Australian SMEs are pulling back on casual hiring, with casual employment falling by 0.7 per cent month on month in July, the weakest monthly result in 13 months. The decline signals softer demand for flexible labour, according to Employment Hero’s monthly Jobs Report.
The wider SMB labour market also contracted slightly, with total headcount falling 0.1 per cent month on month, the weakest monthly change in 13 months. The report is based on payroll and employment data from more than 23,000 businesses and 1.7 million employees across Australia.
Employment Hero CEO Ben Thompson said the data shows businesses are becoming more cautious about hiring and looking to use resources more efficiently.
“When businesses pull back on casual hiring, it’s a clear sign they’re being forced to scrutinise every dollar and ask harder questions about how they can stretch their resources further,” Thompson said. “It’s been a hard year for Australian businesses, but we’re not seeing them lose their ambition.”
According to Thompson, pressure to increase productivity, reduce staff burnout and be more selective about where businesses add headcount is contributing to slower hiring. He said AI and technology could help improve productivity, but complexity remains a challenge for businesses.
Despite the hiring slowdown, more than half of business leaders surveyed by Employment Hero in its quarterly pulse check said they are optimistic about the next six months.
Labour market conditions also varied by location and worker group. South Australia recorded the highest employment growth at 0.7 per cent month on month, while New South Wales recorded a 0.4 per cent decline.
Wages across Australia increased 1.2 per cent month on month in July, marking the second consecutive month of growth. However, annual wage growth fell to 4.2 per cent, its lowest level in 13 months.
Younger workers were an exception to the broader slowdown. Employment among workers aged 18 to 24 increased 0.9 per cent month on month in July. They also led wage growth, with earnings rising 1.7 per cent month on month and 8.0 per cent year on year.
This article was first published in Inside Small Business.
