Replacement hiring driving recruitment plans, while career development fuels turnover
Most employers in Australia are planning to recruit talent in 2026 despite hiring challenges and as limited career development fuels turnover, according to a new report from people2people.
Its 2026 Market Report unveiled the current recruitment trends and evolving jobseeker expectations in Australia.
It found that more than 82% of employers are planning to recruit in 2026, with 34% saying they are hiring to replace departing staff.
Nearly a third (31%) of employers also said they are hiring to support business growth, while just 17% cited restructuring or seasonal demand.
Replacement hiring fuels recruitment
Replacement hiring is the leading driver of recruitment across Australia's states, with employers in NSW most likely to say so (36%).
More than a third (34%) of employers in South Australia, Queensland, and Victoria also cited replacement hiring as the driver of their recruitment plans, according to the report.
"Growth-related hiring is broadly aligned with the national figure, though slightly softer in VIC (26%), QLD, and NSW (28%), while SA and WA (31%) marginally outperform," the report reads.
Replacement hiring comes as limited career opportunities influence departure plans among Australia's workforce, the findings reveal.
Employee exits in Victoria (38%) and South Australia (34%) have been attributed to limited career opportunities, indicating stronger concerns in the workforce around advancement and growth.
This was also cited among the top factors in Queensland and Western Australia, but turnover in these states was more influenced by workplace culture and work-life balance.
New South Wales, on the other hand, sees various turnover factors, such as career development, lack of training, uncompetitive salary, and work-life balance.
Hiring challenges in Australia
Meanwhile, widespread recruitment plans in Australia come in the wake of various hiring challenges faced by employers.
More than a quarter (27%) of employers said an application's relevance to a vacancy is the top hiring challenge that they're facing.
Low application volume (23%) and competition for talent (19%) also emerged among the top hiring challenges for organisations, according to the report.
Rising salary expectations were recognised by one in five employers as a challenge in hiring.
This is also reflected as the top reason (42%) why job offers to candidates fall through.
More than four in 10 respondents also noted that poor communication contributes to failed job applications, as does poor candidate experience (35%).
Some respondents said the hiring process took too long (31%), while nearly a quarter (24%) said they were better off elsewhere.
Shifts in workforce expectations and ways of working are among the factors creating disruption and opportunity for organisations, according to Mark Smith, chair of people2people Group.
"Organisations now face a clear choice: adapt to these changes, or succumb to the inevitable shifts shaping the workforce," he said in the report.
