April Employment Market Update

Ads fall 3.2%

According to Jobs and Skills Australia, jobs fell 3.2% in April which represents the tenth month decrease year-to-date. Compared to the same time last year, job vacancies are down by 18.1%.

However, April’s job rates still represent a significant increase compared to pre-covid levels, close to 40% higher than the monthly average for 2019.

Recruitment activity decreased across all states and territories over the month. Victoria showed a reduction of 4.1%, the second largest decrease in Australia, with Tasmania declining by 4.7%.

In metropolitan Melbourne, online job ads continued to decline by 2.1% in April, resulting in a 21.6% reduction since the same period last year.

The most advertised occupations in Melbourne for the previous three months included:

‘Recruitment difficulty’ increases for the first time in 2024

April also saw the number of organisations nationally reporting recruitment difficulty increase by four percentage points in capital cities, a clear turnaround from a rate that has been steadily decreasing throughout 2024 to this point. The industries experiencing the most difficulty we reportedly manufacturing (61%), construction (55%) and professional, scientific and technical services (54%)

In Victoria, the overall recruitment difficulty rate remained steady at 52%, which represents a significant 13% decrease when compared to the same time last year.

AHRI Work Outlook Report

According to research published in AHRI’s latest Quarterly Work Outlook report,  employers are taking a number of approaches to combat recruitment challenges, the most common being investing in upskilling existing employees, increasing wages and improving benefits.

The recent trend of rising salaries is not helping employers who are also feeling the pressures of a cost-of-living crisis; simultaneously managing a reduction in consumer spending, an increase in operational costs, and, in some instances, supply chain challenges.

But there is some good news; AHRI’s report found a modest fall in pay expectations, showing that employers expect average pay increases to be 3% in the 12 months to April 2025, down from the 3.7% previously predicted for the 12 months to January 2025.

“Our data underscores the importance of speed to competency as part of the induction and onboarding process to help support productivity, employee engagement, and retention.” – Sarah McCann Bartlett, CEO, AHRI

Wage expectations were higher in the public sector (4.5%) than in the private sector (2.6%).

“The findings from this quarter’s outlook align with the Reserve Bank of Australia’s view that while the labour market has eased, it remains tight, with wage growth higher than is sustainable at current levels of productivity growth,” says McCann-Bartlett.

Lack of employee proficiency reported

According to the same report, employers believe almost one in five workers are not proficient in their roles, with 57% believing that skills gaps are having a negative impact on their organisation’s productivity.

High turnover rates have increased by seven percentage points, from 25% last quarter to 32% of respondents in the most recent quarter reporting that they were experiencing an annual turnover of over 20%. Data was collected from a pool of 607 senior HR professionals and decision makers.

This is likely contributing to productivity challenges, due to high vacancy rates and the time needed to train new hires and support them to be fully proficient in their roles.

Skills deficiencies were a greater issue in the public sector, with nearly a quarter (24 percent) of respondents citing this as a challenge, compared to 18 percent in the private sector.

Intention to invest in training on the rise

Despite the worrying headline statistics in this report, it was encouraging to see that 37% of organisations plan to increase training investment in their organisation in the next 12 months. “We saw a significant difference in this intention when cutting the data by sector,” says McCann-Bartlett.

53% of public sector employers intend to increase skills investment, compared to just 34% of private sector firms. “It may be that the public sector has decided this type of investment is necessary to improve productivity. It will be interesting to see the outcomes over time.”

Count down to the ‘right to disconnect’

From August 26, eligible employees will have a new ‘right to disconnect’ outside of work hours, with all awards amended to include a ‘right to disconnect term’. The specific rules will be applied differently across industries and occupations.

Employees will have the right to refuse contact outside their working hours unless that refusal is unreasonable. This means an employee can refuse to monitor, read or respond to contact from an employer or a third party. The right also covers attempted contact outside of an employee’s working hours.

The right to disconnect will also be a workplace right under general protection laws. These laws are protected rights all employees receive under the Fair Work Act.

Increasing job applications predicted to continue

According to Shortlist, a panel of experts at the recent Talent X conference in Melbourne suggested that candidates are increasingly using AI in their job applications and in response, recruiters will need to accelerate their AI implementation to keep up.

Sooner than people realise, “bots will be talking to bots” throughout the hiring process, and candidates will be able to apply for numerous jobs quickly, and with minimal effort, for example with a simple ‘hey Siri, find me a job’ prompt. There has already seen an increase in the number of cover letters and CVs written by generative AI.

The expected impact of this is an increase in wasted time as recruiters spend more time screening irrelevant candidates and they will see a marked decrease in screening efficacy.

“The growth in candidates using AI to apply for roles means it’s getting harder to assess whether they actually have the skills for the job,” says Seek director of search and technology Mark Pritchard.

To counteract the increased investment of time on these critical recruitment tasks, other administrative tasks such as note-taking during job briefs or interview transcriptions or writing advertising are areas where AI may also be the solution.

As always, Dixon advocates that when integrating any technology, decision makers should prioritise enhancing the recruitment experience for human stakeholders rather than solely emphasising cost savings and productivity gains in isolation.