Short-term employment intentions among Australian employers remains positive (+45), according to the Australian HR Institute’s Net Employment Intentions Index.

This index is calculated by taking the percentage of employers intending to increase staffing levels and subtracting the percentage of employers intending to decrease staffing levels.

The net positive recruitment plans are due to expected low redundancy activity and anticipated high recruitment activity. It comes despite projections for lower economic growth in 2023 and a pattern of falling job vacancies since mid-2022.

However, job vacancies remain high and according to the Index, it is possible that the relatively strong employment intentions balance is due to a ‘recruitment catch-up’, where employers are now filling vacancies that they previously struggled to fill.

While 69% of employers are planning to recruit in the June 2023 quarter, recruitment difficulties remain a concern for almost half (47%) of employers who are currently recruiting employees.

This is higher than official data published in June 2022, which reported almost a third of recruiting organisations were having difficulty finding suitable staff.

The top three reasons for recruitment difficulties include: lack of suitable candidates (75%); High salary expectations (45%); Too much competition from rival organisations (34%)

The data from the Index also found that the average employee turnover for Australian workplaces in the 12 months to the end of April 2023 was reported at 12%, with 20% of organisations reporting annual turnover of 20% and above.

This suggests that the positive recruitment intentions are not putting strong upward pressure on wages. Employers say that the mean basic pay increase in their organisation (excluding bonuses) will be 3.3% in the 12 months to April 2024. For the same period, public sector employers’ pay intentions are higher (4.4%) than in the private (3.2%) and not-for-profit (2.2%) sectors.

The survey also asked about the use of fixed-term contracts and found that more than one in three (36%) employers who employ fixed-term workers say these employees’ length of service at their organisation is more than two years.

In terms of casual employment, the most common reasons for employing casual employees include managing short-term fluctuations in demand (46%), providing flexibility for the individual (42%), managing changes in business conditions (37%) and employee preference, e.g. higher pay (31%).

As for engagement rates, 66% of employers report no difference between the engagement levels of permanent employees and casual employees. However, a quarter of organisations (25%) say that employee engagement levels are higher among casual employees compared with permanent employees.

Meanwhile, approximately 17% of casual employees are not eligible for the same training and development opportunities as permanent employees.

More than half (58%) of employers say they pay a higher rate for casual workers, compared with one in ten (10%) employers who say casual employees are paid less than permanent employees for doing the same or a similar role in their organisation.