Hiring intentions also declining in March 2024 quarter
Employees can expect a higher wage increase this year as HR professionals across Australia predict that the mean basic pay increase will hit 3.7% in the 12 months to January 2025.
This is up from the previous 2.6% that was expected in the 12 months to October 2024, according to the report from the Australian HR Institute (AHRI).
"This is the highest figure for wage intentions recorded in any of our four Australian Work Outlook surveys published to date," said AHRI CEO Sarah McCann-Bartlett in the report.
The report, which surveyed over 600 senior HR professionals and decision-makers in Australia, also found that 17% are planning to implement a pay freeze this year.
Another 34% of employers also said they have yet to figure out the extent of wage changes in their organisation for the 12 months to January 2025, according to the report.
Hiring intentions for Australia
Meanwhile, the report also found net employment intentions among employers have dropped to +33 in the March 2024 quarter, down from the +41 in the December 2023 quarter.
"This is the lowest figure for net employment intentions recorded by our four Work Outlook surveys published to date," McCann-Bartlett said.
However, she noted that the weaker labour market conditions would not likely lead to job cuts, which recently declined to 22% over the past three months.
"This may be because the labour market remains tight by historical standards. It may also be partly explained by the extent to which Australian employers are adopting alternatives to redundancies," the AHRI CEO explained.
According to the report, over 70% respondents said they are adopting measures to avoid or reduce redundancies. These measures include:
- Raising the prices of product and services (27%)
- Reducing non-staff operation costs (23%)
- Reducing the use of non-permanent staff in their organisation (21%)
- Implementing a recruitment freeze (21%)
- Training budget cuts (20%)
- Reduced working hours (20%)
- Delaying or reducing pay increases (17%)
- Reduced or no bonuses (16%)
Recruitment, retention issues persist
The report also found that recruitment and retention issues remain, with the average employee turnover rate in Australian workplaces in the past year staying at 14%.
To boost retention, majority (37%) of employers said they introduced or enhanced other flexible working arrangements. Others implemented:
- Increased learning and development opportunities (36%)
- Improved support for employee well-being (35%)
- Coaching and mentoring opportunities (33%)
- Leadership and management capability training (31%)
- Improved job security (28%)
In terms of recruitment, majority of employers (42%) said they plan to upskill existing staff to minimise recruitment challenges. Others said:
- Improve job quality (29%)
- Raise wages and/or improve benefits (25%)
- Greater efforts to recruit people from under-utilised groups (24%)
- Greater investment in leadership and management capability (23%)
