As recruitment pressures ease, new AHRI research suggests organisations are investing heavily in workforce capability. However, gaps in leadership proficiency and AI readiness could limit the benefits.
After several years of intense competition for talent, Australia’s labour market may be entering a period of recalibration, according to AHRI’s latest Quarterly Australian Work Outlook report (exclusive to members).
The findings show an easing in hiring activity in early 2026, with just 59 per cent of organisations planning to recruit in the next three months, down from 71 per cent in the previous quarter.
Redundancy intentions have also fallen, suggesting many employers are pausing to take stock of their workforce needs amid growing economic uncertainty.
“This is not the pattern typically associated with a softer labour market, so it could be pointing to employers pausing to take stock – reassessing demand, costs and workforce composition in a more uncertain operating environment,” says AHRI’s CEO, Sarah McCann-Bartlett.
With recruitment pressures easing, the report points to a growing focus on building capability within existing workforces. Those investments are already paying off – the proportion of employees considered not fully proficient in their roles has fallen to 13 per cent, down from 19 per cent in 2024.
“Over recent years, employers have reported lifting spending on learning and development, and that commitment has strengthened further in our latest survey. At a time when wage pressures remain elevated and competition for talent has been intense, this focus on capability building appears to be paying dividends.”
The research also highlights ongoing challenges around management capability, AI adoption and certain cohorts (e.g. those with a criminal record or history of mental health) being excluded from recruitment processes, which risk stalling progress if left unaddressed.
The infographic below highlights four key workforce trends identified in AHRI’s latest report and what they mean for employers.
Please click the arrows to read through the full infographic.
Useful resources:
Course: Leadership and Management Essentials
Podcast: New truths about how we work with Kate Bravery, Let’s Take This Offline
Webinar: Unlocking Manager Potential (on-demand, AHRI member exclusive)
Course: Developing a capability framework
This full report is only available to AHRI members. Download the full report here or become a member today for a range of useful benefits, including access to AHRI’s full suite of research.
