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Australian small businesses defy economic challenges with increased hiring
In a surprising turn of events, Australian small and medium-sized businesses (SMEs) are demonstrating resilience amidst economic uncertainties, showing a 6.8% increase in hiring year-on-year. This growth comes despite a series of interest rate hikes and a decline in consumer confidence, as revealed by the latest Employment Hero Jobs Report.
Australian small businesses defy economic challenges with increased hiring
In a surprising turn of events, Australian small and medium-sized businesses (SMEs) are demonstrating resilience amidst economic uncertainties, showing a 6.8% increase in hiring year-on-year. This growth comes despite a series of interest rate hikes and a decline in consumer confidence, as revealed by the latest Employment Hero Jobs Report.
The comprehensive report, which examines employment data from over 350,000 businesses and 1.5 million employees, highlights how SMEs are navigating economic challenges by adapting their hiring strategies. Rather than halting recruitment, these businesses are favouring flexible hiring practices to weather the storm. Notably, the 6.8% growth rate surpasses the previous year's figures, even as macroeconomic pressures weigh heavily on the economy and business confidence indexes decline.
"Australian SMEs are resilient," remarked Ben Thompson, CEO and Co-Founder of Employment Hero. "Rather than retreating, they're adapting. Businesses are continuing to show preference for casual workers despite the fact that casual workers tend to be more expensive due to holiday and weekend rates. Flexibility is a top priority for business owners, and they’re building it into their workforce planning."
The report indicates a significant surge in casual employment, which rose by 9.4% year-on-year, more than double the growth rate of full-time roles, which increased by 4.2%. This trend underscores the prioritisation of workforce flexibility by businesses as they navigate an unpredictable economic landscape.
A notable aspect of the report is the increasing emphasis on AI literacy in the workplace. Employers are now seeking non-technical candidates with AI capabilities, with demand for AI-related jobs increasing 13-fold since the fourth quarter of 2024. Interestingly, only 25% of job listings mentioning AI in the job description include AI in the job title, highlighting the growing expectation for employees in various roles to possess AI skills.
“We're watching AI literacy become the new digital literacy. A decade ago, every job required basic computer skills. Now we're seeing the same shift with AI. This is honestly great news for job seekers, particularly those with non-technical backgrounds. Employers aren’t insisting on technical qualifications. They’re just looking for people who’ve upskilled with AI and will provide leverage to their business,” said Thompson.
The report also sheds light on standout industries leading the hiring surge. The construction and trades sector experienced a 9.5% increase in employment year-on-year, with wages in the sector rising 3.0% month-on-month, marking the strongest monthly wage growth of any industry.
"Multi-billion dollar infrastructure projects are creating fierce competition for skilled workers, and that's flowing straight through to pay packets,” Thompson noted. “Tradies are in the box seat right now.”
Administrative and office support roles saw a remarkable 16.2% increase year-on-year, while engineering positions grew by 14.3%, reflecting sustained demand for project delivery and operational support. Additionally, the agriculture, mining, and energy sectors recorded an impressive 11.9% jump in employment, accompanied by a 6.3% increase in wages year-on-year.
Across the economy, workers are experiencing real wage gains, with average wages rising 5.4% year-on-year and 0.1% month-on-month, outpacing inflation. However, wage growth has slowed slightly compared to the same period last year. Call centre and customer service roles saw a 7.9% increase in wages year-on-year, real estate recorded a 7.2% rise, and government and defence roles experienced an 8.1% increase. In contrast, education and administration saw smaller gains of 1.7% and 2% year-on-year, respectively.
Thompson concludes: “If anyone still doubts the backbone of the Australian economy, look at the data. SMEs aren't waiting for perfect conditions; they're hiring, increasing wages, and getting on with it."
The Employment Hero Jobs Report provides a comprehensive overview of the current employment landscape, offering valuable insights into the resilience and adaptability of Australian SMEs in the face of economic challenges.
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