the last six months Job Index Manufacturing and Supply Chain Retail and Wholesale Mining, Construction and Utilities Other Financial and Insurance Services CHART 7 Contingent Job Index by select industries (2) Financial and Insurance Services is now the fastest growing users of contingent workforces. Financial Services has now peaked at a new high of Its use of temporary and contract solutions has risen rapidly in 2017, up 50.7% in the last six months alone. Their use of temporary and contract staff is very much driven by large technology and transformational projects. The large banks tend to hold off all hiring close to their financial reporting season so volumes may well rise again later in the year. They may now also be looking to increase the mix of contingent staff for Business As Usual operations to be more nimble. 8 Contingent Job Index

9 Retail and Wholesale demand is invariably seasonal with temporary staff recruitment peaking before Christmas then tailing off significantly. Interestingly this is now beginning to ramp up although, as yet, not as pronounced this year as it has been in prior years. This begs the question as to whether new competitors in areas such as fashion and food as well the Amazon factor is making employers reconsider their talent acquisition and retention strategies. Mining, Construction and Utilities have performed well below the rest of the market for much of the three and a half years the Index data has been collected. Mining has dragged the Index down as low as 70 on several occasions. The pick-up in commodity prices, first coal and more recently, iron ore has led to some recovery in job opportunities in the Mining and Resources sector over the past twelve months. Substantial pick-up in residential and infrastructure construction has also boosted contingent demand in this sector, and led to a 47.8% rise in job opportunities in the past year % Residential and infrastructure construction opportunities in the last year 50% August 2014 August 2015 August 2016 August % 30% 20% 10% 0% Professional Services (incl. ICT) Public Sector Health Care and Social Welfare Education and Training Financial and Insurance Services Manufacturing and Supply Chain Retail and Wholesale Mining, Construction and Utilities Other CHART 8 Industries proportion of contingent job opportunities relative to all job advertisements It is surprising that Education and Training is the largest user of contingent staff as a proportion of their workforce. It reached a new record high of 47.2% in July but slipped back to 42.7% in August. Many academic appointments are fixed-term appointments. The collapse of many private educational establishments following the removal of the Federal Government funding package has significantly reduced permanent staff appointments and therefore, raising the proportion of contingent hires. The Public Sector has also significantly increased its use of contingent workforce solutions. It has risen from just over 30% when our research began in late 2013 and peaked at 39.0% in February, although this has slipped back to 37.8% since then. Distinct peaks and troughs in demand have become apparent in the last two years but more data is required in the future to see whether this trend is based on elections, budgets and other short term factors, or whether it is following similar long term trends towards casualisation. Mining and Construction have historically been industries where contingent workforces are common practices amongst employers due to the nature of the job requirements, which involve remote locations and project basis. Their proportion of contingent-to-fixed job opportunities has always been high. That practice continues and has increased with the ratio rising by 3.6% to 33.8% since August % Education and Training is the largest user of contingent staff as a proportion of their workforce Manufacturing and Supply Chain has been as low as 15% but the use of contingent labour has picked up substantially over the last three years. It peaked at 25.4% in May but has since slipped back to 19.7%. Perhaps, surprisingly, it does not display the same seasonal trend as that seen in Retail and Wholesale. Employers in this sector are likely more influenced by exchange rate and international competition factors. The changing mix reflects a change in attitude as employers need to be more contingent weighted in response to faster changing business conditions. Contingent Job Index 9

10 PART FOUR Regional Analysis The fastest growth in the use of contingent labour has been VIC/TAS and SA/NT where temporary; contract and casual job vacancies have risen approximately 70% in 3.5 years. Victoria has also grown strongly in permanent opportunities during this period. There has also been a strong transition in NSW/ACT, up 54% over the same period. 70 % Contract and casual job vacancies have risen over the last 3.5 years in VIC/TAS and SA/NT The biggest change in the last year has been in Western Australia, where the improvements in the Mining and Resources sector has been reflected in many more contingent job opportunities (41.2%). The growth is somewhat flattering as it starts from a very low base. Likewise, Queensland has slowly seen demand rise. Its Index reached in July, the first time above the 100 base line since September 2014, and reached a new record high of in August. Job Index NSW/ACT QLD SA/NT VIC/TAS WA CHART 9 Contingent Job Index by region 50% August 2014 August 2015 August 2016 August % 40.5 % ACT has the highest Contingent Job Share in August % 20% 10% 0% ACT NSW NT QLD SA TAS VIC WA CHART 10 State and Territory proportion of contingent job opportunities relative to all job advertisements There has been a consistent increase in the proportion of Contingent Job Share in the ACT and Western Australia. The ACT has the highest Contingent Job Share with 40.5% followed by NT with 34.4%. The lowest proportion is found in Tasmania, 22.8%, followed by NSW on 25.6%. 10 Contingent Job Index

State and Territory Specific Analysis Western Australia The biggest change in the last year where the improvements in the Mining and Resources sector has been reflected in many more contingent job

11 State and Territory Specific Analysis Western Australia The biggest change in the last year where the improvements in the Mining and Resources sector has been reflected in many more contingent job opportunities (41.2%). Northern Territory Second highest Contingent Job Share with 34.4%. Queensland Interesting to observe starting at 27.3% and ending at 28.2%, but in the intervening period falling severely. One might have expected QLD to have a higher proportion given the number of hospitality and tourism roles. New South Wales The steadiest state with its contingent proportion around the 25% mark. South Australia Third highest ratio of contingent job vacancies (with ACT). Victoria Consistently higher than NSW but slipped back to 27.3% in August Probably due to a surge in permanent recruitment rather than contraction in contingent hiring. Tasmania Slowest to adopt contingent workforce solutions but seems to be moving in that direction. Contingent Proportion rose 5.3% in the last month to 22.8%. The state percentages would appear to correlate closer to industrial/occupational mix rather than unemployment levels or size. Australian Capital Territory Highest ratio of contingent job vacancies. The ACT s rising proportion, now over 40%, reflects heavy weighting towards Federal Public Sector employment. There is enormous pressure to reduce expenditure as well as shorter Government tenure and short term policy making. Contingent Job Index 11

12 For more information please contact Kinetic Superannuation Ltd (KSL) (ABN AFSL RSE L ) is the Trustee of Kinetic Superannuation Fund (KSF) (ABN RSE R ) which includes Kinetic Smart Pension (KSP). This information is of a general nature only and does not take into account your personal objectives, financial situation or needs. Before making a decision about Kinetic Super or Kinetic Smart Pension you should obtain and consider the relevant Product Disclosure Statement (PDS) for these products, and any Incorporated Information, and also consider your personal circumstances. For a copy of the PDS, call us on or visit the Kinetic Super website, kineticsuper.com.au. Kinetic Super Contingent Job Index HRO2 Research Pty Ltd. The Contingent Job Index is produced under licence from the research house HRO2 Research Pty Ltd. Kinetic Superannuation Ltd accepts no liability for its accuracy and opinions. Ratings and awards are just one factor to consider when choosing a super fund. For further information about the methodology used by Chant West, see SuperRatings does not issue, sell, guarantee or underwrite this product. Go to for details of its ratings criteria.

CONTINGENT JOB INDEX Quarterly

CONTINGENT JOB INDEX Quarterly December 2017 About Kinetic Super Kinetic Super is the industry fund that s passionate about keeping people connected to their super. For over 25 years, Kinetic Super has