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Hiring growth dips as businesses navigate tougher operating conditions
In a sign of shifting economic priorities, Australian businesses are showing increased caution in their hiring practices, according to the latest Employment Hero Jobs Report. The data, released in May 2026, indicates that employment growth stalled in April, with a marginal decline of 0.1% month-on-month (MOM). This marks the end of a three-month period of workforce expansion, as companies contend with ongoing economic pressures and rising operational costs.
Hiring growth dips as businesses navigate tougher operating conditions
In a sign of shifting economic priorities, Australian businesses are showing increased caution in their hiring practices, according to the latest Employment Hero Jobs Report. The data, released in May 2026, indicates that employment growth stalled in April, with a marginal decline of 0.1% month-on-month (MOM). This marks the end of a three-month period of workforce expansion, as companies contend with ongoing economic pressures and rising operational costs.
Despite the monthly stagnation, the report highlights that annual employment growth remains robust at 8.4% year-on-year (YOY), a testament to the labour market's overall resilience. However, the nature of employment is evolving, with casual work emerging as a significant driver of workforce growth. Casual employment surged by 11% YOY, outpacing the growth rates of full-time and part-time employment, which stood at 5% and 2.9%, respectively. This trend underscores a growing preference among businesses for flexible staffing models that can adapt to fluctuating demand.
James Keene, Managing Director of Employment Hero APAC, attributes this shift to the need for businesses to navigate softer economic conditions while maintaining operational agility. "Businesses are still hiring, but the pace of growth has clearly slowed as employers become more cautious about expanding their workforce," Keene explained. "After several years of rapid hiring and intense competition for workers, many businesses are now focused on protecting margins, managing costs carefully, and building more flexibility into their workforce models."
The report, which draws on aggregated payroll data from over 23,000 businesses and 1.7 million employees across Australia, offers a comprehensive view of current labour market dynamics. It suggests that while businesses continue to require access to talent, they increasingly seek the ability to scale their workforces up or down in response to demand. "The continued strength in casual employment highlights that employers still need access to talent, but they increasingly want the ability to scale workforces up or down depending on demand," Keene noted.
In addition to employment trends, the report sheds light on wage dynamics. Wages saw their most substantial monthly increase in over six months, rising by 1.6% MOM in April. On an annual basis, wage growth stands at 4.8%, outpacing inflation and providing real wage growth for many Australian workers. The median hourly wage has now reached $46.30 nationally.
Keene highlighted the balancing act businesses face between attracting and retaining talent and managing profitability. "Wages are continuing to rise, which is positive news for workers, but it also adds to the cost pressures many businesses are already carrying," he said. "We’re seeing employers become increasingly strategic about hiring decisions and more focused on workforce efficiency and productivity. Rather than aggressive expansion, businesses are taking a more disciplined approach to growth in the current environment."
The Employment Hero Jobs Report serves as a real-time barometer of labour market conditions, utilising first-party payroll and employment data from businesses across the country. It provides valuable insights into how companies are adapting to the evolving economic landscape and the strategies they are employing to balance growth with financial sustainability.
As businesses navigate these challenging conditions, the emphasis on flexibility and strategic workforce management is likely to continue shaping the employment landscape. While the immediate outlook for hiring growth may be tempered, the enduring strength in casual employment and the ongoing rise in wages suggest that the Australian labour market remains dynamic and adaptable in the face of economic headwinds.
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