AHRI Quarterly Australian Work Outlook - March 2025
March 2025
This report is the eighth instalment of the Australian HR Institute Quarterly Australian Work Outlook series and draws on responses from over 600 senior HR professionals and organisational decision-makers.
The report presents a broadly positive outlook for the labour market, with strong employment growth expected, easing recruitment challenges, and an increase in the number of employers planning to invest in skills development. Despite these positive trends, employee turnover rates remain high and six in 10 employers are turning to overseas talent due to a shortage of locally available skilled workers. In addition to tracking a range of labour indicators, the latest report also provides an in-depth analysis of recruitment and retention, migration, and skills.
Key Findings
The AHRI Net Employment Intentions Index, which measures the difference between the proportion of employers that expect to increase staff levels and those that expect to decrease staff levels decreased to +39 in the March quarter of 2025.
42 per cent of organisations intend to increase staff levels in the March 2025 quarter, compared with just 3 per cent that anticipate reducing the size of their workforce over the same period.
64 per cent of organisations plan to recruit staff in the March quarter of 2025, slightly down on the figure recorded for the December 2024 quarter (67 per cent).
23 per cent of employers intend to make some staff redundant this quarter – slightly lower than in the December 2024 quarter.
30 per cent of organisations are experiencing recruitment difficulties in the March 2025 quarter. This equals the lowest level for recruitment difficulties recorded in any of our surveys.
The 12-month average employee turnover to the end of December 2024 was 16 per cent, unchanged from the previous quarter.
Around a third (34 per cent) of organisations reported that total annual average employee turnover is 20 per cent and above.
The survey data shows that the most frequent reason for employees leaving organisations is excessive workload, which is cited by a quarter (26 per cent) of employers.
The measures used most frequently by employers to help retain staff are increased learning and development opportunities (36 per cent), enhanced flexible working arrangements (36 per cent), and improved support for employee wellbeing (36 per cent).
Employers reported that the mean basic pay increase in their organisation (excluding bonuses) is expected to be 3 per cent for the 12 months to January 2026, up from 2.7 per cent for the 12 months to October 2025.
More than two thirds (69 per cent) of organisations deliberately exclude people with certain characteristics when recruiting staff.
The most frequently utilised recruitment steps used by employers are CV reviews (52 per cent), skills-based interviews (50 per cent) and qualification checks (49 per cent).
According to survey respondents, on average, 16 per cent of employees are perceived to be “not fully proficient” in their job.
Nearly six in ten (58 per cent) employers say training investment will increase at their organisation in the next 12 months, compared with 29 per cent who report that it will remain the same.
Employers are using overseas workers to ease skills shortages and recruitment difficulties in their local Australian labour markets. The most important reason for employing overseas workers is an inadequate supply of applicants from the domestic workforce who have the right skills or qualifications (33 per cent).
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