“Our workforce is at a critical inflection point”: Productivity, job growth show signs of stability

• Median hourly wage reaches $42.20, with a 3.8% annual increase; Construction & Trade Services lead with 8.4% annual growth, while Science & Technology lags at 2.8% annual growth.
• Average hours worked rose 2.2% month-on-month and 1.3% year-on-year, hinting at improved efficiency efforts.
• Flexible Staffing surges with casual workers seeing 13.3% increase in hours worked month-on-month; casual wages rise 3.4% quarterly, while full-time annual wage growth dipped by 0.9% compared to August 2024

SYDNEY, AUSTRALIA – October 30, 2024 – Employment Hero’s latest SmartMatch Employment Report signals a critical turning point for Australia’s workforce. While wage pressures continue to climb, the September data shows preliminary signs of stable productivity and employment growth. However, the road ahead remains challenging as SMEs navigate rising costs and a potential shift in household spending patterns.

Drawing on Employment Hero’s extensive real-time data, covering over 1.1 million employees, the report highlights a job market grappling with high labour costs, fluctuating employment types, and modest gains in hours worked. 

Despite ‘wageflation’ still presenting a major cause for concern, with September’s data revealing annual wage growth at 3.8% – still outpacing September inflation (CPI) at 2.1%, the modest increase in hours worked is one early indicator of a rebound.

Ben Thompson, CEO and Chief Economist at Employment Hero says Australians mustn’t get complacent; “SMEs aren’t out of the woods yet and are still struggling with the rising cost of operating”.  

Across employment types, casual wages continued to grow, increasing by 0.5% monthly, and 3.4% quarterly, with full-time annual wage growth notably decreasing by 0.9% since August.  This trend can be attributed to employers seeking flexibility in their workforce, opting to employ casuals over permanent staff, and dialling resources up or down in line with budgets. 

Businesses appear to be restructuring rather than expanding, with overall full-time employee growth steady at 4.8% annually, while part-time employees grew at a slower rate at 4.0% annually, dipping monthly by 0.3% in September. Comparatively, casual staff increased by 0.6% monthly and saw an increase of 8.8% annually. 

Key Findings:

• Median Hourly Wage: At $42.20, median hourly wages increased by 3.8% year-on-year, reflecting sustained wage growth across most sectors. Construction & Trade Services led with a notable 8.4% annual growth, while Science & Technology saw slower gains at 2.8%, indicating a rebalancing across traditionally volatile sectors.
• Hours Worked: After months of decline, average hours worked showed slight improvement with a 2.2% increase month-on-month and a 1.3% annual rise, signalling tentative productivity gains as businesses focus on efficiency. 
• Employment Type Shifts: Casual employment saw a sharp rise in hours worked, up 13.3% month-on-month, suggesting businesses are embracing flexible staffing options. Casual wages grew 0.5% monthly and 3.4% quarterly, while full-time annual wage growth dropped by 0.9% compared to August 2024.

“Our data indicates that while we are seeing early signs of stability, the cost of labour and continued wage pressures present a difficult balancing act for Australian businesses. As SMEs gear up for the end-of-year season, managing these rising costs without stalling productivity will be essential to economic resilience in the coming months,” Mr Thompson said.

“Our workforce is at a critical inflection point: the signs of economic recovery are emerging, and inflation is slowly coming down, however, the issue of unsustainable wage growth threatens to prematurely stunt this recovery. Now is the time for SMEs to be cautiously optimistic in the lead-up to the holiday season, which will be pivotal in determining the stability of Australia’s workforce and economy,” said Thompson. 

Median Hourly Wages by Sector (September 2024)

Sector	Median Hourly Rate	Monthly % Change	Quarterly % Change	Annual % Change
Construction & Trade Services	$50.60	0.8%	2.2%	8.4%
Healthcare & Community Services	$46.90	0.8%	2.9%	4.7%
Manufacturing, Transport & Logistics	$41.00	0.5%	1.3%	3.3%
Retail, Hospitality & Tourism	$34.90	0.5%	2.8%	4.9%
Science & Technology	$60.70	3.1%	0.8%	2.8%

(Source: Employment Hero September SmartMatch Employment Report, page 8)

Employment Type Breakdown: Average Employee Growth

Employment Type	Monthly % Change	Quarterly % Change	Annual % Change
Full-Time	-0.2%	1.2%	4.8%
Part-Time	-0.3%	-0.5%	4.0%
Casual	0.6%	1.0%	8.8%

(Source: Employment Hero September SmartMatch Employment Report, page 14)