Holiday hiring freeze: Cautious employers slash shifts for young Australians

Australia's job market took an "early holiday" in December after employers remained cautious in hiring as they braced for a softer festive season, according to a new report from Employment Hero.

Its latest jobs report revealed a 0.2% decline in employment and a 1.5% drop in average hours worked in December.

"It seems the Aussie job market went on holiday early in 2025, with December's pattern looking more like the figures we associate with January," said Tasman Page, spokesperson at Employment Hero.

"Our data suggests employers braced for a softer festive season, pulling back hours, pausing hiring, and tightening pay growth rather than leaning into the usual December demand."

The retail and hospitality sectors, which are usually busy during the holiday season, also recorded a 1.7% monthly drop in hours worked.

"Even in traditionally busy sectors like retail and hospitality, roster cuts replaced roster surges," Page said.

Young workers hit hard

The December slowdown hit young Australians the hardest, according to the Employment Hero report.

It found that average hours worked by 18- to 24-year-olds dropped 6.1% monthly and 4.5% annually. Those between 25 and 34 years old also saw a decline of 1.9% monthly and 1.4% annually.

Median wages also dropped for younger workers, with a two per cent monthly dip for those between 18 and 24 years old. Others recorded monthly declines of:

• 1.3% for 25- to 34-year-olds  
• 0.2% for 35- to 44-year-olds

"The fallout was sharpest for younger workers, who rely heavily on end-of-year shifts; many saw their hours and earnings drop just as costs peak," Page said.

Employers being cautious

The report attributed the December slowdown to soaring inflation, ongoing cost pressures, and a prolonged pause in interest rates.

"Businesses entered December more cautious than usual, managing higher wage bills and thinner margins, while households reined in discretionary spending," Page said. 

"The result was fewer shifts and smaller wage bumps at a time of year that typically provides a buffer heading into a seasonal cooldown."

The decline in hiring activity comes ahead of a declining hiring sentiment among Australian employers.

Data from ManpowerGroup last year showed that just 36% of employers are planning to increase their headcount between January and March.

Another 43% are planning to maintain their staffing levels in the first quarter, while 17% are anticipating staff reductions.