Demand for labour is expected to hold up well in 2024, with wages growing faster than inflation and fewer organisations planning to cut jobs in the March quarter, according to a survey of human resources professionals.
Workers can expect wages excluding bonuses to increase 3.7% in the 12 months to January 2025, the Australian Human Resources Institute’s March outlook report found. The survey, which tallied more than 600 responses, was sharply higher than the 2.6% increase expected for the year to October 2024 in a poll three months ago.
Just over one in three organisations, or 36%, expected to expand their workforces in the current quarter, with only 3% planning to shrink staff numbers. Those reporting recruitment difficulties eased to 38% from almost one in two surveyed in November.
“Although recruitment difficulties have eased, many organisations are still having trouble both recruiting and retaining staff,” said Sarah McCann-Bartlett, the institute’s chief executive.
“Seventy per cent of employers told us they are adopting tactics to avoid or reduce redundancies, with the most popular options being raising prices (27%), exercising greater control over non-staff operation costs (23%) and reducing the use of non-permanent staff (21%),” she said.
Households are banking on the labour market remaining resilient this year in order to keep paying off higher mortgage costs and consumer prices. The labour market posted a second weak month in a row in January, with the economy adding just 500 jobs and the unemployment rate rising to a two-year high of 4.1%, the Australian Bureau of Statistics reported last week.
The ABS on Wednesday will also release the wage price index for the December quarter. Economists such as Jarek Kowcza from St George Bank expect the index to have risen 4.1% or the highest annual pace since the March 2009 quarter.
Compared with the September quarter though, the WPI will slow from a record 1.3% to 0.9%. Kowcza said the index’s annual rate was near its peak and should slow over the rest of 2024.
The institute’s 3.7% projected annual increase is in line with recently updated Reserve Bank forecasts. By year’s end, the consumer prices index should be down to 3.2% compared with 4.1% for the December quarter.
The quarterly survey also found hiring plans were strongest in the public sector, with 46% indicating they would take on more staff, compared with 29% among private sector respondents.
To address recruitment difficulties, 42% of those surveyed said they would seek to increase the skills of their present employees, with only 18% saying they would use apprenticeships.
About 29% said they would improve job security, one in four would lift wages or improve employment conditions and a similar share would make “greater efforts to recruit people from under-utilised groups”. The latter include parents returning to the workforce.
