Job growth slows but employment market showing signs of recovery, stability

SYDNEY, AUSTRALIA – March 17, 2025: Australia’s labour market is settling into a slower growth phase, with wage gains moderating, employment expansion cooling, and hours rebounding slightly, according to the latest data from Employment Hero’s February SmartMatch Employment Report (SMER).

This slow growth phase comes on the back of a post-summer labour market cooldown in January and a decision by the Reserve Bank of Australia (RBA) to cut interest rates, suggesting employers are taking a cautiously optimistic approach to hiring as the economy eases into recovery.

The Numbers:

📈 Employment: Growth was modest at 5.7% YoY and 0.5% MoM, continuing its slowdown from previous double-digit rates
📈 Wages: median hourly rate settled at $43.50 a slight 0.2% lift from January and 5.3% YoY
📈 Hours: rebounded slightly, lifting 0.9% MoM and 0.3% YoY

Ben Thompson, CEO at Employment Hero, commented: 

“The Australian job market is entering a phase of slower but steady growth. Businesses are still hiring, but they’re becoming more selective, and wage gains are beginning to stabilise. With the RBA’s recent rate cut and another decision looming in April, we may see a shift in business sentiment. Consumer confidence recently hit a three-year high, and inflation held steady in February, which could provide a more supportive environment for hiring in the coming months. For now, businesses are still balancing costs and productivity, leading to a more cautious approach to employment.

Casual hiring remains hot, full-time roles rebounding

• Casual employment surged 10.2% YoY, continuing its dominance as the fastest-growing employment type as more Aussies pick up additional jobs to supplement income, though casual workers are still seeing a slight drop in hours worked (-1.6% YoY).
• Full-time employment grew 5.1% YoY, showing resilience despite economic headwinds, while part-time employment lagged behind at just 2.5% YoY growth.
• Part-time workers saw the biggest wage gains at 5.9% YoY, while casual and full-time workers both experienced a 5.3% increase.

Gen Z finally getting a fair go

• The 14–17 age group experienced a massive hiring surge (+28.3% YoY), with strong job opportunities in casual roles as Gen Z continues entering the labour market.
• The 18–24 age group also saw solid employment growth (+15.3% YoY), with wage increases of 8.3% YoY.
• Workers aged 45+ saw minimal job growth and only a modest wage increase (+4.8% YoY), indicating that the market is favouring lower-cost and tech-savvy labour in certain industries.

Construction booms, retail stagnates

• Construction and trade services led all industries in both employment and wages growth (5.7% and 7.1% YoY, respectively), as demand for skilled workers remained strong. Average hourly wage sits at $50.60. 
• Technology and science hiring continued its downward trend to settle at 4.1% YoY, aligning with healthcare. Employees in these sectors are earning $59.10 and $46.90, respectively
• Retail, hospitality, and tourism saw the most substantial wage growth, reaching 5.4% YoY, or $35.30 per hour. However, employment for this group saw the slowest growth at just 1.7% YoY and -0.4% MoM, likely a residual impact from the post-holiday recalibration period.
• Manufacturing showed signs of recovery, achieving a wage growth of 4.0% YoY after a prior low point, bringing average wage up to $41.60.

Queensland remains the Jobs State, WA lags

• Queensland recorded the strongest employment growth at 6.8% YoY, solidifying its role as Australia’s employment leader.
• South Australia led wage growth (+6.2% YoY), followed closely by Queensland.
• Western Australia saw the weakest employment gains (+3.2% YoY), marking a historical low for the state.
• South Australia was also the only state to record a decline in hours worked (-1.4% YoY), while Western Australia saw the biggest increase (+2.1% YoY).
• ACT is taking home the biggest hourly wages at $46.50 on average, while Tasmania earns the least at $39.10.

Thompson concluded: 

“The market is stabilising after a period of high growth, and businesses remain cautious. Sectors like construction and healthcare continue to drive hiring, while retail and hospitality are facing stronger headwinds. As economic conditions evolve and another rate cut decision looms, we may see bolder growth trends as employers and workers adapt.”