AHRI Quarterly Australian Work Outlook- March 2024

I am pleased to introduce the findings from AHRI’s Australian Work Outlook for the March quarter of 2024, a comprehensive survey of 600+ senior HR professionals and decision-makers across private, public and not-for-profit organisations across all Australian states and territories. 

This report serves as a valuable resource for HR professionals, executives, board members, and government departments, as it oers essential insights into recruitment and redundancy intentions, employee turnover rates and pay expectations.

This quarter’s report indicates that easing economic growth is having an impact on the Australian labour market. Although the data suggests that demand for labour will continue to grow, net employment intentions have fallen from +41 in the December 2023 quarter to +33 in the March 2024 quarter (see Figure 1). This is the lowest figure for net employment intentions recorded by our four Work Outlook surveys published to date.

However, the weaker labour market conditions do not appear to be leading to an increased rate of job cuts in the short-term, with redundancy intentions falling from 31% to 22% over the past three months (Figure 3). This may be because the labour market remains tight by historical standards. It may also be partly explained by the extent to which Australian employers are adopting alternatives to redundancies. This could be because they wish to preserve the skills and knowledge of the existing workforce, or because they are waiting for further information about the Australian economic outlook (Figure 4). 

In line with this reporting of a slight cooling of the labour market, the level of recruitment difficulties reported in this and other surveys in previous years, is also starting to recede. This modest shift may offer some respite to the HR professionals who have faced more than two years of labour shortages, Australian workers who have had to deal with higher workloads due to staff shortages, and organisations balancing their human resources against customer and user demand.

Looser labour market conditions should, on in the face of it, lead to more moderate wage increases. However, as our survey shows, the situation facing HR professionals on the ground is a lot more complex.

Many organisations are still experiencing recruitment diculties (Figure 5), and perhaps even more significantly, retention issues (Figure 7). A lack of quality in the labour supply and the high training and recruitment costs associated with replacing sta may still be putting upward pressure on wages in many Australian workplaces.

The mean basic pay increase in organisations (excluding bonuses) is expected to be 3.7% in the 12 months to January 2025, significantly up from 2.6% in the 12 months to October 2024. This is the highest figure for wage intentions recorded in any of our four Australian Work Outlook surveys published to date.

Each Australian Work Outlook report examines one or more topical workplace or HR-related issue. In this quarter, we examined recruitment and retention because of its effect on productivity and skills.

Fewer recruitment opportunities in a cooling labour market may have a disproportionate impact on some disadvantaged groups according to the survey data. Overall, almost two thirds (63%) of employers actively exclude people with certain characteristics from the hiring process.

The results also suggest that the three most effective tactics employers can adopt to retain their workforce are enhancing learning and development opportunities, offering flexible working arrangements and raising wages.

I look forward to engaging further with our members on the findings of this quarter’s report and its implications for HR and our workplaces.